Millennials, in general, are distrustful of saving money the old-fashioned way. Institutions like Social Security, the stock market, and even some types of savings accounts are generally not Millennial favorites. Why is this? Some have suggested that Millennials’ relative wealth inequality when compared to their parents is part of this. What else is going on here?
People born between the years of 1981 and 1996, also commonly known as Millennials, are now between the ages of 24 and 39. They’re also one of the most underpaid and overeducated generations in history when compared to their parents.
Despite being one of the most populous and influential generations in the US, their finances also amount for a fraction of the country’s economy.
This lack of liquid funds has had some serious impacts on the economy. New houses aren’t getting bought by young people, they’re getting purchased by real estate moguls who want to rent them out.
Millennials typically don’t invest in the stock market, or in their own retirement accounts. In fact, many people in this age group don’t have much in the way of savings at all.
Many of the people included in the age group came of age during a time of relative prosperity through the 90s and early 2000s. However, the financial collapse of 2008 sent shockwaves through the economy and the psyche of Americans who were just trying to get on their feet. This cut many opportunities out from under young people who would otherwise already be entering their highest-earning years.
This compounds with another issue: Student loan debt. Many Millennials feel as though they’ll never have a real shot at success because they’re saddled with crippling debts.
Between student loans, car payments, and rent, young people are feeling the squeeze of an economy that seems to only benefit the most wealthy. What are they supposed to do?
Well, they could start by following our advice. Millennials should be investing what money they do have. Sadly, many young people feel as though they’ve been harmed by this system of finances, and want no part in it.
This inherently limits their earning power. Where previous generations were eager to invest and see their money grow, Millennials eye the stock market warily, fearful that their savings could vanish in an instant.
However, investing in the future is the best way to be prepared for it. While Millennials may feel these institutions are evil, they aren’t really out to harm them. They exist to help them grow their financial futures, and there’s no better time to start saving than now.