Millennial’s Financial Situation is More Nuanced Than we Think

Photo by Helena Lopes on Unsplash
Millennial households (married couples) are actually making more money than previous generations

There have been three narratives about Millennials financial situation that have been making headlines the past few years.

Narrative #1: The “Millennials are irresponsible” narrative. This has been argued mostly by baby boomers who think Millennials spend all their money on avocado toast.

I mostly reject this narrative. Are many young people irresponsible with money?


Do you know who else is irresponsible with money?

Baby boomers. Who have done a terrible job saving for retirement and are retiring with more debt than any previous generation.

What’s that saying about rocks and glass houses?

Narrative #2: The “Millennials are hard-done-by” narrative. This narrative points to the record level costs of education and housing that are settling younger people with huge amounts of debt compared to their parents.

If you have looked at the numbers, it’s difficult not to acknowledge that Millennials face unique financial challenges that previous generations did not.

Combine high monthly student loan payments, with high housing costs and sticky wages and what do you get?

A generation with historically low levels of disposable income.

I’d also point out that as reported by the Wall Street Journal Millennials are spending more money than previous generations on caring for elderly parents.

Narrative #3: The “Millenials are doing just fine” narrative.

I’ve argued in the past that Canadian Millennials are doing better financially then we might think.

  • Millennials have inherited a similar labor market as their parents (although there is a huge split between old Millennials and young Millennials)
  • Millennials access to the digital and sharing economies provides a unique advantage
  • Millennials have more job security than we might think
  • Millennials are driving entrepreneurship in today’s economy
  • Female Millennials are paid more, participate in the labor market more, and have made gains in traditionally male-dominated roles compared to their mothers
  • Due to historic low-interest rates, millennials are more (not less) likely to own a home then their parents were at the same age. Although this is a double-edged sword because as previously mentioned they are house poor.

“Old” Millennials Faced Greater Challenges Than “Young” Millennials

The Millennial generation includes anyone born between 1981 and 1996. That is a huge age range and there is a significant distinction between Millennials born in the 1980s and the 1990s.

Millennials born in the 1980s (myself included) were more likely to be entering the workforce in the aftermath of the financial crisis. As a result, they have lower income and fewer assets than previous generations. I have written before how the financial crisis has scarred “older” Millennials.

But out of the ashes of the financial crisis grew the Financial Independence, Retire Early (FIRE) Movement.

Younger Millennials, on the other hand, have begun their career during a much friendlier job market. In addition to that had never known a world without the internet, a best placed to thrive in the digital economy.

Put simply, 90’s kids have it better than 80’s kids.

The Group Of Millennials Doing the Best

While incomes for individual Millennials is lower than previous generations, Millennial households (married couples) are actually making more money than previous generations according to a recent study.

Millennials married couples are doing so well for two reasons

  • Millennial women are working more hours compared to previous generations
  • Millennial women are paid better compared to previous generations

The Wildcard: Millennial Inheritance

According to one estimate, Millennials are set to inherit over $30 trillion in wealth from their parents and grandparents. That would be more than any other generation has inherited.

$30 trillion will buy a lot of avocado toast.

This article is for informational purposes only, it should not be considered Financial or Legal Advice. Not all information will be accurate. Consult a financial professional before making any major financial decisions.