Millennials in America Do Not Care About Savings

The current average income of young Americans is somewhat a depressing aspect of this generation. The retirement plans are a far cry from what 60 year olds are successfully reaping right now, and to top that off, the rate of employment among millennials is falling.

This is creating an extremely bleak trend line on the charts. Bloomberg recently conducted a poll of Americans aged between 18 and 35. 47% of these people explained that they do not expect to live better than how their parents did. If you take a look at the US consensus data, you will find that 15% of the people aged between 25 and 34 were living with their parents in 2014. This has increased by 10% in the last 3 decades.

This could be because of high real estate prices and extremely strict mortgage requirements. However, according to a professor in Cornell University, even if younger people are living away from home, they might be depending on the financial help from their parents to cover them on a rainy day. This paints the picture of millennials being ‘irresponsible’ when it comes to managing finance.

The people in this cohort, who are weighed down by student debt, are already pessimistic about managing their finances. In the poll, Jessica Xydias mentioned that her husband took out student loans and viewing at their accounts makes his fee ‘insurmountable’ and ‘crushing’. The debt is also a major factor that makes the people put off saving. Xydias also mentioned that it is difficult and close to impossible when it comes to putting money in Roth account.

The only thing that millennials are finding in their favor is the modest economic expansion that they are in the middle of. The senior macroeconomist from PNC, Gus Faucher, mentioned that the expansion needs to a lot bigger for people to support the standard of living required for their children in time.

One great way to restore optimism is to view previous generation’s golden days. Assets and average wage was higher, as they were appropriately adjusted with inflation. However, they did not have the small innovations in their daily life that we cannot live without today: new smart phones, aluminum bodies on trucks, internet facilities, etc.