Balancing a household budget and ultimately making ends meet for a growing family has never been easy. Add in the expectations to save for a house, college for the kids and that distant notion of retirement and I’m sure it seems impossible. Some of my favorite people happen to be millennials that are challenged with this classic problem right now, and I can assure them this dilemma is not unique to their generation.
But there’s no arguing millennials were the group hardest hit by the Great Recession. These college grads saw the number of entry level jobs shrink, depressed starting salaries and the highest levels of student loan debt in history. It shouldn’t be so surprising that millennials have flocked home in record numbers to seek refuge with mom and dad, often delaying many of the traditional rites of passage into adulthood: career, marriage, children, homeownership. I imagine some of you baby boomers are objecting to my gross over simplification of cause and effect. I understand all too well it’s more than a tough job market that has led to the traits we associate with what some refer to as the Boomerang Generation.
However, the economic environment is a factor we can’t ignore. True independence only becomes possible when you can support yourself financially. Notice I wasn’t so bold as to proclaim their ability to support themselves would make them independent . . . this is where the quirky personalities of those often-clingy millennials enter the equation. That’s material for another blog post so putting that aside, and assuming many of them may want some of the same things valued by our generation, I have growing empathy for their financial plight.
Even if they were lucky enough to land a job out of college, wage increases over the last five years have been modest at best, and in many industries, completely stagnate. This whole generation has fallen behind before they even started. And then there’s the exploding costs of child-care, healthcare and the whole new category I call “connectivity and media” expenses. Concepts like internet access, wireless communication and streaming didn’t exist a generation ago; but they’re entrenched now and have a big price tag, adding hundreds of dollars to monthly household budgets.
And there was more troubling news in a Washington Post report last month suggesting millennials should save significantly more for retirement than previous generations. Stock market returns over the next couple of decades are expected to be lower than the 7.9 percent average annual returns from 1985 to 2014 that we boomers enjoyed. Add to that increasing life expectancy and the likelihood of less lucrative social security benefits waiting at the end of the road and the picture gets bleaker. Rather than the old 10 percent retirement savings target many in my generation strived for, this scary report suggested saving 15-25 percent to avoid running out of money in old age. It’s getting a little easier to see the appeal of jumping into bed at casa de mama and papa and pulling the covers over your head.
Feeling their angst, I flashed back to 1983 when I was in their shoes. Tim and I bought our first house that year and our excitement was only mildly dulled by the double-digit interest rate on our new mortgage. Back in those days we were also coming out of a recession, and while the high inflation from the 70s was starting to be reined in, unemployment was still very high. The talk in Washington was all about economic policy to eliminate over-regulation, stimulate business growth and create jobs. Humph. . . seems what’s old is new again.
I remember my dad’s bewildered expression the day we closed on our townhouse. He wanted to be happy for us, feel proud that we’d taken such a big step. But deep-down he was sad, panicked really, for the obligation we had just taken on presented a risk to our future that he knew we didn’t understand. Because of his concern for the economic outlook and the long-term viability of social security, he had been nagging me for several years to start saving for retirement, but the reality was our new debt made saving for anything impossible. We scraped by that first year of home ownership, and then came our darling baby boy . . . and a couple of years later, our special baby girl. Well, all I can say is thank goodness for Hamburger Helper and fish sticks.
Worrying for the welfare of our children, regardless of their age, is what we parents do; it’s not reserved for any particular generation. But for some reason the recollection of our own struggles at their age makes me feel better for our dear millennials. Every generation is confronted with challenges and I suspect if we study history, many of them have been the same. And over and over the solutions have come from the very generation their parents were so worried would not be up to the task. Yes, we once ultra-liberal turned mostly straight-laced baby boomers seem to have conveniently forgetten what we put our parents through in the 60s and 70s. I can imagine as they watched a generation of free-spirited protesters and cynics with questionable morals come of age, they were convinced we were completely ill-equipped to navigate the world we were about to inherit. But we cleaned up our act and proved them wrong.
So, there you have it millennials, history would say you’re likely to be just fine. We boomers need to stop making comparisons because you will not do things the way we did, or even ultimately seek the same outcomes. But you will succeed in your own right because like the generations before you, in the end you’ll go where your collective will and best intellects take you.
P.S. And I’m not just saying this because a generation of baby boomers want their guest rooms back!
