According to many studies, Millennials seem to have trouble creating or sticking with a budget. Unfortunately, this also means that other areas of their lives may be suffering as well. Millennials who don’t have a solid budget and financial foundation may not be saving for retirement as they ought to either.
But why do Millennials have trouble budgeting? Is it that they don’t know how? That they don’t care? Or some combination of both? Here are four reasons why Millennials may have trouble budgeting.
1. Millennials Are Underemployed
With the economy still not being back at its full strength after the recession, many Millennials are working jobs that do not pay what their degree is worth. Some Millennials are even underemployed, begin able to only find a few part-time jobs to string together to make ends meet.
They are taking these positions in order to have a job, but they aren’t earning high salaries. It’s harder to pay off debt and live on your own when one’s paycheck isn’t enough to meet expenses. So, many Millennials don’t even bother with a budget.
2. Many are Living at Home
There have been multiple articles and exposés on why this generation is living at home longer or returning to live at home after college. But no matter the reason, it’s happening.
One of the main points of budgeting is to make sure your bills are paid and you are letting your money work for you. But, some parents do not charge rent or other bills to their adult children. So, when you bring home a paycheck you don’t really need to divvy out and worry if there is enough, because your expenses are hardly any. Theoretically it should be easier to budget, but it can be difficult habit to adopt when you don’t have to worry about living expenses.
3. High Amounts of Student Debt
According to numerous sources, the average student loan debt for college graduates is around $35,000. Pair this with underemployment and budgeting is harder to do. Higher student debt is holding Millennials back from purchasing homes, automobiles and possibly even marriage and having children. You may begin feeling deprived if a large portion of your budget is being put toward student loans. Plus, it’s harder to stick with a budget when you don’t feel like you’re making a dent in your debt.
4. Other Economic Factors
The rising cost of the national debt is staggering. As the government’s debt increases, the option of using social security for retirement is dwindling. Combined with increasing costs of living, higher student debt, and a slowly recovering economy, budgeting gets harder for even the most financially savvy. Unfortunately, many Millennials are focused on the now to live and pay their bills, making the thought of saving for the future daunting at best.
Millennials aren’t the only ones facing tough economic times. But as more of them emerge into adulthood, it’s becoming clear that this generation is struggling financially. That’s not to say Millennials can’t or shouldn’t budget. However, it does make things difficult when the odds are stacked against you. It will simply take more of an effort to stick to your budget and get your personal finances in order.
Why do you think millennials have a hard time with budgeting? Do you struggle with budgeting?
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