Making Ends Meet: America’s poorest generation
LOUISVILLE, Ky. (WAVE) - Most of us can remember the moment we were able to save enough for those important major adult milestones in our lives. From your first car, first home and even your first child.
Millennials are working hard to grab their piece of the American Dream, but education, housing and basic cost-of-living expenses have far outpaced wage gains during their lives.
Danetha Doe from with Clever, a real estate data company, shared with us the findings from a new report on millennial debt.
“A millennial is the generation that was born between 1981 and 1996,” Doe said.
Millennials are currently between 26 and 41-years-old.
“The data shows millennials are not at the same financial benchmarks that previous generations have been at,” Doe said.
According to a study by the Federal Reserve, millennials are America’s poorest generation.
“The millennials generation not only has the cost-of-living increase, they’ve also lived through the 2008 recession,” Doe said. “They’ve lived through the recession associated with the pandemic. Right now, they’re living through the highest inflationary period that we’ve seen since the 1970s. This generation has been dealt a really tough economic hand.”
Millennials are now in their prime, working years trying to build their savings, prepare for retirement, preparing to build a family and securing funds for any emergency.
“The average millennial spends 47% of their gross income on housing,” Doe said. “That’s 1.5 times greater than the recommended 30%.”
With home prices rising seven times faster than income and rent rising four times faster than income, millennials must spend significantly more of their earnings on housing than previous generations.
“That gap is huge, and it increased during the millennial generation,” Doe said.
Clever Real Estate’s survey of millennials also found student loans at the top of their concerns.
“It was not uncommon for them to express they have over six figures in student loan debt,” Doe said.
Debt that may see some relief from the Biden Administration.
The U.S. Department of Education will provide up to $20,000 in debt cancellation to Pell Grant recipients with loans held by the Department of Education and up to $10,000 in debt cancellation to non-Pell Grant recipients.
To be eligible, your annual income must be below $125,000 for individuals or $250,000 for married couples or heads of households and you must have filed your taxes. Doe stresses there are solutions.
“Get clear on where you’re at in terms of your income, your expenses and your debt,” Doe said. “Determine your financial goals according to your own definition of success. There are financial programs that are available if you realize that you need help.”
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