6 financial problems plaguing millennials through no fault of their own

Millennials are said to lack financial stability, but are they to blame? Matthew Sperzel/Getty Images

Millennials often get a lot of blame for lacking financial stability – and when looking at it from the outside, it’s easy to see why.

A recent INSIDER and Morning Consult survey, which polled 4,400 Americans – 1,207 of whom identified as millennials, defined in the survey as those aged 22 to 37 – yielded several results that don’t paint a pretty picture of millennials and their finances.

A decent portion of millennials are delaying homeownership, many aren’t saving enough, and nearly half are suffering so much from paying off student loans that they don’t think the financial repercussions are worth it, according to the survey.

But when taking a closer look, millennials often aren’t the cause of these financial problems – they’re mostly just dealing with the cards they have been dealt. The financial crisis, student loan debt, and a higher cost of living have ultimately impacted their ability to save and achieve traditional milestones.

Here, six key findings from the survey that show just how financially burdened millennials feel, through circumstances they didn’t create.

Nearly one-third of millennials are worse off than they thought they’d be 10 years ago.


Of those who answered the question, more than half who think they’re worse off financially consider themselves poor, while 34% of respondents consider themselves working class.

This can largely be attributed to the financial crisis, which led to a tough job market and wage stagnation for the oldest millennials, causing them to delay traditional adulthood milestones as the economy made it more difficult to save,Jason Dorsey, a consultant, researcher of millennials, and president of the Center for Generational Kinetics, previously told Business Insider.

More than half of millennials don’t have a retirement account.


Millennials often weren’t able to accumulate the amount of wealth they hoped or expected to, especially when it comes to retirement, Dorsey said. One-quarter of millennials who expect to retire between ages 66 and 75 have no retirement savings account, according to the survey. Almost 20% of millennials don’t know when they will retire, and 9% don’t expect to retire at all.

“Older millennials are often realising they’re going to have to play catch-up with their finances if they want to ever be able to retire, but some of them have already decided that they likely will not ever be able to afford to retire,” Dorsey told Business Insider.

This is particularly true for millennials born in the 1980s, who are at the greatest risk of becoming a “lost generation” for wealth accumulation, according to a 2018 report by the Federal Reserve Bank of St. Louis.

More than half of millennials have less than $US5,000 saved.


It’s also been harder for millennials to tuck money away into a savings account. While 70% of millennial survey respondents have a savings account, 58% have a balance under $US5,000.

According to Business Insider’s Tanza Loudenback, a heavy debt load has helped slim these savings. While many don’t carry credit-card debt or owe less than $US5,000, nearly 45% of millennials have student-loan debt.

When asked what they would do with an extra $US1,000 cash, millennials were more likely to prioritise paying off debt over saving (a difference of five percentage points), the survey found.

Nearly half of indebted millennials say college wasn’t worth the student loan debt.


The weight of student loan debt and its effects on savings is palpable. When asked whether their student loans were worth attending college based on their financial situation, about 21% of respondents said “definitely no” and about 23% said “probably no.” Nearly 27% said “definitely yes,” while 26% said “probably yes.”

Based on the results, those who are paying off their debt seem to feel worse about their decision to go to college, while those who have already paid off their debt feel better about having gone to college.

The rising cost of college may help explain its arguably weakening value – one of the reasons driving the price hike is the demand to go to college, Richard Vedder, an author and distinguished professor emeritus of economics at Ohio University,previously told Business Insider: “The rewards for college have expanded and grown from 1985 to a little after 2000 and sort of leveled off in the past decade.”

The “advantage of a degree today is less than it was 10 years ago, because of the rising cost,” Vedder said. “The return on investment has fallen.”

More than one-third of millennials earning at least $US100,000 a year consider themselves middle class.


Millennials also have a higher cost of living to contend with when trying to save – while they have benefited from a 67% rise in wages since 1970, according to research by Student Loan Hero, this increase hasn’t kept up with inflating living costs: Rent and home prices have increased faster than incomes in the US.

In the current economy, a six-figure salary may no longer be what it once was. Less than half of millennial respondents who earn $US100,000 or more consider themselves rich – about 23% of them think they’re upper middle class, and nearly 6% think they’re affluent, according to the survey. About a quarter of those earning $US100,000 a year or more consider themselves below middle class – nearly 7% think they’re poor, and almost 20% think they’re working class.

This is also evident of how the middle class is disappearing around the world and “squeezing” millennials out, reported Richard Partington for The Guardian, citing the Organisation for Economic Co-operation and Development (OECD). This means millennials may not have the same opportunities as their parents, he said.

About 31% of millennials expect to own a home, but aren’t currently saving for one.


While 40% of surveyed millennials who expect to own a home in the future are saving for one, about 31% of millennials said they expect to own but aren’t currently saving at all.

While many economic factors have made it difficult for millennials to save, it doesn’t help that homes are 39% more expensive than they were nearly 40 years ago, according to Student Loan Hero.

It would take the median earner in the 25 largest US cities between four and 10 years to save enough cash for a 20% down payment on a median-priced home (assuming they’re saving 20% of their annual income for the down payment, but most probably aren’t), according to a recent SmartAsset study.

Millennial homebuyers are increasingly relying on larger mortgages to buy homes, Loudenback reported. Realtor.com found millennials’ down payments are at an average of an 8.8% on a mortgaged home, less than the standard 20% down payment.