Devin Morrissey talks the unique state of Millennial finances.
Millennials, people born in the 80s and 90s, all have one statistic in common: they’re more likely to be in a lot of debt than other generations. That’s the cold, hard truth about the state of Millennial finances.
Millennial finances are in a state of emergency, or at least they’re headed that way. Let’s look at why this is, where it came from, and where we might be able to go as members of Generation Y trying to stay ahead of the mess.
University of Debt and Shattered Expectations
I have no intention of pointing a finger at the previous generation for putting us in debt. But it is valuable to realize that those before us directed us to college as a means to financial stability. This wasn’t unfounded, nor was it completely wrong.
What we’ve found though is that many college fields are unprofitable, even the most important ones. Some of these are extremely complex and necessary fields as well — psychology for instance. But getting jobs in these fields is extremely hard. The market is scarce, even though the jobs are necessary. And a lot of time, the best way to get a job in those fields is to do more school, which puts you in even more debt.
Where Independence and Expectations Meet
Independence is important in this world, without a doubt. But while we want to be completely independent, sometimes the expectations of success are too high to do on our own.
With our parents often digging their ways out of debt as well, the process of borrowing money becomes the means to meeting our expectations: to go to college, find a career, buy a home, and start a family. Even if we choose to forgo college, we still are faced with the ideal result of eventually moving out of our parents’ houses, and many of us accumulate debt from buying a car or similar expense anyway.
Many of us, even after college, are not making enough to get ourselves out of debt in any foreseeable future. So where does this leave us?
Not All Hope Is Lost For The Old Spirited
There is the life expected of us — get married, pop out some kids, own a house, and all of this requires money. Some of us don’t want that, and others do. If you’re someone who finds that intriguing but are worried about the amount of debt you have accrued, make yourself aware of some of the recommended finance hacks for things you desire! There may be a better chance to sift past the death grip of debt!
Right now, it’s recommended to millennials looking for houses to consider fixer-uppers. The reason behind this is that while homebuyers generally fear the price of a fixer-upper’s repairs, the housing industry often hides what we call renovation mortgages. This is a mortgage which combines the price of a house with the cost of renovations. This is a way to renovate a fixer-upper to become a higher quality house, that would have been out of your price range before. It’s worth noting that if you ever plan on selling your house, you can sell it for more than you bought it for in the case of a fixer upper, and hopefully more than you’ve put into it!
We Are The Dreamers and We Make Our Own Futures
Ultimately, whether or not you want the traditional plan above or not for your life, you can make your future whatever you want it to be. A big part of this is going to be overcoming your debt though, and tackling your credit head on so you don’t get dealt a bad hand later in life because of it. See, if you ever need a loan for an emergency, poor credit can get in the way of that.
Now, there are ways out. You can save as much as you possibly can and do nothing fun for a while as means to pay off your debt — and even then this is only feasible for some of us. You can also try using a student loan repayment program. But again, be careful, because this could put you in a worse spot.
Eventually you will have to pay off your debt, however. You will absolutely need to find ways to do this, and a lot of it will come down to discipline. Just remember that starting now can open up a world of possibilities. Your future can be what you make it as soon as you break those shackles of debt off yourself.
How did you pay off your student loans, or your other debts, and get to a place of financial peace? How are you currently doing this? What do you think about the state of Millennial finances? What did I miss? Please let me know in the comments!