Millennials are highly educated but unfortunately, they don’t earn as much as people belonging to different generations. According to the New York Times reports, the average earnings of adults ages 18-34 between 2009 and 2013 — $33,880 — is the lowest since 1980. The most educated generation in history is on track to becoming less affluent, financially than its predecessors.
Millennials also have low net worths — down 43% from Gen Xers — and pretty much no savings. Boomers are always complaining that the Millennials do not play by the rules. They are sluggish, don’t have a robust work ethic, live beyond their means, they are self-absorbed and narcissistic.
They aren’t saving any money, they’re not settling down, they are not interested in marrying or children. They do not invest in real estate.
They seem like a lost generation, one that will never be able to take over the leadership. They are upbeat, susceptible to change, and self-centered and they do not think or care about “traditions”.
How The Millennials Manage Finances?
A recent New York Times article summed up the predicament of the millennials. They are the most highly educated generation, most of them hold a bachelor’s degree. However, their annual income is comparatively less than prior generations.
Millennials are not good at saving money. Millennials are plunging into their savings for any minor crisis. They are hardly interested in insurance plans or investments. They are indebted because of student loans. Still more striking is that millennials have endured falling earnings even though they have attended college in record numbers.
For non-college graduates, getting a job is nearly impossible. college is becoming less affordable even as it has become increasingly necessary. Since 1993, average tuition has risen by 234%, far above the 63% overall inflation rate.
They have few employment opportunities that will, at most, give them a middle-class lifestyle. The slow economy, the higher rates of unemployment and underdevelopment, stagnant wages, and student loan debt are major contributors. It is becoming difficult for millennials to have a good lifestyle and save for retirement.
Due to the recession, they are commencing at lower salaries and may never fully make that up throughout their working lives. Millennials will inherit an ever-increasing burden of federal debt payments and are looking at the possibility that they may never see Social Security or Medicare when they reach retirement age.
How Do Millennials Defer The Nagging Sense Of Obligations That Boomers Associate With Adjusting?
Millennials are not buying homes or investing in real estate and this is alarmingly concerning. It is an indication of individual and societal stability. Millennials would rather be far more mobile and are willing to pay high rents in urban areas for the lifestyle that is offered.
Because of the burdening student loan debts and stagnant incomes, owning a home is just not a financial burden they want. Homeownership is down from 43.6% in 2004 to 34.8% in 2014.
Besides, Millenials are not buying cars. An urban lifestyle allows them to forgo this expense due to various modes of cheap transportation.
Millennials are not interested in settling down, getting married or having a family and that is the primary reason for them to not be concerned about such important life investments or responsibilities.
This may be because of the independent vagabond mentality most millennials harbour, the most important reason is that they do not want to put up with the financial pressure that comes with a family and household.
Furthermore, millennials are also the victims of the irresponsible fiscal policies pursued in large part by members of the older generation. Rising national debt levels may also threaten the ability of millennials to collect on promised Social Security and Medicare benefits.
The prior generations have made a financial blunder and the millennials are suffering the brunt of it today. Instead of complaining, they should begin with helping the millennials to come up with solutions as they have allowed the national debt to reach ridiculous proportions and the economy to stumble when they did not have to.
Fixing The Issue
Firstly, we need to erase the interest on student loans. Paying this does not put any money into an already stagnant economy. But it is necessary to get the nation’s economy onto a stronger growth trajectory.
Reducing government expenditures along with reasonable tax increases can begin to reduce this burden.
Infrastructure, alternative energy, technology, research, and development, are the growth sectors the government should focus on. We need to be pouring money into these segments so that good-paying jobs and careers can be found.
Education must reflect a society’s needs. Career training must begin in high school. Government Schools and colleges should impart education at par with private institutes.
An important step could be to ease the burden of student debt for those who have already graduated and provide less expensive college opportunities for the rising generation.
We should remember and acknowledge the plight of millennials and the role that the older generations in many cases, our parents played in creating it.
Millennials are rebellious but wonderful. They value social causes, less stressful work environments, lifestyles that promote “non-work” interests, activities, hobbies, relationships, and pursuit of their passions.
They don’t believe they are the “lost” generation – they believe they have “found” their prerogatives. Many are also not optimistic about their financial futures. Rather than denouncing millennials, older generations need to pursue ways to alleviate them of the burdens they did not bring upon themselves.
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