Everything You Know About Millennials is Wrong: 5 Money Myths About Gen Y
It's a tale as old as time: A new generation comes of age and the previous generation isn't so sure about those new guys. It certainly isn't a fate millennials have escaped. They're a hot topic right now, whether it's the latest technology-based, millennial-staffed, charity-minded startup making you roll your eyes, or another story about student loan debt making you question their financial sense.
But is it all generational fact, or is there some myth behind the gossip? We polled millennials on their financial lives to find out.
Millennials Are Entitled
Is it a myth?: Yes
We've all seen the Saturday Night Live sketch. Millennials just expect to be paid top dollar, take vacations whenever they want, and get promoted quickly, right?
Many millennials first entered the workforce at the worst possible time — toward the end of a recession when the housing market and economy were still on shaky ground. It presented a unique challenge. While other, older generations had a chance to work and save money before the financial crash, millennials were still in school.
Despite the challenges, millennials seem to be finding a way to make it work. Unemployment rates for the generation are higher than others, but those rates have been dropping while more and more millennials have been finding work.
Between 2013 and 2014, millennial unemployment rates dropped 1.8%, while the number of employed millennials increased by 990,000, according to the White House.
And those that are employed aren't pouting (much). Our survey found 24% of millennials thought there were paid very well, while 62% felt they were at least paid fairly.
Millennials Overreact About Student Loans
Is it a myth?: Mostly
Student loan debt is reaching a crisis point. The total student loan debt in the United States topped $1.2 trillion last year, and student loans have increased 84% since the recession, according to USAToday.
But not all millennials have an IOU with the government. Of those who responded to our survey, 37% were carrying student loans, while 63% are not. The amount owed may not be as massive as you think, either — 34% owed less than $10,000, while only 6% owed $40,000 to $50,000.
And they're not ignoring the debts. Of those we surveyed, 33% pay more than the monthly amount due, while 20% did the same when they could.
Millennials Are Irresponsible
Is it a myth?: Yes
Millennials are totes irresponsible — they're not buying homes, or saving for the future, they're just over there shopping online and buying all the latest technology, right? Not exactly.
There may be some Apple Fanboys in their ranks, but most millennials don't seem to be racking up credit card debt to pay for that technology. According to our survey, 55% of millennials who have credit cards carry a balance less than $1,000, while only 12% fall into the $5,000 to $10,000 debt range.
And they're paying it back too. Only 17% are paying the minimum payment each month. Nearly half (41%) pay their balance in full every month.
Our study also showed millennials care about the kind of credit they take on: 52% of respondents said they look for credit cards with no annual fees, 48% look for a low interest rate, and 47% want cash back on their purchases.
They Don't Plan For the Future
Is it a myth?: Yes and no
Many, many financial experts will be happy to tell you that millennials are scared of investing, or flat out haven't planned for retirement. But the truth is more complicated.
Our survey found millennials are divided when it comes to financial worries now — 54% said they were stressed about money, while 46% were not. And they may not have big financial plans for the immediate future. When asked what they hoped to accomplish this year, 24% said they wanted to take a dream vacation and another 24% said they'd buy a new car.
They may also be struggling to overcome their current debts, making it difficult to save for the future. When asked about student loans, 51% said they regretted taking the loans out in the first place. Unsurprisingly, 67% said they'd be saving more money if they didn't have student loans to pay.
And many millennials are planning for retirement now, and doing so in ways previous generations didn't. A recent study found many in this generation prefer individual stocks and independent retirement accounts over mutual funds and hands-off planning. In that survey, 82% of millennials had diversified portfolios with little employer stock (20% of the total).
They Only Care About Social Causes
Is it a myth?: Maybe
Millennials care about social causes. A lot. Whether it's a GoFundMe campaign, or a protest on Wall Street, millennials are likely to flock to and support the causes they believe in and the companies who support those causes.
But as it turns out, no matter what party millennials are routing for, money still matters. In our survey, 54% of respondents said the upcoming election is making them fear for the economy.
Readers, have we changed your mind about millennials, or do you you still believe the rumors? Perhaps you're a millennial, and you'd like to dispel a few myths we missed? Whatever your generation, share your thoughts in the comments below!