When you ask millennials if they think their lives are tougher than those of the previous generation, most will say “yes.” As part of this generation, it often feels like the odds are stacked against you. Things that seemed easy for your parents or grandparents now feel nearly impossible, making it hard to stay positive.
Some changes in our world have been good, but some have hit millennials particularly hard. Financial stability is one such issue. Saving, investing, budgeting, and cutting costs can feel unrealistic when even basic needs are hard to meet. Budgeting, crucial for financial stability, often seems out of reach for millennials.
To budget effectively, young adults need to understand the challenges they face. Here are five reasons why millennials often find budgeting difficult:
1. **Underemployment**
The job market has changed a lot in the past thirty years. It used to be that you could work your way up the corporate ladder starting from an entry-level job. Today, things are different. The 2008 economic downturn changed the job market, making it so that even entry-level positions often require a degree and relevant experience. Young job seekers now find themselves competing with experienced professionals from older generations. Lower-paying jobs are more common for millennials, making it hard to find full-time work.
2. **High Student Loan Debt**
The cost of higher education has skyrocketed, leaving many millennials with significant student loans. Starting their careers with this financial burden makes budgeting seem pointless. Large debts combined with limited high-paying job opportunities put them at a disadvantage.
3. **Limited Financial Literacy**
Most school curriculums focus on subjects like reading, writing, and math, while personal finance is often ignored. Many young adults don’t learn how to manage their finances until they have to do it in real life. This lack of knowledge makes budgeting seem complicated and tough.
4. **Maintaining Appearances**
Social expectations can be a big burden, driven by a society obsessed with luxury lifestyles. Without enough resources, many millennials use credit cards to keep up with their peers, leading to more debt. They feel pressure to match the lifestyles of friends and celebrities, often prioritizing appearances over essential needs.
5. **Struggling with Financial Independence**
Debt and underemployment leave many millennials unable to support themselves, resulting in them living with their parents into their late twenties. Without having to pay rent or bills, it’s easy to ignore financial responsibilities and lose the habit of budgeting. Living at home can create a false sense of financial security, leading to potential misuse of money.
Budgeting can be challenging even for well-established adults. Given the financial and professional difficulties many millennials face, it’s easy to see why they struggle with budgeting. Despite these obstacles, creating and sticking to a sensible budget is still the best way to achieve future financial success.
Do you think millennials have a hard time budgeting? Let’s talk about it.