When you were a kid, what did you think your life would be like as a grown-up? Did you dream of being a firefighter or a doctor? Did you think you’d be married? Have kids? Did you picture yourself driving a fancy car and owning a big house with a pool in the backyard?

Everybody has dreams, and that’s great. I spend my life challenging people to dream about retirement. Dreaming can lead to goals, and goals matched with hard work make dreams come true. But there’s a time when dreams become a problem—when they become expectations.

Millennials and Lifestyle Expectations

As Americans, we’re used to having our expectations met. We expect food at every meal. We expect clean water. We expect a good education. We expect happiness. We expect to get what we want—and we demand it right now. That mindset has been passed down to the Millennial generation as they begin to establish their careers and adult lives.

I have a sneaking suspicion that Millennials (and other age groups) expect to enjoy the lifestyle of their parents—large homes, expensive cars, nice clothes, fine jewelry and fancy vacations—even though it took their parents a lifetime to reach this point of financial security. And as a result, Millennials are not saving enough for retirement.

Why do I think lifestyle expectations are part of the problem? Because that’s what the numbers are telling us.

In a recent survey commissioned by Ramsey Solutions, Millennials reported an average of $30,580 in debt, even though their average income is $55,200. Of the 58% of Millennials who are actively saving for retirement, 39% of them are putting away less than 4% of their income. That’s just $2,200 a year. Why so little? According to them, the two biggest reasons are the cost of living and taking care of their children’s needs.

That’s right. The cost of living is zapping this generation. And I think that’s largely because Millennials are trying to live like their parents—right now.

Looking Toward the Future

Here’s the deal: When you’re just graduating from college and entering the workforce, you’re supposed to live in an apartment and drive an older, used car. You’re supposed to have less money to spend. You’re just starting out! With time, you’ll reach your financial goals just like your parents did—but only if you budget your money, save for big purchases, and avoid debt. Otherwise, you’ll be throwing money away in interest fees instead of putting it away for retirement.

The great news is that you actually have an advantage over your parents. You have more time to save than they do, and that’s a really big deal. If you get rid of debt and spend only when you have the cash, then you’ll have decades to save for retirement. A modest lifestyle now will mean you can enjoy the benefits of your discipline and patience later on. Then you can enjoy the lifestyle you want without being buried by debt.

It’s okay to enjoy your life. You can live in the moment and look toward the future. That approach means you can already be saving for retirement—and possibly enjoy it earlier than your parents did!


  • Alex

    Well, if you ask me, the most critical part of structuring your finances and optimizing savings is just having a plan. Whether you use a spreadsheet or a tool like Geltbox money — you have to get everything out if front of you so you can make smarter decisions. Once you do that, then implementing your disciplined savings strategy becomes critical

  • Danielle

    I AM living in an apartment, driving an older car, and budgeting every month—and I still can’t afford to put anything away for retirement right now. Part of it is my debt, which ALL comes from my education. Without that education, I wouldn’t have been able to get the job I have. I’m not trying to live like my parents, and the last “big purchase” I made was a brake fluid flush for my car. I’m doing everything you’re telling me to do, and I’m still struggling.

  • Katy

    I’ve been very impressed with the young adults in my circle of people. They are doing a great job transitioning into adulthood and none of them seem to be trying to live like their parents. I’ve enjoyed watching and helping them repurpose old furniture, shop at second-hand stores, look for bargains and pick up second jobs.

    • John Agapos

      I agree with you completely. We have to realize that “Ramsey Solutions” is likely going to be approaching a certain demographic, rather than full cross-section of millennials.

      I know my daughters are thrifty in every regard – except when it comes to concert tickets. Crazy musicians seem to be their weakness. They both have more money in the bank than I ever did at their age.

