5 Reasons Millennials Are Broke — and 8 Ways They Can Dig Themselves Out of It
Written by
Ashleigh Ray, AI Editor
Edited by
Ashleigh Ray
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If you’re a millennial, chances are you’ve had at least one (or a dozen) conversations about how tough it is to make ends meet. You’re not alone. Many in this generation are feeling the financial squeeze, thanks to a unique cocktail of economic and social challenges.
While it may seem like financial security is out of reach, there are ways to dig yourself out of this. Let’s dive into the reasons why millennials often find themselves strapped for cash and, more importantly, explore some strategies for turning things around.
Why Are Millennials Broke?
Student Loan Debt
This one’s a biggie. Many millennials are saddled with a hefty amount of student loan debt from pursuing higher education. It’s like a financial hangover that just won’t go away.
The Housing Market
Remember when our parents could buy a house for the price of what we pay for avocado toast? Yeah, neither do we. Skyrocketing real estate prices and rental costs are making it tough to afford a place to live.
Stagnant Wages
While the cost of living has gone up, wages haven’t kept pace. It’s like running on a treadmill – you’re putting in the work, but you’re not getting anywhere.
The Gig Economy
Many millennials find themselves working in the gig economy, which can mean unpredictable income and a lack of benefits like health insurance or retirement plans.
Lifestyle Expectations
Social media has a way of making us think we need the latest gadgets, the coolest clothes and the most expensive exotic vacations to be happy. Spoiler alert: you don’t.
What Can Millennials Do?
Get Smart About Debt
Start by tackling that student loan debt. Look into refinancing options or consider a repayment plan that’s based on your income. Every little bit extra you can pay down helps.
Budget Like a Boss
Get real about what you’re spending money on. There are tons of apps out there to help you track your expenses and see where you can cut back. Remember, budgeting isn’t about restricting your life; it’s about taking control of it.
Invest in Yourself
Yes, you might have a lot of debt, but if you can swing it, invest in furthering your education or learning new skills. This could help increase your earning potential down the line.
Find a Side Hustle
If your main gig isn’t cutting it, look for ways to earn extra cash. This doesn’t mean you have to drive for a ride-share company (unless you want to). Maybe you have a skill or hobby that can be monetized.
Save, Save, Save
It might sound impossible, but try to put away a little bit of money each month. Even small amounts can add up and give you a financial cushion for emergencies or help you save for a big goal.
Rethink Homeownership
If buying a home is out of reach right now, that’s okay. Consider more affordable living situations, like house hacking (buying a multifamily property and renting out units) or living with roommates.
Embrace Minimalism
Less really can be more. Embracing a minimalist lifestyle can help reduce your expenses and focus on what truly makes you happy, rather than what you own.
Seek Financial Advice
Don’t be afraid to ask for help. Whether it’s a financial advisor, a savvy friend or online resources, getting advice can help you make informed decisions about your money.
The Takeaway
No one has to be broke forever. By understanding the challenges and taking proactive steps to address them, millennials can start to dig themselves out of financial hardship.
It won’t be easy, and it won’t happen overnight, but with determination and a solid plan, financial stability is within reach.
Editor's note: This article was produced via automated technology and then fine-tuned and verified for accuracy by a member of GOBankingRates' editorial team.
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