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Has the American Dream Turned into a Nightmare for Millennials? 

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

Millennials have a great advantage when it comes to accomplishing their financial goals. In today’s day and age, millennials have more access to financial literacy programs and tools to help them plan for their financial future than previous generations. And financial institutions are well positioned to become true customer advocates by helping them take control of their finances with tools that offer proactive financial alerts, relevant offers, educational material, and much more—turning them from spenders to savers.


  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