There is no doubt about it, Millennials are a hot topic. It seems like you can’t have a conversation these days without the M-word propping up somewhere. On good days they are the butt of an avocado joke or internet meme, and on others, they are accused of killing the economy. It’s hard to keep up.
Every generation engages in petty gossip and critique of other generations at some point or another, so is this just the continuation of a vicious circle or is there some truth to the stereotypes? Do these judgements simply function as good headlines or do they actually hold some weight?
I’ve been running a campaign for the past couple of weeks to reach a general consensus on the topic and to find out what people have to say, and it has been thought-provoking, to say the least. So, without further ado, let’s take a look at some of the millennial money myths, and get stuck in already! Should you believe the hype or are the labels all very misguided? We’re about to find out on part one of exposing millennial money myths!
Ok, so let’s just quickly summarise- how does this whole generation thing work, and what sort of factors are considered when deciding what individuals belong to which one?
A generation refers to a category of individuals who are born and live around the same time. Those who exist in the same birth cohort (generation) tend to present similar characteristics, inclinations, and principles. So, which one do you fall into and do you think you fit your mould?
There are currently 5 generations that constitute our society:
• Gen Z
Gen Z are also known as iGen, or the Centennials. Most people perceive this generation as being born from around 1996 to the mid 2000’s. However, because there is no certified agreement on when a generations year ends, there is a slight overlap between generations, and the same goes for Gen Z and the Millennials. This particular cohort, however, is characterised by its extensive understanding of technology and social media.
The term ‘Millennials’ was dubbed by Neil Howe and William Strauss in their book ‘Generations: The History of America’s Future’. They are otherwise known as Gen Y, or the Net Generation, and are said to be born from 1981 – 1995. Millennials and Gen Z are similar in the sense that they are marked by their increased practise and knowledge of digital media and technology, but they differ in their core values and attitudes. Millennials are largely described as perfectionistic whilst Gen Z’ers are generally labelled as realistic.
• Generation X
Generation X are said to be born roughly between 1965-1976, and are often referred to as the ”middle child” of generations. They grew up during a period characterised by a shift of societal values, with the increase of divorce rates and less adult supervision. They have also been labelled as the ‘MTV generation’ with the introduction of MTV to their television sets, and the establishment of music genres such as grunge and hip hop.
• Baby Boomers
The Baby Boomers generation, born between 1946-1964, are predominantly linked with the denunciation of traditional beliefs and principles. It was also a time which the government provided contributions and subsidisation for post-war housing and schooling. This meant that the Baby boomers are also associated with mounting wealth and prosperity. The term Baby Boomers refers to the increase of birth rates during that time.
The Traditionalists, or the ‘Silent generation’, were born 1945 and before. They were dubbed the ‘Silent generation’ because children during this time were expected to work very hard but keep very quiet. Since they grew up during the Great Depression and World War II, they are mostly known to be extremely resourceful and disciplined. Ultimately, the traditionalists preserved the respectable work ethic of their mothers and fathers in an industrialised, commercial world.
Myth 1. Millennials aren’t buying homes because they want to scrimp off their parents.
Millennials, dubbed also as the ‘live-at-home’ generation, are criticised for living at home in an attempt to take advantage of their parents’ generosity. But is there actually any truth to this? Are they choosing to live at home out of luxury or necessity?
“The majority of millennials living at home don’t pay their parents any rent.”
Blinds Hut carried out a study on 600 18-34 year olds and found that 1⁄4 of them are still living at home. What’s more, 2/3rds of the same cohort had their parents washing their clothes, and 1/3rd of them spend less than an hour per week on household chores! In references to these findings, they alluded to the possibility that Millennials are still living at home because they have not acquired valuable life skills and not because they felt that they couldn’t afford their own housing. More significantly, they found that over half of the millennials studied don’t pay their parents any rent whatsoever. This particular piece of research supports the stereotype that Millennials want to scrimp off their parents and are not self-dependent. But what do millennials think? Can findings such as this inspire overviews of a whole generation?
