MUCH CRITICISM is leveled against millennials, often defined as those born between 1981 and 1996. The criticism is frequently directed at their money and career decisions, including their purportedly foolish spending, excessive borrowing, job-hopping, self-absorption and sense of entitlement.
The perception is so pervasive that even millennials buy into this view of themselves.
But I wouldn’t be too quick to criticize millennials or compare them unfavorably to older generations. Each generation confronts its own unique challenges and difficulties, so it’s unfair to judge one generation’s choices based on what the previous generation did. How any generation turns out is largely a byproduct of two influences: the unique set of circumstances they face and their upbringing by the generation before.
While baby boomers grew up in a world of relative security and steadily increasing prosperity, millennials grew up with the global uncertainty wrought by the Sept. 11 terrorist attacks. They came of financial age during the Great Recession, the most severe economic downturn since the Great Depression. They saw the impact of a dramatic decline in property values—touted by the previous generation as one of the safest investments. They also saw the collapse of major companies like Enron, Lehman Brothers and Countrywide. Told that the pathway to success was through higher education, they faced explosive increases in tuition, with the cost of attending a university increasing nearly eight times faster than wages between 1989 and 2016.
According to Pew Research Center, millennials suffer higher levels of poverty, student loans and unemployment, along with lower levels of wealth and personal income, than the two prior generations had at the same stage of their lifecycle. The upshot: They are the poorest generation since the Second World War.
A survey by TD Ameritrade shows that how parents handle money influences their children’s spending habits. If we don’t like millennials’ lifestyle choices, maybe it’s the way we parents raised them. Hiring a limousine to haul seven-year-olds around for a birthday party? Spending thousands of dollars for a coming-of-age party, prom, homecoming or other event “because they’re only [insert age] once”? Eschewing community pools and public parks for far more expensive entertainment alternatives? These all send powerful messages that contradict parental messages to “spend wisely.”
So are millennials bad at money? Given these influences and circumstances, one might perhaps excuse millennials for being “worse” with money than previous generations. But in fact, the data suggest otherwise.
Despite the general notion that they aren’t good at managing money, at least one survey indicates that millennials are as good as, or even better than, other generations when it comes to managing money, and that they are increasingly getting their financial houses in order. The survey even showed how the savings trend is growing: In 2015, only 33% of millennials had $15,000 or more saved and only 8% had at least $100,000. By 2018, 47% had $15,000 or more saved and 16% had at least $100,000.
These figures are even more impressive when you realize that millennials started adult life with a huge disadvantage: hefty amounts of debt. The greatest sources of millennial debt are student loans and credit cards, a reflection of increased college costs, depressed wages during the Great Recession and higher housing costs. Who got all those credit cards for millennials, when they were naïve about money and often still in high school? That would be us, the older generation.
As a result of all this debt, millennials are more likely to delay buying a home, saving for retirement, getting married and having children—this despite outpacing other age groups in taking on extra jobs to pay off debt.
Another stereotype about millennials is that they have less of a stick-with-it attitude and tend to be job-hoppers. But consider a Pew Research Center study comparing millennials to the prior generation, Gen X. The study found millennials aren’t job-hopping any faster than Gen X did. It also found that, among the college-educated, millennials have longer track records with their employers than Gen X workers did in 2000, when they were the same age as today’s millennials. For less-educated populations, millennial tenure was similar to Gen X. The report concluded that the “job-hopping millennial” characterization doesn’t fit the broad millennial workforce.
Another survey shows that millennials advocate for themselves at work more than both Gen Xers and baby boomers. Roughly half of millennials (46%) have asked for a raise in the past two years, versus 36% for Gen X and 39% of baby boomers. This might reinforce the perception that millennials think too highly of themselves. But 80% of millennials who asked for a raise in the past two years received one, suggesting the requests weren’t unfounded or based on imaginary accomplishments. Their older supervisors apparently agreed.
Throughout history, each generation has been criticized by the prior generation as lazy, entitled, selfish or shallow. But is this a result of generational decline or just a developmental issue of youth? The incidence of narcissistic personality disorder is nearly three times as high for people in their 20s as it is for those age 65 or older, according to the National Institutes of Health. The upshot: Every generation is “generation me”—at least when they’re in their 20s.
Last year, at age 53, Jiab Wasserman left her job as a financial analyst at a large bank. She’s now semi-retired. Her previous articles include Cutting Corners, Fast Forward and Living for Less. Jiab and her husband Jim, who also writes for HumbleDollar, currently live in Granada, Spain. They blog about downshifting, personal finance and other aspects of retirement—as well as about their experience relocating to another country—at YourThirdLife.com.
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