From housing to dining out to the midlife crisis, much has been made about how millennials have less money to spend compared to their baby boomer parents. But a new survey finds that views about inter-generational financial differences are more nuanced than headlines suggest.
The survey of 950 millennials from the CFP Board shows that millennials are basically split on how their finances compare to their parents’ at the same age: 41% say it has been easier for them to achieve financial milestones, while 40% say it has been more challenging. The remaining respondents say the difficulty is about the same.
Similarly, 43% say their financial situation is better than their parents’ was at the same age, while 32% say it is worse.
Kevin Keller, CFP Board CEO, says the findings reflect the fact that millennials are growing older and wiser. Plus, Americans often report feeling better about their own finances than the broader economy. We’re an optimistic bunch.
“As usually is the case when you make broad brush statements, you can get in trouble,” says Keller about the pervasive negativity surrounding millennial finances.
Depending how you squint, some economic data backs up this millennial perspective, although it is impossible to draw conclusions that apply to every member of the same generation. It is true that the wealthiest millennials are better off than the wealthiest baby boomers or Gen X were; meanwhile, those at the bottom of the economic spectrum are faring worse. Overall, the average millennial has 30% less wealth at age 35 than boomers at the same age, but the richest 10% of millennials have 20% more wealth than the richest boomers did, according to recent research published by the University of Chicago Press. That’s due to “high-status” jobs (like in the tech sector) that pay significantly more than jobs held by boomers or other elders.
At the same time, perception isn’t everything. Millennials on average also have more student loan and credit card debt than older generations, lower levels of home ownership, and lower marriage rates, all of which greatly affect long-term wealth accumulation.
Still, millennials, the oldest of whom are now in their early 40s, have increased their wealth significantly since the start of the pandemic. Recent reports from the Federal Reserve and the Center for American Progress find wealth is at all-time high for this generation, growing by an astounding 80% between Q1 2019 and Q3 2023. Again, though, that wealth is primarily tied to investments in stocks and so not equally distributed among the generation.
Millennials are optimistic about the future
Elsewhere in the CFP Board’s survey, millennials report feeling optimistic about achieving their financial goals and aspirations. A full 70% rate their optimism at a 4 or 5 on a 5-point scale, while just 10% rate their optimism at a 1 or 2 (meanwhile, the final 20% report neutral feelings on achieving their goals).
Keller points to the overall strength of the economy as a reason for millennial optimism. Now the largest group of workers in the workforce, they are benefitting from the low unemployment rate and salary growth of recent years.
“Yes there are challenges, but there are more jobs available now than at almost any time in the past 40 years, the career opportunities are there,” Keller says.
Their top goal: Financial independence and stability. This doesn’t necessarily mean saving millions and retiring by 45, but Keller says it does mean living comfortably on their own and feeling confident in where they stand financially. Other top goals include traveling, having a long, healthy retirement, and achieving career fulfillment.
“The eldest millennials entered the workforce during the 2008 financial crisis, which left lasting impressions,” says Keller. “It’s no wonder financial independence and stability are paramount.”
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