Being a part of the millennial world has an innumerable amount of merits and inadequacies, but usually, millennials are reasoned out to be financially uncontrollable, splurging away their money on slices of cheesecakes and cappuccinos. However, in a millennial’s defense, we have all encountered a phase in life when we were financially uncontrollable, until we got our act together. And it has been discovered that all millennials from all parts of the world face the same bashing from experts.
But then again, how much of it is true? Are all millennials financially uncontrollable?
Before we get into these specifics, let’s start by conjuring up a picture of the millennial generation. They are defined as the cohort born between 1981 and 1996, and they are the generation recognized for being tech-savvy, following their desires, and killing a bunch of businesses. They are also recognized for bearing a number of financial problems specific to their generation.
This is in huge part due to the circumstance that millennials grew up or came into the workforce during the Great Recession, forming unique financial challenges.
Although millennials profited from a 67% upsurge in salaries since 1970, as stated by a Student Loan Hero report, the upsurge hasn't kept up with the increasing living costs. Not to mention that millennials are burdened with student loan debt, are relentlessly working to catch up on lost income, and must save more for future intentions, like purchasing a house and retiring (Hoffower, 2019).
This article is going to shed light upon a few common financial problems, which a millennial is likely to encounter.
Millennials are loaded with accumulated student loan debts
With teaching fees having been initiated by the U.S. Labour government back in 1998, millennials were the foremost generation to pay for higher education. Even as means-tested student loans were presented to pacify the condition, university tuition fees are seemingly high all around the world, meaning many students begin their working life with some debt.
Include to that the cost of purchasing a house, purchasing a car, getting married and raising kids, millennials are piling huge amounts of debt in a comparatively short space of time. That being said, many millennials do not appear to be disheartened by these costs, rather they are presuming them to be ‘good debts’ or a part of ‘regular life’.
Millennials are burdened with startling rents
Meanwhile, many none-homeowning millennials are dedicating their hard-earned cash to mind-boggling rents, which eventually causes them to struggle to make ends meet and put money aside in order to save for the future.
No emergency savings
In certain ways linked to the point above, most millennials are likely to have very little emergency savings. When an unexpected financial incident arises, many are expectedly required to put some of their expenditures on credit cards, hence pushing them further into debt. However, as frustrating as these financial calamities can be, they can have an encouraging outcome, as they will finally spur millennials into saving to avoid a reoccurrence in the future.
Putting off retirement planning
We are all ashamed of questioning ourselves ‘where did the time go?’ and millennials are not alone in discerning that retirement is far away in the future when they are young. The truth is: the further in advance you begin preparing for retirement, the more you enhance your possibilities of attaining the retirement you want.
By not putting money aside the day they collect their first salary, millennials have become familiarized to netting – and spending – all their monthly proceeds. It may sound easy but, by saving from day one, millennials can become used to living off a lesser monthly income at the same time as preparing for their future.
By Nathasha Hindurangala
Hoffower, H. (2019). 6 financial problems plaguing millennials through no fault of their own. Retrieved 13 September 2020, from https://www.businessinsider.com/personal-finance/money-problems-millennials-facing-student-loan-debt-homeownership-2019-5#more-than-one-third-of-millennials-earning-at-least-100000-a-year-consider-themselves-middle-class-5