3 FINANCIAL CHALLENGES SPECIFIC TO MILLENNIALS
Millennials, the generation that includes people born between the early 80s and 90s, have changed the face of the economy and society deeply. They revolutionized the way people access information, travel and do business.
Uber and Airbnb represent this concept perfectly; relying on technology, such platforms are all about the shared economy and help people save money.
Millennials care about their work environment and happiness more than previous generations; it is not unusual for them to switch careers and jobs if they are not satisfied. Millennials also changed the way people interact; with the birth of social networks, they build and maintain relationships online.
Millennials also face financial challenges that previous generations did not encounter, which leaves them severely stressed out. Therefore, the strategies that might have helped previous generations will not help Millennials in reaching the financial peace of mind and confidence they want.
Among the challenges that Millennials face, the following three are the most influential:
Student Loan Debt: The average Millennial has approximately $48,000 in student loan debt. To afford the rising cost of college tuition, Millennials were forced to take out loans to obtain a higher education. The job market for Millennials was not merciful either; with the Great Recession hitting the economy, many Millennials found themselves unemployed and, consequently, have had a hard time paying off their loans.
Low Wages: Many Millennials do not make a lot of money, regardless of their higher education. Even though the unemployment level is lowering, wages are not increasing. In fact, according to the Pew Research Center, “today’s real average wage (that is, the wage after accounting for inflation) has about the same purchasing power it did 40 years ago.” Paired with the high amount of debt they have, Millennials have difficulty saving money.
Social Security is Not a Guarantee: Many Americans rely on Social Security as a form of guaranteed income in their retirement. However, Social Security’s future is uncertain. In fact, 2034 will be a pivotal year for Social Security; in that year, its trust fund will be depleted, and it will only cover 79% of its benefits- unless a Social Security reform takes place. It is important for Millennials to consider this aspect in their plans for retirement, since Social Security might not provide all the benefits that previous generations had access to.
At Educated Wallet, we offer online courses that provide you with the knowledge and tools needed for building a personalized financial strategy. Money Guide for Millennials is a course built and dedicated specifically to Millennials, to guide them through the financial strategies that will efficiently help them in their planning. For more information, visit https://www.educatedwallet.com/courses.