Yahoo Finance Millennials Think They’ve Had It Easier Financially Than Boomers: Are They Right?
Although much has been reported about how difficult millennials have had it financially, millennials themselves don’t all feel the same way. A recent survey of 950 millennials from the CFP Board found that slightly more millennials believe it has been easier for them to achieve financial milestones compared to their boomer parents (41%) than believe it has been more challenging (40%).
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Here’s a closer look at the ways millennials have had it easier financially than boomers, the ways they’ve had it harder and what could be leading to this dichotomy in perception.
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Ways Millennials Have Had It Easier Than Boomers
One benefit millennials have had is easier access to financial information both via traditional and digital news sources.
“Ease of information access from a young age has been a financial advantage for millennials,” said Cicely Jones, CFP, a financial professional with Equitable Advisors. “I’ve seen many millennials with higher retirement account balances than their baby boomer counterparts and I think a big contributor to that is the fact that millennials have been told that they need to save for retirement early.”
Jasen Wallace, CFP, wealth advisor at Exencial Wealth Advisors, also sees access to financial information as a major advantage.
“Access to information democratizes financial concepts like saving, investing and retirement,” he said. “These concepts are no longer gate-kept by professionals, but rather can be explored by anyone who has the curiosity and time.”
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Having access to the internet for their entire adult lives has also helped millennials better navigate all aspects of their financial lives.
“Millennials can track their finances using apps, they can make mobile payments and deposits, and can open a brokerage account in minutes,” Wallace said. “They can search for a home or car or apartment and find their exact match in minutes.
“Millennials have extreme price transparency,” he continued. “They know more about how much things cost versus any generation before them. When they became shoppers, they had eBay. When they wanted music, they had MP3s. When they want to work with a financial professional, they know what questions to ask about fees and expenses.”
Ways Millennials Have Had It Harder Than Boomers
One major disadvantage the younger generation has is the much higher burden of college debt. The cost of college has risen exponentially from the time boomers were in school, so millennials have been saddled with significantly more student loan debt.
“My baby boomer grandfather was able to pay for his entire college education with a part-time job,” Jones said. “That wasn’t a reality when millennials were in college. Many millennials have ended up in significant debt just to be able to get a job.”
In addition, wages have not been keeping up with inflation, while housing has been rising at rates faster than inflation.
“Once they made it out of college, since real wages for starter jobs have been declining, millennials had to make lower inflation-adjusted wages stretch farther to repay their loans and live their lives,” Jones said.
“That, paired with 20 years of historically high housing appreciation, has created a significant barrier to entry for millennial first-time homebuyers,” she continued. “In fact, I’ve observed that many of the baby boomers I meet have significant equity in their homes paired with minimal retirement savings, whereas millennials may have higher retirement account balances but minimal real estate holdings.”
All of these factors have led to high levels of financial stress for many millennials.
“The increased cost of housing, healthcare and everyday needs like groceries and gas can be stressful,” said Lindsay Bryan-Podvin, a behavioral finance expert and consultant for Bread Financial. “Forty-nine percent of millennials say they’ve experienced financially related panic or anxiety attacks, compared to only 26% of baby boomers, according to findings from a national Bread Financial study.”
Factors Affecting Millennials’ Perceptions
The way millennials perceive their generation’s financial standing could be influenced by their own personal circumstances.
“[Factors affecting this perception could include] personal debt levels, whether or not they received financial support from their parents after age 18, current job title, homeownership status, whether they are a young millennial or elder millennial, whether or not they have kids, and marital status,” Jones said.
Some millennials may have seen their boomer parents make great financial sacrifices to allow them to live a better life than their parents did, so these millennials would perceive themselves as having had it easier.
“In most cases, these millennials are the children of working-class, blue-collar parents that prioritized paying for a high-quality education for their children, often at the expense of their own lifestyle and future retirement,” said David Flores Wilson, managing partner at Sincerus Advisory. “These millennials were able to parlay graduation from elite institutions debt-free into successful careers in entrepreneurship, engineering, law and other lucrative areas.”
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