As far as reputation goes, millennials have a pretty bad rap. But a lot of people aren’t taking into consideration the unique set of circumstances that created their financial reality. Let’s break it down.
Let’s start off with the message that was drilled into them in high school: The only way you are going to be considered a success, is if you go straight into a four-year university – this will ensure you land a high paying job. And most did exactly that. Rather than considering going straight into the workforce, going to less expensive trade schools, or even junior colleges never entered their minds. As a side effect, the millennial generation is full of people with degrees in entrepreneurship and our country is now lacking auto mechanics, construction workers, police officers and farmers. All of which are perfectly respectable professions that also don’t require digging out from under tens of thousands of dollars in student loan debt.
Some have referred to millennials as “The Recession Generation”. Right about the time they were graduating from high school, and college, the recession hit and job prospects were dismal. Millennials are a very well-educated generation. They walked across the stage in cap and gown having accrued on average $37,172 in debt. They gathered up their degrees, resumes and optimism, and began the nearly impossible task of finding employment.
Currently, 48% of millennials are overqualified for the positions they are in. This also created a job market where employers can pay $10.00 an hour to a receptionist with a Bachelors in Business Management. In addition, many college programs require unpaid hours of work or internships to earn a degree. Per Huffpost, Elena, a 29-year-old dietician, said her master’s degree required a yearlong internship in a hospital, where she worked the same hours as paid staffers. Some of which resort to taking out an additional student loan, just to pay the cost of living during an unpaid internship.
Now let’s talk about the real reason millennials don’t own homes, and it has nothing to do with avocados. There are many reasons why millennials aren’t buying property. The recession was caused by the housing crisis that amassed an enormous amount of foreclosures. Watching friends and family lose their homes left an impression. In addition, most millennials come from homes where parents didn’t stay together. The fear of relationship failure has driven millennials to date longer, be pickier about our life partners, and delay marriage and expanding families. Does their hesitation to rush into marriage affect homeownership? Absolutely. Very few millennials, can afford to purchase a $300,000.00 home on one income. The good news, is rather than turning to credit cards and living beyond their means, they just change their address to mom and dad’s basement.
Speaking of mom and dad, millennials heavily rely on their parents to help keep them afloat. According to creditcards.com 20% of millennials have parents who are currently paying on student loan debts, that they took out themselves. 74% of parents are helping their millennial children with living expenses and debt. 39% of parents are still paying their cell phone bills.
So, what does the future hold for us?
- They won’t let their children make the same mistakes they did. They won’t let their children feel like failures for saving money by going to community college or choosing to become an HVAC technician.
- They can count on very little from social security and their retirement contributions are bleak. They are expected to work up to age 75 to make up for the gap. In addition, life expectancy rates just took a plunge so if they do get to retire by 75, odds are they aren’t taking any grand retirement trips to Europe.
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