If you’re between the ages of 21–34 (or around those ages), you’re a part of the U.S. population known as the millennials. This unique group of adults—and the biggest generation in history—is poised to reshape the economic picture in America and the world at large. Why? Because technology is their native language. They use devices to buy and sell. They have information at their fingertips and can look at prices, reviews, and even a company’s reputation in the store before making a purchase.(1)

So what is the financial situation for this newest generation of adults—and the rest of us, too?

Six Unique Factors Shaping Millennials’ Financial Outlook

This generation is unique—and I’m not just talking about tattoos, social awareness, and specialty drinks. These adults are facing a distinct set of factors that are shaping their financial picture now and in the future.

1. Job Changes. Millennials are two times more likely to leave their current jobs after two years compared to Generation X. Over 40% of them say they’re likely to leave.(The reasons vary, including career advancement, but the change does affect wealth-building initially. Many companies reward their employees who stay longer. Moving from job to job often doesn’t give you the opportunity to take advantage of those bonuses, profit-sharing pools, and pay raises that come with a job well-done over the long haul.

2.Debt. In a survey commissioned by Ramsey Solutions, millennials reported an average of $30,580 in debt, even though their average household income is $55,200. They’re starting out in the red and many of them don’t think they’ll ever be able to become millionaires. They also admit that their debt keeps them from being able to buy the things they want or need.(3)

3. FOMO and YOLO. That’s “fear of missing out” and “you only live once.” These attitudes pervading U.S. culture put pressure on millennials (and other age groups) to forego planning for the future in favor of living for the moment. Just watch a few commercials and you’ll see what I mean.I get it. Nobody wants to miss out on life’s adventures. We all dream of a trip to New Zealand or an adventure in Costa Rica. But those things come with time. The problem is that many people—from all age ranges—take those trips when they can’t afford them and put their financial security at risk in the process.

4. Lifestyle expectations. Listen up, people. When you graduate from college, you’re not supposed to be driving a fancy car or living in a condo overlooking the city. You’re not supposed to take excursion vacations or own an expensive wardrobe. The retail industry has baited our culture with lies about status and possessions, and we’ve swallowed them—hook, line and sinker.Some people compare their lifestyles to their parents’, but that’s not a fair comparison. Those parents worked a long time to reach that financial status. As a person’s career grows, so will their income, and they’ll be able to enjoy some of the perks that come with diligence and hard work.

In the early years, a person is supposed to have less money—they’re just starting out!Some people compare their own lifestyles to others’ their age, and that’s not a good barometer of financial success either. A good portion of them are up to their eyeballs in debt. The stress and anxiety they feel every month hides behind closed doors—where they worry whether they’ll be able to make ends meet!

5. Digital spending. It’s no secret that the younger you are, the more likely you are to take advantage of technology, even when it comes to spending and saving. In the U.S., people now prefer using a debit card for everyday spending, like groceries or clothes.(4) Sixty-seven percent of millennials prefer to shop online rather than in the store, and that number declines with age.(5) Add in the rising usage of smartphones for mobile payments and you’ve got the ingredients for a big problem.

Why? Because when you and I don’t fork over the cash, we’re likely to spend more. Here’s a simple example: When you only have a $10 bill in your wallet, forking over $5 for a high-priced coffee causes hesitation because you actually feel the emotion of loss when that money leaves your hand. Your body doesn’t register the same feeling when you use a debit or credit card.

6. Convenience lifestyle. A newlywed colleague mentioned in passing that her new husband wanted to learn how to cook. He had never spent time in the kitchen because it was easier to grab something from a restaurant. He is in his early 30s. Can you imagine how much money he’s forked over for a plastic fork and paper bag?

The good news: With more resources available to this generation than any other, these factors don’t have to determine the financial future of millennials. They can choose to live differently and reap the rewards of swimming upstream against the current of debt and commercialism.

What Millennials Are Doing Right About Retirement

While millennials face a number of challenges in our culture, a good number of them are thinking about the future. The Ramsey Solutions survey showed that 58% of millennials are already saving for retirement. And of those savers, about 70% of them wish they were saving more and 80% of them plan on saving more later. This tells me that millennials are planning for their futures, although most are still feeling the crunch of debt payments combined with the cost of living. Many younger millennials are now starting to pay for things they’ve never faced before—like housing, utilities, insurance, and even food. The credit spending I’m seeing in millennials underscores the importance of teaching kids about money long before they leave the nest. A better foundation leads to better outcomes.

One Powerful Factor That Could Change Millennials’ Future

Millennials have one advantage over every other generation, and that one factor gives millennials the greatest opportunity to build wealth. It’s not a stock tip or a technological advantage or even more education. It’s time.

Building wealth takes time, and millennials have more of it to work with between now and the time they retire. They’ve saved about as much as baby boomers (less than $10,000), but unlike boomers, millennials have the luxury of time to allow that money to grow.

For example, Mark begins putting away 15% of his $40,000 salary, or $500 a month. The chart below shows how much he’ll make by age 65 based on when he starts investing:

Began Investing                          Account at Age 65

Age 25                                                 $2.9 million

Age 35                                                 $1 million

Age 45                                                 $378,000

Age 55                                                 $105,000

Let’s look at this a different way:

Age Mark Began                             Amount Invested              Amount at Age 55

25                                                                    $500                                        $1 million

35                                                                    $1,400                                     $1 million

45                                                                    $5,000                                     $1 million

Do you see the importance of investing early? If you invest earlier, you can hit that million-dollar mark sooner. If you wait to invest, you will need to invest more each month or invest for a longer period of time. I don’t know about you, but I’d much rather start investing earlier and say goodbye to the daily grind as soon as possible. That means you need to talk with a financial advisor now, not sometime way out there in the future.

What Every Generation Has in Common

Now, listen up: It doesn’t matter if you’re a millennial, a baby boomer, or land somewhere in between. All generations share something in common when it comes to money—every person controls where their money goes. Whatever your current financial situation, you’re the only one who can make it better. You’re the one who decides where your money goes.

So right now, before today ends, set goals for where you want your finances to be in a year, five years, and even 20 years in the future. And then make concrete plans that will help you reach those goals. Step by step, work your plan and you’ll see progress. Slow and steady wins the race. Every time. Every. Time.


  • 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.