  • Beni

    Hi there. Millenial here 130k in debt from busting my ass in medical school. 25 years ago, my dad went to medical school for 5k a year. Inflation hardly touches the exponential increase in the cost of education. As a resident, my salary is equal to the cost of being a med student in spite of living in hospital subsidized housing and NOT owning a car at the age of 30. I’m doing my best to “get rid of” my debt (you talk as if this is a simple task), but realistically it will be a decade before I can pay this off let alone start saving for retirement. You cite statistics about debt and income as if it’s our fault, even though it’s your generation that discontinued subsidized student loans and your generation who will be living off our tax money when you retire and cash in on social security. My friends and colleagues are all hard workers fresh out of school and strapped with a mountain of debt because not only has the cost of education skyrocketed, but more jobs than ever require a masters degree. For some reason many people in your generation seem to think that millenials are spoiled, extravagant, reckless spenders, without even acknowledging the vastly different economic landscape we’ve gown up in. Tell me, how much was your student loan debt and interest rate? How much was your rent at 30? Or did you already have a nice house with white little picket fence and a shiny new car?

    • LaLunaUnita

      No doubt that your issues are real ones and that you are working your way through tough debt as well as you can. The only number I didn’t see you cite from your dad’s era is his income at that time, though. Do you know how much he was making, since his costs were so much lower than yours? Was his income commensurate with what you are/will be making, or was it also more in keeping with that earlier time of lower tuition/less debt? This does not invalidate the fact that school costs are ridonkulous compared to the 60’s and 70’s, but it would be good to have a data point regarding income at that time, too.

    • AJ

      I’m not a millenial but I finally finished college in the year 2000. I can definitely relate to the skyrocketing college cost that you young people have to deal with. I would suggest that you try to minimize your cost as much as possible, even during your college years.

      At the time that I finished college, I was working overnight security shift at a hotel where I had about 4 hours of downtime to do homework (my boss at the time was happy that I consistently showed up for work every night, so he had no problem with my doing homework while on duty). I also opted to live at home and I attended an in-state public college in the evenings before going to my night shift. Every year when classes started in the fall, I took out a federally subsidized student loan that would cover my college cost for the entire school year. As the school year progressed, I would make payments on the student loan every month (No pre-payment penalty) and by the end of that school year, the loan would be paid off in full. By the time classes started again the following school year, I would do the same thing again. So in essence I used zero percent student loans to pay for college. The day I graduated, I had a full time job in my field of study making twice the amount ($52K, back in year 2000) I was making as a security guard with a balance of zero in student loans. Trade schools are also a great option. One of the high schools in the city where I live offers several of the more lucrative trades (plumbing, electrician, carpentry, etc) as part of their curriculum.
      I’m not saying that it’s easy. The cost of living has gotten out of hand, but you have to be smart about how you take on debt for your education. From what I’ve heard, unless you become totally disabled or you die, the student loan stays with you until you pay it off, so you might as well try to minimize the pain.
      So in stepping down off my soap box, I would suggest that students consider attending community and in-state public colleges, live at home, work overnight security or some other less physically demanding job, and make payments on the loans as soon as you can…even while you’re still in school

    • AM

      Hi, have you considered alternative ways for paying off student loans? My husband has went through medical school and is now in residency, both covered by the military. He is now free and clear of school loans with only a 4 year commitment. He was able to practice for those 4 years in a very structured environment, receive fairly good compensation, and not have to worry about liability insurance. I know it’s not for everyone, but it was a very good option for us. In only 4 years, he was free and clear of med school loans and able to start residency training. He is now in his residency and the military is paying him his usual pay (much higher than typical resident compensation, he has medical covered, and receives a housing allowance).

  • John Agapos

    It’s all about balance. Sure, those out of college can live a Spartan life style with the whole “rice & beans” budget in an effort to pay down that debt ASAP – but at what opportunity cost?

    Nobody wants to pay interest on debt! And you’ve got to do the math to discern if tossing a 1000 in your IRA is a better choice than paying down your debts.

    Ramsey would have you with no credit cards, no score. While that *can* work, if you’re disciplined, you can have a high credit score and take advantage of it at no cost, without paying interest. Have less expensive car insurance. Have the convenience of shopping around for a mortgage. If you’re a family of four, looking for a 3 bedroom house – paying cash for that house in a decent area – for most people – even with a rice & beans lifestyle – those kids will be grown before you can pay cash for that house.

    Unless – unless you’ve been living that rice & beans lifestyle since you were a teenager. If you weren’t – catching up is so tough!

    Do the math. Ramsey is awesome, and his methodology can & will work with time – but you can blend his approach with some pragmatism and come out ahead.

