7 of the biggest financial problems millennials face that their parents didn't
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- Millennials are the generation born between 1981 and 1996.
- Because they came of age during the Great Recession, millennials are dealing with a number of financial problems.
- Some of millennials' most critical money problems are student loan debt, inflating living costs, unexpected expenses, and needing to save more for life milestones.
Defined as the cohort born between 1981 and 1996, millennials are the generation known for being tech-savvy, pursuing their passions, and killing a bunch of industries. They're also known for shouldering a number of financial burdens specific to their generation.
This is in large part due to the fact that millennials grew up or entered the workforce during the Great Recession, creating unique financial challenges.
Even though millennials benefited from a 67% rise in wages since 1970, according to a Student Loan Hero report, the increase hasn't kept up with inflating living costs. That's not to mention that millennials are bogged down with student loan debt, are working to catch up on lost income, and have to save more for life milestones, like a buying a house and retiring.
But many millennials are so strapped for money that they are relying on others — like their parents or grandparents — for financial help.
Below, see some of the most significant money issues millennials are facing today.
Millennials are burdened with student loan debt that's higher than ever
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Crushing student loan debt is one of the most notorious expenses burdening millennials. College tuition has more than doubled since the 1980s; as a result student loan debt is at an all-time high, with the average student debt per graduate who took at loans at $17,126, Business Insider reported in November.
Not only has the number of students taking out student loans increased by 10% from 2000 to 2012, according to a report by the American Academy of Arts & Sciences, but students began borrowing more money too — the median cumulative loan amount rose to $20,400 from $16,500 in that time.
Millennials have to save longer to buy a house
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Home prices are on the climb and millennials are paying for it — literally.
Millennials buying their first home today will pay 39% more than baby boomers who bought their first home in the 1980s, according to Student Loan Hero. In fact, the value of homes has increased by 73% since the 1960s, when adjusted for inflation.
Maybe this is why homeownership among millennials is at record low — they have to spend more time saving money to buy a house. In some cities, it can take nearly a decade to save for a 20% down payment on a house, according to a SmartAsset report.
Millennials are shelling out money for soaring rents
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Meanwhile, many none-homeowning millennials are devoting their hard-earned cash to soaring rents.
Rents increased by 46% from the 1960s to 2000 when adjusted for inflation, according to Student Loan Hero. In 1960, the median gross rent was $71, or $588 in today's dollars. By 2000, that number rose to $602, or $866 in today's dollars.
See the rest of the story at Business Insider
See Also:
- The best and worst states for paying off student debt, ranked
- An American family who moved to Nicaragua for a year to live cheaply ended up blowing their $30,000 budget thanks to unexpected costs — but still spent less than life at home in the US
- It looks like it's not just crushing student loans holding millennials back anymore — it's also their aging parents
DON'T MISS: More than half of 20-somethings still count on money from their parents to pay their bills