Millennials have now surpassed baby boomers as the country’s largest generation. Depending on who you ask, those born between 1982 and 2004 count among the ranks of millennials, while others define millennials as those born between 1981 and 1997. Regardless of how you define the cohort, the great recession has split the millennial generation into two distinct groups with very different habits based on finances.
“Facing a stark set of financial circumstances, millennials started adulthood with less room for financial mistakes than previous generations,” Shannon Insler wrote in an article for Student Loan Hero. “In response, they are managing their money differently. More millennials are refinancing student loans, delaying a home purchase, and looking for creative ways to earn more money through side hustles.”
Older millennials, those over 30, were hit hard with the financial crisis with a tough job market and stagnated wages. On the other hand, younger millennials under 30 experienced the recovery period, entering a better job market but risk-averse from witnessing the recession.
- The average American millennial makes $35,592 a year. Adjusted for inflation, that’s an estimated 20% lower than the average salary for a baby boomer at the same age, according to a SmartAsset study.
- American millennials have an average net worth of less than $8,000, meaning they’re financially worse off than any other generation before them.
- While millennials have benefited from a 67% rise in wages since 1970, according to research by Student Loan Hero, this increase hasn’t kept up with inflating living costs: Rent, home prices, and college tuition have all increased faster than incomes in the US.
- A survey by Insider and Morning Consult found that while 70% of millennials have a savings account, 58% have a balance under $5,000.
- Most millennials don’t carry credit card debt or owe less than $5,000.
- Nearly 45% of millennials have student loan debt. The graduating class of 2018 has an average student loan debt of $29,800.
- 5% of millennials stick to their budget and are more dedicated to saving than older generations.
- According to a recent Merrill Lynch Wealth Management report, only 19% of millennials and Gen Zers define financial success as being rich—60% define it as being debt-free.
- 53% of Americans ages 21 to 37 have received financial assistance from a parent, guardian, or family member since turning 21, according to the 2018 Country Financial Security Index.
- About 37% of millennials receive money on a monthly basis, and more than half (59%) receive money several times a year.
- The financial reality along with the experience of the great recession has resulted in millennials navigating traditional life milestones differently. They are renting longer and getting married and having kids later in life.
- Most millennials say they don’t define wealth primarily as a number: More than three-quarters of millennial respondents said feeling wealthy isn’t about the dollar amount but about how they live their lives.
- Eventbrite found that 78% of millennials respondents would rather spend money on an experience than a thing, and 77% said their best memories come from experiences, Business Insider’s Libby Kane reported.
While brands have focused on lifestyle and consumer behavior, the financial reality of millennials and their relationship with money cannot be overlooked. This reality has led to a revolution in the payment industry that brands and retailers need to address.
Read the full story in Business Insider.
