Known as Generation Y, those born between 1981 to 1996 are wrestling against an unpredictable economic outlook largely influenced by decades of stagnant salaries, the Great Recession, the COVID-19 crisis, and an erratic stock market. Today's millennials are standing at the forefront of an expanding wealth chasm in the United States, making their journey into adulthood or middle age – particularly for those born in the 80s – all the more financially challenging.
Despite being often labeled as self-entitled and materialistic, many millennials believe they are unlikely to attain traditional milestones such as securing dream jobs, owning homes, or retiring early, at least not as quickly as their parents did. The mounting burden of repaying student loans is becoming an uphill battle especially for those grappling with joblessness or low income.
The Great Recession left around 15% of millennials in their early 20s unemployed, many continuing to pick up the pieces even today. Studies looking into the financial impact of joblessness during the recession of the early 1980s showed that individuals affected were still playing catch-up financially two decades later.
The pandemic has further exacerbated these financial woes. A 201 study reported that one in three millennials felt less confident about retiring at their target age because of the pandemic.
Most millennials are adopting a global perspective when it comes to managing their money, choosing to follow their instincts or peers when making investment decisions. An Investopedia survey of affluent millennials-those with a median income of $132,000 – revealed that 65% trust financial advisors.
Despite growing trends in the financial industry to tie compensation to investment performances rather than commissions, many millennials seek a personal interaction with those managing their money.
Millennials are now the largest segment of new home buyers, contributing 37% to the total US housing market between 2019 and 2020, according to data from the National Association of Realtors.
Under the influence of social media, some millennials are also investing in cosmetic enhancements, with a 2020 survey by the American Academy of Facial Plastic and Reconstructive Surgery showing a surge in patients under the age of 30 desiring injectables or plastic surgeries.
Although salary still is a deciding factor for millennials scouting jobs, they also prioritize freedom, respect, and fairness in the workplace. Moreover, their digital savvy gives them an insight into what their peers and superiors earn and the benefits they enjoy, further influencing their career choices.
According to the U.S. Bureau of Labor Statistics, the median income in 2020 for millennials aged 35-44 was $85,694. Millennial spending habits majorly revolve around food and beverage, traveling, repaying student loans, and more recently purchasing their newfound homes. An uncertain future lies ahead for millennials burdened by heavy debts, but many have found opportunities in buying property and exploring unconventional careers, and are redirecting substantial funds into retirement schemes.