Contrary to what crotchety Aunt Karen might say, millennials are the best savers since before the baby boomer generation. In fact, baby boomers are some of the worst savers in recent history (many of them being our parents). And since we have flat-out rejected the stereotype that millennials can’t save money, let’s explore how they became impressively frugal.
We are the generation rethinking the traditional 30-year working career.
A handful of millennials I’ve spoken with have an exit strategy for their job or career. This exit strategy has come about for a number of reasons. For some, it’s because they cannot fathom doing what they are doing for the next 10, 15, or 30 years. They understand the burnout that is awaiting them–they already started to see it. Because of this realization, they are feeling compelled to give themselves options. For others, it’s because they’ve seen firsthand how shaky a foundation a career can be. Companies fail. Jobs are replaced by technology. Parents are laid-off after 25 years of diligent service. And so millennials understand the danger that comes from putting their search for meaning and a stable financial future in a job.
We are the generation that had college shoved down our throats.
Ask almost any millennial out there and they will tell you some version of the same message: “When I was in high school, everyone went to college. My teachers told me I had to go. My parents told me I had to go. All my friends were going. So I went, too”. It was and remains seen as the number one way to get ahead in the 21st century. And although there are many upsides to attending university, well…
We are the generation that incurred debt at a young age.
Because many of us were compelled to go to college, we accrued an insanely high amount of debt to service the college experience. This led to millennials graduating (or not) with debt they would have to start paying back immediately. The modern day antidote is true: a bank would never give an 18-year old a $100,000 personal loan, but if you drive to the four-year university down the street, they’ll provide it today, no questions asked. This made us realize at a young age that debt (money that was accruing big-time interest), led to two outcomes: number one, many of us ‘grew up’ in a hurry with our finances, causing us to begin the huge effort of paying down the debt, OR, millennials felt trapped that the debt would follow them to their grave. A sense of hopelessness has resulted, and little to no progress is being made on their debt. The complicated financial issue that is post-secondary education has forced millennials to carefully craft their financial tendencies.
We are the generation whose parents weren’t great with money.
Although some baby boomers are beginning to retire, many are continuing to work out of necessity. A lot of boomers, at some point or another, have carried a good amount of consumer and mortgage debt (some still do!). It’s reported that the baby boomer generation has averaged a mere 5% savings over their careers (Business Insider). As their children, many of us see how these choices have done them a financial disservice. We’d like to do better.
We are the generation who thinks differently about the American Dream.
It was once about opportunity and doing better than your upbringing. Then, it morphed into success, the amount of money you made, and what your money could get you: The house. The luxury vehicle. The status and prestige. Millennials just don’t buy it. To our generation, the American Dream can’t be generalized in these terms. According to the research, millennials value experiences more than stuff, and they prioritize adding value and having a purpose more than simply leveling-up as an adult. Putting these priorities ahead of materialism makes one frugal by nature.
We are the generation who became frugal by force.
Because of these circumstances and others (insanely high rent, newly transplanted immigrant, refusal to live paycheck to paycheck) we became frugal. We might enjoy an expensive coffee here and there, but the thought of an endless car payment makes us cringe. We might like happy hour and appetizers once a week, but the possibility of a massive mortgage payment for thirty years is daunting. We may value traveling the world more than the next promotion, but the reality of working a job we despise for decades on end is not a viable option.
In a sense, millennials overcorrected. We have seen the damaging results of what came before and it spooked us. We witnessed the dangerous financial drift that was occurring and yanked the wheel the opposite direction. We are the catalysts who got the pendulum swinging in the opposite direction that it was traveling. In essence, we became frugal out of necessity; we became frugal by force. This is our story.