A 2023 study by LendingClub found that 73% of millennials are living paycheck to paycheck. This means that, for the large majority of an entire generation, money is going out just as quickly as it is coming in, leaving little to no ability to save for their future. This data leads to one big question: is the problem internal or external? Turns out, it’s both.
GOBankingRates spoke with financial experts to discover the four biggest obstacles millennials face in saving for the future.
Trending Now: 10 Best and 10 Worst States for Millennials To Buy a Home
Read More: 7 Reasons a Financial Advisor Can Grow Your Wealth in 2024
Trending Now:
According to Shawn Carpenter, chairman and CEO at Stock Alarm, this external conundrum is just simple math.
“For millennials, saving money often feels like being caught in quicksand,” he said. “Many people are struggling with student loans, exorbitant rent and daily expenses, while their wages remain stagnant, failing to keep pace with the increasing cost of living.”
In fact, data from Securian Financial assessed that each household currently spends $11,500 more in 2024 to maintain the same cost of living as it did in 2021. Saving for the future is difficult when one’s purchasing power is decreasing in real time.
Consider This: 10 Best and 10 Worst States for Millennials To Buy a Home
Millennials came of age being told a secure financial future was as simple as working hard, earning a four-year degree and getting a job. After the Great Recession, however, millennials were stuck figuring out other money-making alternatives — and typically online.
“There is so much information available to them — do they fully understand how to interpret and implement it?” said Brett Bernstein, CEO and cofounder at XML Financial Group.
It is for this reason that Robert Johnson, chairman and CEO at Economic Index Associates, said many millennials fall prey to fads like crypto and meme stocks which have “never been a good place to invest.” After all, anyone can call themselves an expert on YouTube.
Gina Knox, CEO and financial coach, added that many millennials currently think real estate — a prospect that may already feel out of reach for them — is the only way to achieve wealth through passive means and this is simply not true.
The first generation to grow up with the internet, millennials have become accustomed to not only displaying their lives on Instagram for all to see, but tracking the lives of others to see how they compare.
