If you’re a millennial, it’s high time to spend fewer hours on leisure social media and more on income-generating ideas such as automotive business opportunities. Your lot, it turns out, isn’t doing well in personal finance.
What the Numbers Are Saying
Millennials or Generation Y are the people born during the early 1980s to the late 1990s. By this time, many of them are already working or building a family. They are now significant contributors to the workforce and the economy.
And yet they do struggle with their finances, according to a 2019 Charles Schwab report. More than 60% of them are currently living paycheck to paycheck while only 38% said they are financially stable.
Overall, less than 40% of the respondents built an emergency fund. Almost half of them had a remaining credit card debt.
They were more likely to deal with financial hardships than other generations, such as Generation X, who came before them, and the baby boomers.
What Is Wrong with Their Finances?
The chaotic condition of millennials’ finances is due to a combination of factors. Some of them are their fault while others are out of their control:
1. Spending – Modern Americans are heavy spenders on non-essentials. On average, at least $500 a month went toward dining out, entertainment, and other wants.
Millennials are also more likely to be influenced by what they see on social media. Around 72% of them wondered how their friends could afford expensive items they posted on their feeds. Only 60% of the other generations besides Z generation had the same behavior.
Around 48% ended up spending more than what they could afford to share experiences with their friends. They even beat Generation Z in this habit.
2. Debt – Millennials have to deal with some of the most significant debts in U.S. history. Take, for example, student loans. The group had the third-highest average balance for student loans. On average, each owed about $34,000 during the first quarter of 2019.
They also had the second-highest increase in student debt balance since 2018. Within a year, it went up by 8% from $32,035. It’s not surprising why it will take them at least a decade to pay it off.
The other debt is the mortgage. Experian reported they’re about to overtake different generations when it comes to who owes the highest housing debt level. A significant reason is the increasing home price.
A Reuters poll suggested that the prices will increase twice as fast as inflation and pay rates. In other words, not only are homes going to be expensive, but millennials might also hardly afford them.
It then becomes imperative for this generation to do and think more with personal finance. The basics still apply: reduce the spending, pay off debts as quickly as possible, and, most of all, raise their income.
Opening themselves to business opportunities such as franchise is a step toward that direction. They can receive guidance from the experts to help them in money management. They can boost their incomes depending on their needs.