December 7, 2018
CNBC found that 57% of Americans have a savings account with less than $1,000. Moreover, only 46% of millennials even have a savings account.
What are the reasons why millennials have such trouble saving? While some causes can be attributed to lack of knowledge, others are outside of their control.
Here’s a brief overview:
- Education: In the U.S., millennials make up the most educated generation, yet it comes with a cost, literally, as education continues to be more expensive. Over the past four decades, tuition costs have tripled. According to the Wall Street Journal, the average student loan debt amounts to $37,172. Plus, a survey found that 28% of students don’t even realize they are in debt when they take out a loan.
- Digitization: With both the ease of getting a credit card, plus the nature of online bills, millennials are increasingly facing debt. With digital bills, many don’t account for upcoming costs, and therefore, are past due and end up accruing interest. With interest rates rising, this causes more debt, faster.
- Employment: Despite being the most educated generation, millennials face high levels of unemployment. Furthermore, as the cost of living rises, wages remain stagnant, having increased by only 9% in the last three decades.
Despite this somewhat dismal outlook, there’s still a silver lining of hope in that financial knowledge and applications to assist with planning are now more accessible than ever. With just a little bit of effort, those who want to can learn how to become financially stable and savvy.
For comments, questions or concerns, please contact Daniella Soloway