While American millennials are financially behind previous generations, outside factors presented this demographic with financial struggles that previous generations didn’t deal with.
The oldest millennials took the brunt of The Great Recession head-on. Younger millennials entered at a better economic time, but still face their own financial challenges.
According to SmartAsset, the average American millennial earns $35,592, which when adjusted for inflation, is an estimated 20 percent lower than the average salary for a baby boomer at the same age.
This lower individual income, along with student loan debt and stagnant wage growth, are contributing factors to millennials having an average net worth of about $8,000. According to the 2018 Country Financial Security Index, 53 percent of Americans ages 21 to 37 have received financial assistance from a parent, guardian, or family member.
Despite having a smaller pile of cash to work with, millennials are proving to be more dedicated to saving than previous generations, and more disciplined with financial planning and sticking to a budget.
As a result, millennials are delaying homeownership and renting longer, getting married later and having kids later in life.
Millennials also define wealth differently than previous generations. Their generation is less driven by consumerism and owning things, and more by the value of experiences. They prioritize living a rich life ahead of being financially rich.
While millennials are literally paying their dues now, the future is bright. Improved economic conditions, the anticipated great wealth transfer coming from baby-boomer inheritances, good savings habits, and low unemployment rates means they can catch up.
Also, while earnings are less for individuals, a study by the Pew Research Center showed millennial married households are earning more than previous generations. This is why millennials have been labeled as both the poorest AND richest generation.
Nothing comes easy in life, and millennials were dealt a bad hand with some financial challenges that they inherited from previous generations.
However, as the largest living generation with an increased income as they age up, an affinity for paying off debt and a healthier attitude toward their money, millennials will experience better times ahead.