These are bad times financially for millennials. But boomers can celebrate

While boomers are increasing their prosperity, millennials are experiencing the opposite. Over the last year, their financial well-being fell by 94 points – the largest decline of any age group.

This situation reflects the different problems that millennials and boomers face, especially after 2020. The effect of the pandemic was a cycle of booming and falling spending that, for a certain group of Americans, especially older people with both savings and real estate, meant more funds for a rainy day and stability. For younger generations, this period was associated with mounting debts and uncertainty.

Jaime Toplin, financial services analyst at Morning Consult, thinks so The current poor financial state of the millennial generation is partly due to the stage of life they are in. In her opinion, it is a bit of a “double-edged sword”.

— Millennials have grown up a bit. They are in a period of peak earnings. They have families, they start buying houses. That’s the good side, she said.

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As for the bad one, it’s the time of the highest spending in your life, especially since in the case of the US it coincides with the return of student loan repayments. According to the Morning Consult survey, approximately 26 percent representatives of this generation have incurred educational debt, compared to approximately 5 percent people from the baby boom. Since the well-being index reflects what consumers think about their finances, it can be said that the well-being of millennials is not the best in this respect.

Nearly half of this generation said that because of their financial situation, they believe they will never achieve what they want in life – this is an increase of 4%. compared to the previous year and a feeling of 38 percent all adults. Simultaneously 55 percent Millennials express fear that the money they already have or plan to save will not last long. This is an increase of 3%. compared to last year and by 9 percent. more than all adults realize.

However, this does not mean that millennials are in a dire financial situation. Results from the Federal Reserve’s Consumer Finance Survey show that The median net worth of Americans aged 35 to 44 in 2022 increased to $135,000. $300, compared to $105,000. $610 in 2019

However, the study also shows that among all age groups, Americans aged 35-44 are burdened with the greatest debt. Each of them is in debt on average PLN 140,000. $400 According to Morning Consult, approximately 43 percent Millennials have credit card debt. For comparison, 36 percent have similar debt. boomers.

At the same time, baby boomers “are consistently doing much better than other generations,” Toplin said. They have a solid financial position and a good savings cushion, and with retirement approaching, many of them no longer have to worry about saving for it. They also benefit from high interest rates, retirement investments and rising home values. Even though the economy is slowing and job opportunities are declining, the future is bright for boomers.

— This puts them in a uniquely advantageous position to weather difficult times because they are more established and financially secure, which translates into a better opinion of their own financial well-being Toplin said. — Millennials, on the other hand, have a lot more to worry about.

The above text is a translation from American edition of Insiderprepared entirely by the local editorial office.

Translation: Dorota Salus