“Millennials aren’t buying homes because they are expensive.”
Recent statistics reveal that 1.23 million millennials still live at home and that there has been a 37% increase from 2007 to 2017. Data from the Office for National Statistics, however, specify a correlation between this escalation and the price surge of property in the UK during the same period.
Because of this, a lot of Millennials also feel that their only option is to rent. Many express that if they can’t afford to buy, then this is perhaps the only way that they can assert their financial independence. Gabbie, a millennial blogger, also known as The Opinionated One, discusses this with reference to her own personal experience:
“I am married, and I am currently renting a home for about $650 a month. Because of debt and the price of homes in my area, we haven't yet purchased a home of our own. I would say that most millennials aren't buying homes because they are expensive and, whenever they rent, a landlord is responsible for fixing issues in their home or apartment. Those who still have to live at home with their parents are likely suffering from debt they acquired in college or they do not have the needed experience to get a job that pays them well enough to afford things on their own.”
“I think many millennials are starting to realize that the house you live in isn't necessarily an investment.”
Millennials attitudes towards home-ownership is changing. New research revealed that home-ownership is only 5th on the list of financial priorities for millennials and that 1/3 of the Millennial generation could potentially live in rented accommodation their whole lives. Other research from PwC also predicts that private rented households will rise from 5 million to 7.2 million by 2025. These findings indicate that home- ownership may not be a priority to Millennials and could hint to the fact that they no longer value it as a good investment opportunity.
A study by Contiki also found that Millennials are more likely to spend money on activities over physical purchases, with 71% of Millennials noting that experiences are the main priority in their lives. Are Millennials moving away from materialism and traditional measures of success such as owning a home and choosing instead to value experiences? Kevin, the Financial Panther contributes the following:
“I think there are a lot of factors for why millennials aren't buying homes, but I don't think it has to do with millennials wanting to mooch off their parents... I think one of the big reasons is that a lot of millennials are starting to realize the real cost that comes with owning a home. We millennials have so much more information at our fingertips compared to what previous generations had. Things that just sounded right a generation ago are really getting closer scrutiny because of this. A home can be a good purchase, but I think many millennials are starting to realize that the house you live in isn't necessarily an investment (or a good investment) when you consider all of the costs that come with home ownership. It costs money to own things, and a lot of millennials are starting to realize it might not be worth it.”
“When I talk to my parents, they agree that it was easier for them to buy a house.”
Millennial money behaviour is embodied by two primary events: The Great Recession, and the substantial increase in student debt - both of which the Boomers and Generation X didn’t have to endure. Jessica, at The Weekend Tourist highlights the difference between the millennial and boomer experience, by discussing the topic of affordability of housing between her generation (millennials) and her parents (boomers):
“I think that this is doing a misjustice to millennials. It’s actually a really good idea to stay at home as long as possible, especially if this allows you to save money to get on the housing ladder. When I talk to my parents, they agree that it was easier for them to buy a house – mortgage lenders were less scrupulous, houses were cheaper, cost of living lower. I lived at home until I was 25 and could afford to buy my own place. But I think if I’d been frittering away all my income, they might have taken a different view!”
“Young people stay at home because they want to. And why not?”
Millennials are setting new standards. Statistics published by the ONS reports that there has been a rise from 2.7 million young adults to 3.4 million living with their parents in the past two decades. A study of live-at-home 18-24 year olds also revealed that 4/5 of the cohort said that they stayed at home because they genuinely just enjoy living with their parents. So, have we been looking at things wrong the whole time? Could it just be that Millennials have better relationships with their parents than previous generations?
