Why Millennials are Facing More Financial Anxiety Than Ever

There’s a popular cartoon meme, “Me vs. My Parents,” that compares “my parents at age 29” to a millennial at the same age (“me”). The 29-year-olds of yore are always making adult decisions — buying a house, having a baby, investing in a 401(k) — while the millennial contemplates getting a cat or a plant. The punchline is that the millennial won’t grow up. Or can’t afford to, depending on whom you ask.

Broke millennials have been the subject of hand wringing and the butt of jokes since they first began entering the work force in the mid-aughts. The clichés are getting old, but at this point so are we — I’ll be 38 this year, also known as a “geriatric millennial.”

“I currently make $16.50 an hour, which is not enough for me to live on.”

Americans born between 1981 and 1996, the most educated and most diverse generation in U.S. history, were once considered harbingers of economic progress and promise. But now, even well into their careers, most of them lag behind the financial and familial strides of previous generations.

By the time our parents (baby boomers, typically) were our age, most of them were already raising us. But the majority of millennials aren’t yet married, let alone having children. One reason, of course, is lack of money. They are contending with a student debt crisis and staggering racial wealth inequities. Kneecapped by the Great Recession, the average millennial in 2016 was earning about 20 percent less than baby boomers did at the same stage of life.

That wage gap casts a long shadow over what millennials can save and invest. By 2019, Americans born in the 1980s were 11 percent behind wealth expectations based on previous generations. (And that was good news; the deficit was 34 percent just three years earlier.) Meanwhile, loans rule their lives: The debt-to-income ratio of Americans born in the 1980s is higher than any other birth group, making them especially vulnerable to financial setbacks. Now that most millennials are in their 30s, a point when many of their parents were able to own homes, they’re squeezed between the worst inflation rates of their lifetimes, eye-watering housing prices and the precarious fallout of the pandemic.

I spent the past several months speaking to more than 30 millennials from around the United States about their finances. Their anxieties were palpable, and painfully familiar — many of them felt behind, indebted, unable to live up to the expectations placed upon them. Even those who were doing well were vigilant.

But they’ve adapted, too. They may not have the same access to the benchmarks of adulthood that their parents did, but they also want different things.

Those solid, dependable careers that allowed previous generations to prosper? They aren’t what they used to be. I interviewed multiple teachers, a nurse and a doctor who had all quit their jobs because they were burned out, underpaid or felt unsafe. Many people also mentioned that they place a higher priority on their mental health than their parents did, often out of necessity — financial insecurity is stressful.

I was expecting more of a pity party (millennials are known for their navel gazing, after all). But instead, most people were making do. Perhaps it’s because they knew they weren’t alone. The internet has armed us with (sometimes questionable) knowledge of what we should be doing with our money, if we have it, but it has also broken the taboo of discussing finances.

Multiple people said that their families rarely talked about money when they were growing up; unease simmered under the surface. Now, Facebook groups and social media influencers encourage their followers to share how much debt they’ve paid off and post tips on budgeting methods. These invitations to compare can be discouraging, but they also promote dialogue, community and encouragement — things millennials know well.

Other takeaways that were notable, if not surprising: Most people I interviewed who could buy a home did so with help from their family, usually because they lived with their parents to save up. Those who were single often reported that their debt made dating difficult. And many said they were putting off children for financial reasons, if they hoped to have them at all.

The general mood was one of resilience. The lucky ones knew they were fortunate to have a leg up; the unlucky ones weren’t dwelling on it. When I asked how much money they’d need to be able to do the things they wanted, most people said around $75,000. No one was asking for the moon.