Why Millennials are Facing More Financial Anxiety Than Ever

“A lot of us were raised with this mentality of, ‘Find your passion, be happy, the money will follow.’”

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.

“I owe about $144,000 in student loans. I would like to repay that money before I leave this earth, but we’ll see what happens.”

A lot of us were raised with this mentality of, “Find your passion, be happy, the money will follow.” I did the starving artist, flailing-around thing for about seven or eight years after grad school, working freelance in theater and arts administration and getting paid $10 or $15 an hour to work in the box office, stuff like that. Even after I moved out of my parents’ house, I constantly had to borrow from them, and pay late fees.

Finally, in 2019, I got a corporate gig with benefits. Then I got laid off in April 2020 because of the pandemic. I moved back in with my parents again, to save money. And I decided to take that time to make a pilot of a podcast that I had been work-shopping for a little bit. I submitted it to some folks that I knew, and it eventually made its way to Spotify and they bought it. So, almost exactly 10 years after I graduated, I got my “big break.” My career feels like it’s just starting now. Things are finally coming together.

What I made as the executive producer of my show for the first season is comparable to what I was making in my corporate job. And now, for the second season, I’m making more. Just being able to pay my rent and buy groceries without having to work 10 different jobs is miraculous.

Cobbling everything together, I’d say my take-home annual pay is between $60,000 to $75,000. It’s not like I have a yacht now, but I’m able to afford my own apartment. I’m able to live off of my creative work, which I was never able to do before.

I think the next step would be to start saving up an emergency fund. I don’t have a car. I don’t buy clothes. I’ve been wearing a lot of the same things since college. I don’t need stuff. That’s not why money is important to me. But I do like the feeling of not having to rely on other people, or rely on chance. Like, maybe if I buy this scratch-off, I’ll have the last $200 to pay my rent this month. That’s a horrible feeling.

Works in sales at a luxury car dealership

College was a great experience, good times, but I graduated with $70,000 of student loan debt. I still owe maybe $60,000. I get paid on commission, so my income fluctuates, but I’ve been earning in the six figures for the past three years now. The pandemic didn’t hurt us at all — people are still buying cars. I’m starting to get my financial footing. My goal used to be, “I want to hit $100,000.” Then you hit $100,000 and it feels like the new $40,000.

“Now my credit score is good. We’re here, and we’re not going back.”

I’m learning to buy what I need, not just what I want. The turning point was fighting for my sons in the family court system, and seeing how much money that took. Attorney’s fees, court fees, it’s a lot. That was eye opening. It made me realize, you need money in this life.

My biggest financial worry is health stuff. I had a major surgery last year. Thankfully we have insurance through the state, and it’s affordable — I pay about $380 a month. But looking down the line, it’s nerve-racking. We’ll be able to afford, like, a year in a nursing home, and then we’ll be out of luck, I guess.

I make $150 a day, three days a week. So at the end of the week, I have $450 from that. And I supplement that with theater and television gigs. In total, I probably make about $2,000 a month.

It’s expected, the stereotype of the actor working as a waiter. The bills have to get paid, and if there’s no work around, you have to look outside the industry. My game plan is to just call my temp agency and be like, “Hey, what do you have for me?” That’s what I’ve done before.

If I had more money, I’d probably put it into investments. I have an I.R.A. It’s not a big amount. But I try to put in $300 to $500 a month. I do have a small stock portfolio, but I think it’s a little over $1,000. I even owned a little bit of crypto, but only about $200 worth; I recently divested. And my wife and I have a joint savings account for emergencies, like if the car crapped out. I think there’s about $6,000 in there

Another Millennial said: I didn’t go to actual college, but I went to a technical watchmaking school. I applied three years in a row and finally got in. They took only 12 students a year, and it is paid for once you are accepted. But you have to buy your own tools and equipment, which was close to $10,000 at the time, and pay for your own room and board.

During school, sometimes I only got 10 hours of sleep the whole week, because I was bartending at night and going to class all day. I graduated in 2009, during the recession. I moved back to Michigan and found myself unemployed. I was about 22 at the time.

Most watchmakers earn between $60,000 and $70,000, and I make on the upper end. I’m in the process of trying to start my own business. I’ve spent essentially my life savings — whatever I haven’t spent on my house — on tools and equipment throughout the years. I’ve spent probably $70,000 to $80,000 on it all. I want to consolidate all my tools into one complete studio where I can make my own custom pieces. That’s my dream.

Sometimes I feel like I sacrificed having a family for the growth of my career. By the time he was my age, my dad had five kids and a wife. I can’t even imagine having all of those financial obligations. I constantly feel like I’m behind where I thought I would be. But starting a business, that’s going to put me in a situation where I don’t know if I’ll be financially stable. And if I had a family, how could I put them through that? Still, I want to have a family so bad. It’s definitely a goal.

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Cliff Morton

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