Author, and award-winning speaker Henry Rose, shines some light on this:
“Millennials are buying homes in fewer numbers – that is true. But it’s not because they want to scrimp off their parents. As with most social and economic situations, it’s too simplistic to assume there is one single, negative driver. Millennials – especially the youngest ones, (and their even younger, Gen Z siblings), are staying at home for longer. Children (if we can call them that), aged between 18 and 28, have spent much more time with their parents than any previous generation. For some, this has resulted in a much closer family connection and a more cohesive unit. Young people stay at home because they want to. And why not? Why did people buy houses in their 20’s 15 or 20 years ago, or before that? Because they could. Because that’s what society told them to do. Ownership was king.”
Myth 2. Millennials are lazy, entitled, and unambitious.
Often referred to as the ’trophy generation’, Millennials are under constant scrutiny for being lazy, entitled, and unambitious. But are these degrading comments about millennials justified or are people just failing to see the bigger picture?
It is no secret that hard work meant something different one hundred years ago to what it does today. Whilst the Traditionalists would associate hard work with physical labour and working 14 hour shifts in mass manufacturing, Millennials grew up in a digital revolution, and so have a completely different definition of hard work and productivity.
Is this, therefore, just a matter of a changing world, or is there actual issues in the Millennials’ work ethic that needs to be addressed? Or have the Millennials' digital upbringing made it problematic for previous generations to see things from their perspective?
Let’s take a look at things from a Millennials perspective:
“I think the word “millennial” has a branding problem.”
Besma, a London-based lifestyle blogger, expresses her concern for the way that Millennials have been attributed negative labels, and for the way that these stereotypes have been generalised to a whole cohort:
“I think the word “millennial” has a branding problem - many people attribute it to large Instagram influencers such as Kylie Jenner or boil it down to a trend such as avocados on toast. The phrase “millennials" doesn’t even have a clear age bracket, and that vagueness gives way to stereotypes being drawn. I want to highlight that there are many hardworking, entrepreneurial members of society within Generations Y and Z. We have reinvented how to work - with many of us working as freelancers, business owners, or in multiple jobs. Going one step further, there are plenty of us who not only care about our careers, finances, and work ethic, but we also care for the environment and our impact too.”
“The way we go about daily tasks has completely changed.”
Student Skint’s Katie comments on how technology has impacted Millennial behaviour, and how it has caused them to adopt a brand new work ethic in the workplace:
“Personally, yes, I think it’s down to technology. Millennials will often find methods to get things done online much more quickly such as being able to apply to 10 jobs with the click of 1 button as your CV and details are saved. Older generations may deem this as ‘lazy’ or say ‘you haven’t tried hard enough’ because they would have had to wake up early and visit the job centre. We’re in different times now and the way we go about daily tasks has completely changed. That’s not millennials’ fault and we shouldn’t be blamed for the way of the World. We are just making use of the resources available to us. The phrase “work harder not smarter” springs to mind here. We aren’t necessarily being less productive, the ways to be productive have adapted over time.”
“Technology is redefining productivity and working environments – not Millennials.”
Henry, from Inter Generational Expert takes a similar perspective, and correlates the amount of time Millennials spend on social media to their consequent redefinition of 'productivity':
“They just happen to be the most visible generation at present, who are using tech in their workplaces. But all of us have increased our ability to work remotely, anytime, anyplace, and with anyone. All of us, but especially Millennials (and Gen Z) are spending huge amounts of time on social media, and that has redefined everything. What is different, is that Millennials are the first generation to share with others what they earn (unthinkable for older workers). They are also the first generation to encourage their friends to join a company that they work in and enjoy or leave a company they dislike or disapprove of."
Myth 3. Millennials are killing the economy.
It only takes one quick google search of “Millennials are killing” to conclude that they don’t have the best reputation. From “napkins” to “mayonnaise”, Millennials are accused of killing a growing number of different industries. But some people believe that we are looking at things the complete wrong way - that it is not the Millennials that are killing the economy, but the economy that is killing Millennials.
