When it comes to financial stress, millennials shoulder a heavier burden than previous generations due to soaring college tuition, higher health care insurance, and increasing childcare costs—among other factors. As it turns out, “two-thirds of millennials owe some kind of long-term debt, and 53% claim that debt is overwhelming.” 1  

Due to rising living costs, millennials are staying at home longer and delaying starting a family. “In 2005, the majority of young people lived independently in their own household, which was the predominant living arrangement in 35 states. By 2015—just a decade later—only six states had a majority of young people living independently.” 2 A big factor for young adults staying at home longer is the soaring costs of college tuition. “Between 1993 and 2015, average tuition increased by 234%.” 3 According to data from the Bureau of Labor Statistics, 46% of grads left college with debt in 1995, compared with 71% in 2015.” 3

Adding to the heavy financial burden are key contributing factors such as housing. Today, “millennials buying their first homes will pay 39% more than baby boomers taking the same steps in the 1980s.” 4  What’s more, according to CNBC, “the average annual health insurance cost per person in 1960 was $146 compared to $10,345 in 2016—nine times as high when adjusted for inflation.” 5 And for millennials with children, findings from the US Census Bureau show that after adjusting for inflation, the average weekly childcare costs increased to $143 in 2011 from $84 in 1985. 5

But even when faced with this financial reality, according to a survey by LendEDU, “not all young people are prioritizing the future. Though on average, millennials put more money per month towards long-term savings than they spend on restaurants or lattes, the survey reports that 49% spend more on dining out per month than they put towards retirement, and 27% spend more just on coffee.” 6  A  2017 GoBankingRates survey found that “most young millennials — those aged 18 to 24 — had less than $1,000 in their savings accounts … a decrease of 12 percentage points from 2016.” 7

However, as a whole, millennials are not as blind as they seem when it comes to their finances. Around “34% of millennials are unsatisfied with their financial standing at the moment and 18% are “not at all” satisfied. More than half of them are worried they won’t be able to pay back their student loans, including 34% who earn a household income of more than $75,000 per year.”1

This leads to one obvious question: why are millennials struggling to prioritize their finances? It seems that a lack of financial literacy might be at the core of the problem. A survey conducted by PWC found that “only about 8% of the millennials polled had what the researchers were comfortable calling a high level of knowledge about personal finance.” It also highlights that “only 24% [of millennials] demonstrated basic financial literacy.”8

Although millennials are facing stark financial circumstances, according to a survey by TD Ameritrade, “young people have high hopes for their financial futures: 53 percent of millennials expect to become millionaires at some point in their lives.” 6  But they need to start by saving now—and it seems like a lot of them are well on their way. According to the LendEDU survey, a portion of millennials “put an average of $480 per month into retirement savings….compounded over 40 years with an annual rate of return of 6 percent, that could add up to about $900,000.” 6

  1. https://www.forbes.com/sites/sarahlandrum/2017/08/04/millennials-technology-and-the-challenge-of-financial-literacy/#7334ec4028e6
  2. https://www.census.gov/content/dam/Census/library/publications/2017/demo/p20-579.pdf
  3. https://www.businessinsider.com/millennials-lives-compared-to-gen-x-baby-boomers-did-2018-3#millennials-are-saddled-with-student-debt-but-a-college-education-is-more-necessary-than-ever-2
  4. https://studentloanhero.com/featured/millennials-have-better-worse-than-generations-past/
  5. https://www.businessinsider.com/millennials-cost-of-living-compared-to-gen-x-baby-boomers-2018-5
  6. https://www.cnbc.com/2018/09/05/how-much-millennials-save-for-retirement-each-month.html
  7. https://www.gobankingrates.com/saving-money/half-americans-less-savings-2017/
  8. https://www.pwc.com/us/en/about-us/corporate-responsibility/assets/pwc-millennials-and-financial-literacy.pdf