7 ways life is more expensive today for American millennials than previous generations

Mikhail Goldenkov/Strelka Institute/FlickrWhile millennials have benefitted from higher incomes, the increase hasn’t kept up with the inflated cost of living.
  • Millennials shoulder a different and bigger financial burden than Gen Xers and baby boomers.
  • While incomes have increased for millennials, many significant economic expenses, such as the cost of buying a home and college tuition, have increased at a faster rate.
  • The financial struggle millennials face may be making them more financially savvy.

It can be easy to gripe about millennials, but the truth is that, in some ways, millennials face a harder life than their parents did – largely because they’re confronted with different financial struggles and increasing expenses.

While millennials have benefited from a 67% rise in wages since 1970, this increase hasn’t kept up with inflating living costs. Rent, home prices, and college tuition have all increased faster than incomes in the US, according to research conducted by Student Loan Hero.

However, not all costs have soared.

While the cost of some consumer goods has risen, many have remained stable, and some – such as computers, televisions, and other electronics – have plummeted.

Gas is also cheaper. One gallon of regular unleaded gas was $US0.60 in 1976, but adjusted for inflation, it was $US2.65 a gallon, Student Loan Hero found. In 2016, a gallon was $US1.96.

And fun fact: A pint of beer in 1976 was $US1.12, or $US4.94 in today’s dollars. Now it’s only $US3.99.

While it’s nice to save on these everyday purchases, The Atlantic points out that it’s the most important parts of the economy that are getting more expensive, creating an even bigger financial burden for millennials to shoulder.

But it may be making millennials more financially savvy.

“Facing a stark set of financial circumstances, millennials started adulthood with less room for financial mistakes than previous generations,” Shannon Insler wrote in an article for Student Loan Hero. “In response, they are managing their money differently. More millennials are refinancing student loans,delaying a home purchase, and looking for creative ways to earn more money through side hustles.”

Here are the most significant ways life is more expensive for millennials.


Millennials are saving more money for a longer time to become homeowners.

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Millennials are waiting longer to buy homes than previous generations, but that’s because they have to spend more time saving money.

Millennials buying their first home today will pay 39% more than baby boomers who bought their first home in the 1980s, according to Student Loan Hero.

The value of homes has increased by 73% since the 1960s, when adjusted for inflation. The median price of a home then was $US11,900, which is equivalent to $US98,681 in today’s dollars. In 2000, the median price of a home rose to $US119,600, more than $US170,000 in today’s dollars.

And those numbers only continue to climb. As of April, the median US home value was $US210,200, CNBC reported, citing the real-estate company Zillow.


Millennials face soaring rents.

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But saving up for a home can be hard to do when millennials are shelling out money for climbing rents in the meantime.

Rents increased by 46% from the 1960s to 2000 when adjusted for inflation. In 1960, the median gross rent was $US71, or $US588 in today’s dollars. In 2000, that number rose to $US602, or $US866 in today’s dollars.

The current median US rent, according to Zillow, is $US1,600.


Millennials have to pay more for a four-year college degree — and are left with higher student-loan debt.

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Millennials have to pay to get paid down the road. And college tuition was more affordable for older generations, according to Student Loan Hero.

From the late 1980s to the 2017-18 school year, the cost of an undergraduate degree rose by 213% at public schools, adjusting for inflation.

Back then, average annual tuition for public college was just $US1,490, or $US3,190 in today’s dollars, compared with today’s price tag of $US9,970.

Private college tuitions fared a little better, with a cost increase in the period of 129% when adjusted for inflation. In the late 1980s, it cost $US7,050, or $US15,160 in today’s dollars, for a private undergraduate degree. Today, the average cost is $US34,740.


Millennials spend more money on entertainment.

David Banks/Getty Images

If millennials want to experience some of America’s favourite pastimes, it comes at a cost.

In 1976, it cost just $US5.50 for a top box seat to watch the New York Yankees play – $US24.27 in today’s dollars. The same seat at a Yankees game in 2016 set fans back $US245.

In 1970, the average price of a ticket to the Super Bowl was $US91.52, adjusted for inflation. As of 2014, it was $US1,250.

Concert tickets are also becoming a luxury form of entertainment. In 1969, a ticket to a Rolling Stones concert cost about $US8. It was as much as $US350 in 2003, and 10 years later, the average price was $US624.

However, not all is lost on the entertainment front. In 1976, the price of a movie ticket was $US2.13, or $US9.40 in today’s dollars. As of 2016, the average price was just $US8.65.


Millennial parents pay more for childcare than their parents did.

Monkey Business Images/Shutterstock.com

Kids have always been expensive, but it costs more than ever to raise a child in the US.

Adjusting for inflation, the average weekly childcare costs increased to $US143 in 2011 from $US84 in 1985, according to the US Census Bureau.

The cost of childcare and nursery school increased by an average of 2.9% annually from the end of the recession in 2008 to 2016, surpassing inflation of 1.6% during that seven-year period, The Wall Street Journal reported.

On top of that, childcare and pre-college education make up 18% of the total cost of raising a kid, compared with 2% in 1960,The Washington Post’s Jonnelle Marte reported, citing a Young Invincibles report.


Millennials have to shell out more money for a set of wheels.

Volodymyr Nik/Shutterstock

While some cars have remained in the same price range as 30 years ago, many have not.

A Porsche 911 in 1965 was $US6,370, or $US46,795, adjusted for inflation. In 2012, it cost $US82,100.

Even some mass-market cars have gone up in price. In 1950, a Volkswagen Beetle was $US1,280, or $US12,290 adjusted for inflation. As of 2012, the price was $US19,795.

From November 2006 to November 2016, prices for new cars increased by 5%, according to the Bureau of Labour Statistics.

The upside is that these higher prices often come with higher quality and more extras than cars in the past.

The downside is that they also come with higher associated expenses. Costs for motor vehicle insurance have increased by 50%, and those for maintenance and repair have increased by 27% in the same decade.


Millennials are looking at pricier health insurance premiums.

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Millennials are lucky they can stay on their parents’ insurance until they’re 26. But when they hit that age, they’re faced with higher health insurance costs than their parents were at the same age – even if their employer is footing the bill.

According to Bloomberg, the average worker shells out $US5,714 for a family health insurance plan, or 30% of the total $US18,764 cost – but five years ago, they were paying $US4,316 of the total $US15,745 cost, or 27%.

To put that into even more perspective, the average annual health insurance cost per person in 1960 was $US146, CNBC reports. In 2016, it hit $US10,345, nine times as high when adjusted for inflation. Costs are expected to increase to $US14,944 in 2023.

And because of uncertainty surrounding the future of the Affordable Care Act, some healthcare premiums were set to increase by as much as 50% for 2018.

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