We get it. The millennial generation is now the largest in the United States and in many other developed countries too. People born between about 1980 and 1997 are now the majority of new homebuyers, of new hires, new parents, and increasingly new political leaders as well.
A funny thing has happened though since their parents’ generations grew up. Things didn’t stay the same. In many developed countries, cost of living went up while wages stagnated. Even in developing economies, the effects of slower growth are starting to be felt by the now fully adult Millenial generation.
Millenial Money Morality Tale
So a genre of content has appeared, and we are certainly not innocent of contributing to it ourselves: the Millenial Money Morality Tale. Millennials were increasingly told that they were not making ends meet because of their spending habits, despite spending less than other generations. This while the share of wealth the millennial generation owns is lower than any previous generation, and 4x lower than the baby boomer generation (born 1946-1964) at a similar point in their lives.
Maybe things are changing. As we millennials (I was born in ‘85) become the largest demographic, our concerns and needs are being increasingly heard and listened to by governments around the world.
Perhaps we’ll finally be able to put the Millenial Money Morality Tale to bed for good.
In the spirit of doing that, today we’re going to dive into the 9 most annoying things millennials have been told about money, why they’re annoying, and even what you can do to respond to bad pieces of financial wisdom from generations past.
Our 9 Reasons Why Your Financial Advice is Annoying
“Learn to Balance Your Checkbook”
Why it’s annoying: Us older millennials were told this was a very important skill. For obvious reasons, it’s not anymore. To be honest, even when I first got a checkbook at the age of 18, it was barely a skill that still mattered. It was clear everything was going to be electronic in a few years, and companies like… I don’t know BudgetBakers would probably come along to help with tracking your daily transactions so you didn’t need to balance a checkbook.
How to counter it: “What’s a checkbook?”
“Save 25% of your income for a rainy day.”
Why it’s annoying: :very slow, loud sigh:
How to Counter it: “Great idea! Which should I not pay for, insulin or food?”
“Stop buying that avocado toast”
Why it’s annoying: It’s a stereotype that doesn’t really apply to most of us. Besides, the cost of luxury food items has increased faster than the cost of basic food items. Does this mean that millennials don’t deserve to occasionally eat nicer, healthier, and more nutritious meals? With obesity and heart disease a growing problem in developed countries, the food shaming is a bit counterproductive.
How to counter it: “Gosh you’re right, especially when a McDonalds hamburger costs a nickel.”
“Buy a home as soon as you can.”
Why it’s annoying: As if this little gem never occurred to us. No, we enjoy renting and paying the same or more than we would for a mortgage payment because there are no homes in our price range that aren’t hours from work and good schools or public transport. Millennials want to buy homes.
How to counter it: “How much of my zero savings should I put towards the down payment?”
“Just work hard and you’ll succeed.”
Why it’s annoying: Millennials do work hard. In fact millennial work culture has been identified by researchers as being particularly unhealthy and obsessive. And we work just as much as older generations did, and even think about work more often. Add on to this that as previously mentioned, we generally get paid less and have less wealth than previous generations did at the same age.
How to counter it: “How did you answer work emails at 9pm in 1973?”
“You should cut down on all those internet subscriptions.”
Why It’s annoying: Oh even we are guilty of the same thing. We even help people cut down on their subscription costs with Wallet. The difference is we don’t think you should stop paying for Netflix because you don’t deserve it. We just think you shouldn’t be paying for it if you’re not really using it. The advantage of monthly subscriptions is that you’re not on the hook for them no matter what, unlike cable TV bills which, because of bundling, cost more than a few subscription services, and can’t be cancelled.
How to counter it: “How much is your cable bill?”
“Contribute as much as you can to your private retirement account.”
Why it’s annoying: Even if millennials are lucky enough to have an employer who matches contributions to retirement accounts, the truth is that these accounts can come with surprisingly large hidden fees. If an employer doesn’t match contributions, a retirement account’s 1-2% fees can eat up 30-40% of the potential future earnings of the account through loss of compounding interest. That’s a lot.
How to counter it: “I’ll read the prospectus first.”
“Why pay someone to fix something when you can learn to do it yourself?”
Why it’s annoying: Nothing against learning new skills, but somehow I doubt struggling with the inane assembly instructions for an entire bedroom set from ikea for 3 days is probably not that cost effective in the long run. After all, energy you’ve wasted on a weekend or an evening takes away from family time and may affect your real work. Also, if you’re anything like me, your furniture, electrical, water, or heating systems will not last as long if you try to do all the repairs and maintenance yourself.
How to counter it: “You’re so right. Wanna help me retile my bathroom on Monday night?”
Why it’s annoying: This just isn’t particularly good advice. I mean it’s fine as far as it goes. But Gold has not outperformed the stock market over my lifetime. In fact stocks outperformed gold over the last 15 years by a ratio of 3 to 1.
Demand for precious commodities is volatile historically, and new sources of or needs for commodities can change the demand profile very drastically. It might be a good idea to have some precious metals in your portfolio – but generations of people who grew up receiving this advice have ended up worse off because of it.
How to counter it: “A lannister always pays his debts.”