The millennial generation is often disparaged for purchasing trendy things like specialty coffee and microbrewed beer. Scroll long enough on the Internet, and you’ll see claims that millennials don’t care about their money enough. In reality, financial anxiety plagues this generation as they care too much!
What is financial anxiety?
Financial anxiety is excessive worry about the money that you earn, that you save or that you spend. Anytime you make a purchase, you wonder about whether that was a responsible choice. You debate whether to call in sick because missing work could take a big chunk out of your paycheck. When you look at your bank statements and bills, you feel a twinge of panic.
A recent study revealed that 67% of millennials worry about money at the workplace so much that it impacts their ability to be productive, and 68% of them admitted that this constant worry negatively affects their health. It’s estimated that this group spends an average of 4 hours every work week thinking about their finances.
Why are more millennials feeling this?
The main reason why financial anxiety hits millennials stronger than other generations is that they don’t have a lot of money. The Federal Reserve studied the incomes, the savings and the consumption habits of this specific demographic and came to the simple conclusion that millennials are poor because of their smaller earnings and the skyrocketing costs of living.
In comparison to older generations, millennials are less likely to become homeowners. The Urban Institute polled millennials about the barriers to home-ownership and 53% stated that they couldn’t afford a down payment, while 33% admitted that they couldn’t qualify for a mortgage. The Pew Research Center found that the number of adults living with their parents is the highest it’s been in 75 years, with 33% of adults between the ages of 22 to 29 included in that number.
Low wages and high costs of living also make it difficult to save for loftier life goals, like retirement. A whopping 66% of millennials have nothing saved for retirement according to a 2014 report from the National Institute on Retirement Security. Many of them can’t apply for retirement plans through their employers because they have part-time, contract or freelance status.
Along with retirement savings, they don’t have an emergency fund in a separate bank account. According to The Chicago Tribune, millennials are the most financially unprepared generation with 54% not having enough money saved to cover emergency car repairs and 62% not having enough for medical expenses.
What can millennials do?
When it comes to their finances, some experts say millennials should stop saving for retirement altogether and focus on their immediate needs like paying for health insurance, tackling debt and managing their everyday essentials. Retirement is a long way away, and no one can predict what the economy will be like forty years from now.
It’s wise to reserve some money from your paycheck and put it away into a savings account. The money will add up over time and help you afford big purchases in the future. Even if you put as little as $20 per a week, that will be over $1,000 in the bank by the end of the year.
If a millennial is hit with an urgent expense and they don’t have any savings to dip into, it’s possible to turn to a company like MoneyKey to get an easy loan. It’s a short-term solution that can help people deal with a forgotten bill or an emergency repair in a hurry.
Someone can apply for an online loan (like an installment loan) and get the money they need as early as the next business day. The option has a long repayment term for additional convenience. If you are a millennial and you are dealing with an urgent expense, you can click here for more information about installment loans and how you can fill out the application online.
Although it can be daunting, don’t avoid confronting your underlying worries when it comes to your finances. Set up a day where you go through your accounts, tweak your budget and talk to your partner about your situation. Repeating this step on a biweekly basis will give you more confidence and control over your finances. You can also try stress management techniques like meditation and breathing exercises whenever you feel overwhelmed.
Having financial anxiety is understandable when you don’t have any job security, and you’re living from paycheck to paycheck. Millennials shouldn’t pressure themselves to meet the same goals as previous generations, because they will probably fall short. It’s good to save your money now, but it’s good to be aware of emergency solutions when you face an emergency.