    • Amanda

      hahaha. you wish. Have you lost a job recently ?

      • Danielle

        I’m not quite on the “rice and beans” lifestyle; I cook 99 percent of my own meals (when I want to splurge, I order a pizza from Papa Johns) and I buy quality fresh ingredients as cheaply as I can. Could I go more Spartan than that? Of course I could. I could go true “rice and beans,” eating nothing but, well, rice and beans and the bare minimum of fresh vegetables. But with all of the stress I have hanging over my head with student loans and a crummy economy, why would I punish myself with a boring diet? If I’m going to struggle, I need a good meal to look forward to at the end of a long day. It’s one of the little things that keeps me going.

  • Amanda

    I can only agree with Chris Hogan on only a couple of things, the cost of living is zapping our generation and we do daydream about owning houses. However our parents can afford the things they have cause life was different back then. You didn’t need a associates degree to be a construction manager, plumber etc. College was not 150% inflated and housing was maybe 200$/month for rent, burritos were 3 for a dollar. I call BS Chris Hogan. You look like an educated man who got lucky to have a great job and are only seeing one side of the picture. My husband and I are educated. I drive a 2003 Honda, I live in a apartment, I have a plan.We’re not lazy we work hard. I’ve worked 2 part time jobs that only paid for food and part of rent of an apartment. My husband and I work hard at our jobs but the company I was working for went bankrupt and the small companies where my husband finally found work either couldn’t find enough work or wanted someone more experienced. He cant gain experience if no one will keep him on because they cant afford to pay him. We would save if the cost of living wasn’t SO HIGH. Yes we could move to somewhere were the apartments are cheaper but there also isn’t as many jobs and the money spent in gas to get to jobs would be the same as housing. Also we wouldn’t have a safe place to raise our son away from thugs and drugs. We HAVE TO HAVE health insurance ,car insurance (now mandated by law) ,a place to live and food in our bellies. If I work I have to find child care and most of my paycheck will go to the day care. I shop for deals on groceries. I eat rice beans and cheap discounted manager deals. Yet we can’t save. We don’t go out to eat, drink or smoke. Yet you talk about having a strategy and saving like its the easiest thing in the world, news flash.. its not, and we only have 300$ in debt thanks to grants and my father inlaw helping us. Some millennials have great jobs no spouse and no kids. Yes they can afford luxuries some of us dream about, but most of us don’t and have to rely on our parents who did well during the good times to help us out cause we’re struggling to get by no matter what we do.

  • Ryan

    “Boss, I don’t have anything to write about this week.” – “No big deal, crank out a post that makes sweeping generalizations about ‘millenials’. Those are popular right now, and they’re super easy to write because you aren’t even required to back up your unfounded assumptions about an entire generation of people.”

  • Aaron Ahrens

    I’m reading that a lot of you on here and talking about student debt and living like this article says to. I can relate. Inflation sucks. It does cost far more for education (and housing, and everything else for that matter). However, as someone is the same boat, maybe just a little further along in life, keep doing what you’re doing. It does get better. Struggling financially bc your paying for student debt and “being an adult” is way different that struggling bc you’re a bum and not doing anything with your life. Keep on keeping on and it’ll pay off sooner than you think. Trust me on that.

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  • na5carr3

    Why does everyone think it’s OK to go into extreme debt only to spend a third of your career paying it off. Do the freggin’ math! Sure, provided everything goes as planned you will end up better off in the end but is it worth it? If it is, stop b*tchin about the cost and how much it use to be. Gas used to be a dime a gallon but not anymore. And why is there “supposed” to be some kind of special loan or hand out just because you want to go to school. There are plenty of good paying jobs with benefits that won’t put you in decades plus debt. Millennials want to raise there voice because it is not as it use to be and at the same time flunked math class with a straight A.

  • Sarah

    Some may find it a curse but I guess I am just blessed to have parents who were poor while growing up. I learned to cook and be frugal with money. I want to save so that I never end up in the same situation as they were in. Husband and I avoid debt like the plague even when feeling pressure from parents and in-laws to take out loans or buy a house too early. There really is nothing for me to compare to and say I wish I have what they have. We keep saving and budgeting for a better life.