You heard it here first: Millennials are closer to their 40s than their 20s. This second coming of Baby Boomers is realizing yet another economic hurdle looms on the horizon, and for many, the life they expected is a far cry from their everyday reality. This may not be a nameless, faceless topic for you as you’re likely reading this because of a Millennial you know and care for is in this same situation.
For many Millennials, the 2008-2009 Great Recession saw a sharp decline in job availability as their student loans, the largest collective debt conglomerate for U.S. college grads in history, started ticking toward their due date. Approximately 3.75 million Millennials have student loan debt, averaging $30,000 per borrower. (Education Daily, March 2023)
Even with the housing market bubble burst, housing prices are still 310% higher than in 1980 when many Millennials parents bought their first home. (ATTOM, Jan. 2022) This unchecked escalation in housing prices is forcing more Millennials (and their young families, if they have one) to share housing with grandparents and other older family members or continue surrendering their hard-earned money in the form of rent.
In a recent New York Times article, over 1,300 Millennials were surveyed on their thoughts on approaching mid-life. (New York Times, March 2023) The responses strike a strong contrast of perspective from the economic disparity of today compared to many Millennials’ childhood. The late 1990s and early 2000s were an unusually high level of prosperity for a significant number of Millennials growing up in middle-class America. Surely, this economic stability would continue well into adulthood, right? William Strauss and Neil Howe’s 2000 bestseller entitled Millennials Rising: The Next Great Generation observed Millennials as “kids who’ve never known a year in which America doesn’t get richer.” Strauss and Howe described this next wave of coming-of-age Americans as “upbeat,” “optimistic,” and “diverse”. What no one could predict is the series of crises that formed much of the late 20th century - the dot.com bubble burst, 9/11 tragedy, the Great Recession, political upheaval and civil unrest, and most recently, the Covid-19 epidemic.
And yet, there is wisdom in recognizing that we as individuals hold many of the controls for creating a better financial future. Reducing expenses, consolidating debt, making more financially sound decisions, replacing unhealthy spending habits, and prioritizing saving and investing are well-known yet often overlooked steps for creating a stronger financial position. While the degree and amount that many Millennials would want to make those steps seem a bridge too far, the simple act of starting with an even small step is vital.
There is no true predictor of what life will look like 10 years from now, but there is power in deciding to act on a better plan today. If you don’t have a detailed written financial plan in place, that may be the best starting point. Our team of advisors with American Portfolios Denver can help start a conversation that fits your financial goals. We’re here for you to get the guidance and support you need.
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