They are a generation born between 1981 and 1996 recognized for being tech-savvy, following their hobbies, and destroying industries. They’re also recognized for holding their generation’s financial problems. If you are in need of money visit Oak Park Financial now!
Millennials grew up or joined the workforce during the Great Recession, posing particular financial problems.
According to Student Loan Hero research, millennials’ incomes have increased by 67% since 1970, but not enough to keep rising living expenditures. Not to mention student loan debt, wage loss, and saving for life events like homeownership and retirement.
But many millennials are financially challenged and depend on their parents or grandparents for assistance.
See some of the significant money challenges millennials face today.
Millennials have the highest student loan debt ever.
Millennials are notoriously burdened with student loan debt. Tuition has quadrupled since the 1980s, resulting in record student loan debt, Business Insider reported in November.
According to an American Academy of Arts & Sciences research, between 2000 and 2012, the median cumulative student debt amount climbed from $16,500 to $20,400.
Millennials must save more for a home
Millennials are paying the price of rising home costs.
According to Student Loan Hero, millennials purchasing their first house now will spend 39% more than baby boomers buying in the 1980s. When adjusted for inflation, housing values have risen by 73% since the 1960s.
Maybe this is why millennial homeownership is at an all-time low – they have to save more money. A 20% down payment on a property might take almost a decade to keep in specific locations, according to SmartAsset.
Millennials are paying more for rent.
Meanwhile, rents are skyrocketing for many non-homeowner millennials.
According to Student Loan Hero, rents climbed by 46% from 1960 to 2000. The 1960 median gross rent was $71, approximately $588 now. By 2000, it had risen to $602, or $866 today.
To establish wealth for many millennials
The Federal Reserve Bank of St. Louis warns that millennials born in the 1980s may become a “lost generation” for asset building.
The survey concluded that their wealth levels were 34% lower in 2016 than they would have been in the financial crisis hadn’t happened, making them the group that took the longest to recover. Since then, they’ve been catching up.
According to Student Loan Hero research, millennials struggle due to low wages, high housing prices, and student loan debt.
More millennials are taking care of elderly parents, costing more.
According to The Wall Street Journal’s Clare Ansberry, more millennials take care of their elderly parents. She indicated that since 2009, the ratio of young adult carers has risen to 24%.
Millennials spend more than older caretakers but earn less. According to Scott Williams of the worldwide campaign Embracing Carers, millennials spend 27% more on caring than earlier generations.
According to a poll commissioned by Genworth Financial, the average cost of elder care ranges from $18,000 per year for adult day care to $91,000 per year for a private room in a nursing facility.
Many millennials depend on their parents’ money.
Many millennials depend on their parents for financial support in the first place. The Country Financial Security Index found that after turning 21, 53% of Americans aged 21 to 37 had received financial support from a parent, guardian, or family member.
This money is for essential requirements like mobile phones, food, petrol, health insurance, and rent.
Less money for retirement for millennials
Inflation has reduced the value of $1 million. According to a 2016 Time magazine projection, $1 million in savings would equal $306,000 in 40 years (about the time millennials retire or near retirement).
According to one financial counselor, the average yearly withdrawal from $1 million in savings will be below the poverty level for millennials presently 32 and planning to retire at 67.
So millennials must save much more for retirement. According to Vanguard, they were considering that just 5.3 percent of 25-34-year-olds keep, which administers 4.4 million 401(k) accounts.
Many millennials also invest poorly, choosing cash investments with low returns.
“Millennials will have the largest retirement-savings burden in history,” said Greg McBride, chief financial analyst at Bankrate.com. “The nest egg that they’re going to have to acquire on their own is going to be greater than any prior generation.”