Posted June 9, 2020 by Mark Perna
Why is money so hard? Mark’s article, “Millennials And Money: What They Regret Most,” published at Forbes.com on June 9, 2020.
Millennials are more stressed about their debt burden than any other generation today—and a new study sheds some light on what they consider to be their biggest money mistakes. Education, early career and living choices all have their own financial pitfalls, as this generation has discovered.
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Underscoring the inadequacy of financial counseling and education programs in the U.S., 90% of respondents reported that they did not fully understand the terms of their student loans when they signed on the dotted line. Eighty-four percent borrowed more than they needed and accrued credit card debt while working toward their degree. Other mistakes include harming their credit score (81%), opening multiple credit cards (70%) and misusing student loan funds (73%).
A full 83% say it was a mistake to attend an expensive college, and 75% say they overpaid for their dorm. Missing out on some financial aid (79%) and scholarships (71%) were also easy errors to commit.
In general, it seems Millennials don’t regret getting a college education; they just wish they made smarter choices about where and how. The study found that respondents who made a high number of financial blunders in college were more likely to worry about paying their monthly bills today.
Beyond college, Millennials also wrestled with managing their income wisely during their early career years. Again, credit card debt figures largely in their category of mistakes, with 86% admitting they accumulated card debt, 84% harming their credit score and 74% overspending on big-ticket items.
Planning for a healthy financial future was tough for many Millennials. Eighty-one percent admitted they did not have a financial plan, 88% said they did not save enough and 77% failed to contribute to their retirement fund. Additionally, overspending tripped up 81% of respondents, who said they would spend their paycheck before the next payday rolled around. Eighty-six percent overestimated their expendable income and 80% spent more than they realized.
Across the board, a significant majority of Millennials reported making multiple money mistakes along their journey, leading us to ask: why is money so hard?
Part of the answer may lie with the Baby Boomer generation, who—according to a T. Rowe Price study—are failing at money management even more than their Millennial children. Recently, Experian found that Boomers carried the highest personal loan debt, fully 18% higher than the national average. Another study reports that number of older Americans filing for bankruptcy has increased by up to 300% in recent years.
But for Millennials, there’s a bright side. Business Insider reports that despite a low net worth of $8,000, the average Millennial today is fairly savvy and practical when it comes to money. They should be—many have learned these lessons for themselves, the hard way.
Between student loan debt, challenging economic conditions, inflation and the ever-rising cost of living, Millennials know they’re up against it. Instead of asking why money is so hard for this generation, maybe a better question is this: How have they managed to do as well as they’re doing?