U.S. Millennials are falling behind when it comes their net worth. Burdened by student debt and rising healthcare and living costs, while facing stagnant wages, many are finding it hard to get by, let alone save for a rainy day.
A recent report by Deloitte finds U.S. millennials, defined as people between the ages of 18 and 35, are falling behind previous generations when it comes to their net worth.
CGTN’s Karina Huber reports.
30-year old Molly Seeley is a software developer living in New York. She makes good money but her financial situation isn’t good.
Seeley says she “Definitely probably will be in debt for the next decade or so and that definitely changes how I make decisions in life.”
Seeley pays $1,700 a month in student debt that currently tops $120,000. She also faces high living costs, making it very hard to save. She’s not alone.
According to the global financial firm Deloitte, Americans between the ages of 18 and 35 have an average net worth that is below $8,000. That is a lot less than what previous generations had at that same age.
Researchers at Deloitte say it’s an almost 35% drop since 1996.
“Income has been slowing and pretty stagnant for those in the middle and low income, which millennials tend to fall into. On the other side of the coin, non-discretionary costs have changed dramatically. So, things like healthcare, which has increased by around 20% and education which has increased by over 60% are a real strain for young American consumers.” Says Bobby Stephens, the Principal at Deloitte.
That strain is causing many young people to delay reaching milestones like buying a home, getting married and having children.
“Sometimes they do say that they are delaying having children, or they’ve decided to not have children at all, because of the student loan debt problem.” Says Laura Donovan, the founder of Sonder Financial.
Stephens says this has a big impact on the U.S. economy, which is dominated by consumer spending.
“You have a lot of retailers and consumer product companies who rely on those large events and that predictable spend that comes with such an important life event.”
Laura Donovan, a financial advisor who works predominantly with millennials, says many of her clients lie awake at night stressing about their financial situation.
“My heart breaks for those individuals because they are hard workers, they’re doing a lot of the right things. Their priorities are aligned in a way a lot of other American’s priorities are and they are just consumed by the burden of student loans.”
For Seeley, the biggest worry is figuring out how she’s going to take care of her aging mother.
“If she needs an in-home healthcare aid, she can’t afford that, and I can’t afford that right now. So, that’s probably the thing that is barreling us down the most, in terms of the financial situation, is being able to provide for her.”