It’s no secret that Johnny and I enjoy talking about our generation of millennials and all our “issues,” such as why our generation’s still mooching off our parents. We read another discussion-worthy article recently that we wanted to share.
The article poses the question Why aren’t millenials saving any money? The author shares a startling statistic — that adults younger than 35 have an average yearly savings rate of -2 percent. Ouchh. And that it didn’t used to be so bad. In 2009, that number was at 5.2 percent. So what happened? Why are we now saving negative amounts of money?
The author blames student debt, a skepticism of banks, and a lack of financial education. She also mentions that our generation tends to be fairly open about our financial standing since we’re all faring pretty poorly (literally) in that area of our lives.
I completely agree that our generation tends to be more open about our finances. But I don’t think it’s because we all know we’re collectively doing horribly financially. Rather, no matter whether we’re doing good or bad, we talk to each other about it because we know we’re all trying our best at something we have no clue about. Every couple Johnny and I know wants financial security and independence, but none of us were taught how to get there.
And I think that’s the big reason for our collective -2 percent savings rate, too. No one taught us how to manage money. If I asked ten random peers on the street whether they got a financial education growing up — either in school or home — I really think at least nine would say “no.” I’m not sure why we weren’t educated, but I’m pretty fed up with kids growing up without any financial know-how whatsoever. If Johnny’s ever a politician, my fun little wife side platform will be getting kids a financial education in our schools. But that’s a whole other topic for another day.
Johnny thinks it’s a bit more complex than financial ignorance. He blames it mostly on college tuition being at an all-time high, resulting in much of our generation drowning in student debt. He also attributes it partially to the horrible job market we were all met with when we graduated from college.
And it’s probably a combination of all those factors, or maybe there’s a completely different issue we haven’t thought of. We’re not sure. But we want to hear what you guys have to say since many of you are sure to have some great insight. So what do you think? Why on earth is our generation averaging a -2 percent savings rate each year? At what age do we snap out of this terrible statistic, and how do we help the next generation avoid our same mistakes?