Challenges & Opportunities for Millennials & Money

Dec 2019

I am a millennial and to be totally honest, the label “millennial” often makes me cringe, mostly because we have been given such a bad rap in pop culture and the media. We have been called “Generation Me” for our presumed self-centered tendencies and the “Peter Pan Generation” for our delayed adulthood. The image of millennials is that we are a bunch of entitled, debt ridden young American’s who rely on their parents for money. But we are also a generation that came of age in the midst of 9/11 and the subsequent wars in Iraq and Afghanistan. We entered the workforce during the financial crisis of 2008 and we are the last generation to witness life before the internet.  As a parent, I often find myself thinking about how I will one day explain to my children, Theo (2.5 years old) and Harper (6 months old), what life was like before the internet and how they will even imagine a world like that.

I think it’s fair to say that we as millennials have a variety of challenges as it relates to securing our financial futures but we also have unique opportunities that are often overlooked. Here I would like to explore some elements of both.

The Challenge:

Millennials, more than any other generation according to Schwab’s 2019 Modern Wealth Report. feel the most insecure when it comes to their finances.

Why? Well for one, we are being crippled by debt. As a generation we, we have taken on 300% more debt than our parents. College tuition has doubled since 1980 and the average student loan amount for 2019 is a staggering $35,359.

While millennials have benefited from a 67% rise in wages since 1970, this increase hasn’t kept up with inflation. Additionally, home prices, rents and college tuition have all increased faster than incomes in the United States.

Which means as a generation we are delaying home ownership. Millennials buying their first homes today will pay 39% more than baby boomers taking that same step in the 1980s. I guess it’s not a surprise that homeownership amongst millennials is at a record low. In some cities according to a recent report it can take a decade to save for that 20% down payment. I have personal experience with this one. My husband and I, after living and working in New York City for nearly 8 years decided to leave our lives and move home to Michigan. I was pregnant with our son when the reality set in about what kind of home we could buy in the Big Apple.

The last and probably most important challenge is that we millennials are significantly behind the ball in saving for a very costly retirement.  It used to be that $1million was considered the gold standard of retirement. The reality is that it is only a fraction of what most millennials will need. For instance, a 67-year-old baby boomer retiring now with $1 million in the bank will generate $40,000 a year to live on adjusted for inflation and assuming a sustainable withdrawal rate of 4 percent. However, a 32-year-old millennial planning to retire at 67 with $1 million would live below the poverty line (not accounting for social security and other sources of income).

This means that millennials need to save even more for retirement. Health care costs are only going up, we are living longer and have more expensive habits (like travel and luxury goods and services) then our parents’ generation. The problem is that according to Vanguard, which manages 401(k) accounts for 4.4 million Americans, 32-year-olds are only saving 5.3% of their income.

The Opportunity:

While the challenges are significant, often overlooked are the unique opportunities for millennials.
Technology and the Internet have lowered the barriers to entry in many businesses and allowed millennials to tap into their entrepreneurial spirit and change the nature of work. Working from 9-5 in an office with a desk, a secretary and a desktop computer seems almost archaic amongst the millennial workforce. Technology has allowed us to work from anywhere and everywhere and that flexibility seems to be increasingly more appealing than traditional forms of work.

My own personal experience is also indicative of this. After graduating college in 2007 I went to work for a political consulting firm in Washington DC. After a few years of learning the business I felt that I could open my own shop, charge less and provide better service.  The story of my success wouldn’t have been possible without technology. I was able to service clients from all around the country using tools such as a laptop, online software and video conferencing.

Millennials also have unprecedented access to information and resources because of technology.  From dating, to ordering food, and groceries to streaming movies and shopping on our smartphones, Millennials are accessing technology and using it for nearly everything. We are also able to apply this to our personal finances. With apps and websites like Mint ( Acorns ( , Qapital (, You Need a Budget ( and many others, it has never been easier to access information about how to get your financial house in order.

By far the most important opportunity we have is time. Time is the most essential element to create wealth and as Millennials we have quite a bit of time for our investments to grow and compound into larger sums. There are so many benefits of investing early and often but unfortunately too many of us are sitting on the sidelines. There is no better time than now for my fellow millennials to educate themselves, figure out their risk tolerance and set aggressive goals to put themselves on a path towards financial freedom.

If you know any millennial seeking advice or assistance with their financial future please have them contact us, we are here to help!



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