As Millennial’s personal finance habits shift consumer living and buying trends, experts and young adults alike are embracing these changes.
However, high student debt, stagnant wages and rising cost of living is leaving some Millennials needing to push off buying homes, getting married and having families in order to invest their dollars on living life in the moment.
“Saving is obviously important, and I believe most people my age do that, but I don’t mind spending more money if it means my quality of life is better. Why live in a suburb where I have to drive everywhere when I can live in a city, walk to meet all my needs, not have a car, and meet amazing people along the way.”
–Giselle Myers, a recent Texas State University graduate and employee at the Greater San Marcos Partnership
Despite many labels given to Millennials, some feel the younger generation is better at saving money, and in most cases, view success differently than their parents and grandparents.
Giselle Myers, a recent Texas State University graduate and employee at the Greater San Marcos Partnership, said personal finance is important, but living a life of fulfillment is an utmost priority.
To Myers, paying high rent to live in a walkable city, not worrying about a mortgage and saving money for travel and experiences is an investment she can get behind.
“Saving is obviously important, and I believe most people my age do that, but I don’t mind spending more money if it means my quality of life is better,” Myers said. “Why live in a suburb where I have to drive everywhere when I can live in a city, walk to meet all my needs, not have a car, and meet amazing people along the way.”
For Millennials, job security is important, but flexibility and amenities in the workplace are increasingly trumping high wages. This includes securing insurance, retirement plans and flexible hours even if it means sacrificing some dollars.
According to a Forbes report, Millenials are seeing lower incomes than Baby Boomers and declining median assets, specifically with student debt.
The report cites a Harvard study which found that 31 percent of Millennials are homeowners, a historically low figure for the under 35-demographic. Fifty-three percent of Millennials struggle to save for a down payment on a home because of debt burden.
Bill Simonet, a Kyle area financial planner, said Millenials are changing the housing market.
Simonet said more Millenials are buying property as a means to make some extra cash in the lodging business. Those who move into a home are not looking for the traditional suburban feel.
“This is a generation that cares about living in communities with amenities, and that doesn’t have to include living in a booming city, but just an area with some sense of work, live and play,” Simonet said. “I’ve been doing financial planning for a decade now and the way this generation views personal finance and living is very different than their parents.”
Simonet said Millenials are much more willing to spend money on experiences and entertainment, rather than a focusing on their lives 40 years from now.
“Their priorities are just different. When I meet with young clients, they worry about retirement too, but focus on how far they can make their money go now because life isn’t guaranteed tomorrow,” Simonet said.
According to a 2018 Pew Research report, American paychecks might be bigger than they were 40 years ago, but purchasing power has stayed stagnant. This has fueled conversations about raising the minimum wage, which in Texas is $7.25 an hour, the lowest in the nation.
After adjusting for inflation, the report found the hourly wage in the U.S. has the same purchasing power as it did in 1978.
“In fact, in real terms average hourly earnings peaked more than 45 years ago: The $4.03 per hour rate recorded in 1973 had the same purchasing power that $23.68 would today,” according to the Pew Research report.
Despite the lack of purchase power, Simonet said Millienials are good at budgeting because they have to.
And as Myers progresses through her career, she reminds herself that in the midst of making ends meet, enjoying the company of her peers is a priority.
Her dream of owning a condominium in a big city may not mesh well with the generations before her, but giving herself the financial freedom to live a life of fulfillment will always go further than the dollar.