It is important to note that Millennials reached adulthood during a period characterised by economic growth and were appalled to witness a declining, unreceptive job market upon graduation. As a result, many blame the system for the masses of student debt, stagnant wages, and the housing crisis, and conclude that it is no wonder Millennials aren’t spending.
“Student loan debt is killing millennials.”
With the average amount of debt rising to a massive £32,200 per UK graduate, and a total debt of $1.34 trillion accumulated in the US, i'm sure it is of no surprise that Millennials are seriously swamped with student debt. And Ja'Net Adams agrees. Ja'Net is an International speaker, author, and the CEO of EMACK Consulting. She believes that Millennials were hit hard by this particular financial crisis and that they have found themselves trailing behind previous generations as a result of it. What's more, they are unable to participate in the economy in the same way that their parents could:
“Student loan debt is killing millennials. They are not able to participate in life. Not investing, not buying homes, not working in their passion or starting their dream business. The economy is not killing them, because they are not even able to participate in it.”
She also relates this to her own personal experience and explains that if it were not for the burden of student debt Millennials may actually be able to take control of their lives and participate in the economy:
“I believe it has just made them more cautious/scared with their money and that is why most save in cash. Being a millennial and debt free now I don't feel that fear. I am able to participate in the economy because debt is not weighing me down anymore.”
“We create meal plans that show others how to shop for £20 a week.”
Lauren Caton is a UK Millennial lifestyle blogger. She comes from a perspective that Millennials are making the most of a bad situation. That although the economy is bad, they are taking necessary steps to becoming more financially savvy, smart, and innovative to adapt to these economic burdens:
“There's no denying the economy isn't great and I think millennials have done a great job at creating a savvy lifestyle, cutting back in areas that aren't as important to them in order to afford the things that are important to them. I think what we save for has changed a lot but that doesn't mean we aren't saving. I've said for a long time that basic financial advice should be taught in schools, but I think we're doing a pretty great job of figuring things out and sharing our tips with the world. We're the generation that talks about food shops and champions bargain supermarkets, we create meal plans that show others how to shop for £20 a week. We offer practical advice on how to cut back on spending that still allows us little indulgences. Whilst traditionally older generations would have been saving for a wedding and a home first and foremost, were saving for travelling and creating a life we're happy with. It may not look like that life our parents created and saved for, but it doesn't make it wrong!”
“Millennials may change the economy for all of us.”
Because Millennials are coming of age during a more uncompromising financial crisis than their parents, millennials can be seen as already establishing some new trends in the economy. Henry Rose offers a new positive perspective on the otherwise negative stereotype. She hints that this change in Millennial money behaviour may actually be a great thing as it has made Millennials more entrepreneurial:
“Millennials may change the economy for all of us. As social media and online platforms and apps have taken hold of our futures, Millennials are becoming increasingly entrepreneurial and ambitious. But that ambition is going online with online sites and businesses built and run exclusively on smartphones. Two of my nieces have set up online, mobile-enabled businesses (which they have each been running from their bedrooms since the age of 17), selling “vintage” clothes (from the 1980s and 1990s!). They earn hundreds of pounds more a month than any part-time job could give them, and they are still in full-time education. If online organisations are the future of business, our youngest workers are making that happen big time. And that’s got to be good for the economy.”
A penny for your thoughts
Ah Millennials. Just the mention of the term incites a bombardment of opinions and views, and I don’t think that’s going to stop any time soon. Regardless, it is important to acknowledge a few things before making assumptions. Each generation all have distinctive characteristics, values, and attitudes. But this doesn’t mean that every Millennial or Baby Boomer is the same as the other. Unfortunately, it can be typical of human nature to push individuals into a bracket and make deductions for a whole generation. So, whilst Millennials may face constant criticism and scrutiny, it is crucial to take everything with a pinch of salt.
And it doesn’t stop here. There are various other Millennial money myths and stereotypes that need close inspection. Find out on part two on Millennial money myths!