11 Nov Millennials and Money
Who are the “millennials” and why is everyone paying so much attention to them? According to the U.S. Chamber of Commerce Foundation, the tag of millennial is being applied to those born between 1980 and 1999. Now aged between 16 and 35, their numbers are plentiful and they are having a dramatic impact on the economy. The generation set to take over from the aging baby boomers is facing plenty of money problems, too.
On the one end are the younger millennials who are trying to figure out how they are going to pay for a college education. On the other end of this generational spectrum are the millennials who have already graduated. They are now trying to pay off the student loans they accumulated during their college years. Some are finding this very difficult to do, and it is impacting their ability to move out on their own, marry, buy homes, and start families. Even those that are able to land lucrative positions are finding that their past economic choices are affecting their ability now to plan for their own children’s education or even their far-off retirement.
Numbering about 80 million, millennials are forging new paths that their parents and older “Generation X” siblings may not have experienced. Perhaps if some of the older millennials were to provide advice for their younger cohorts, they might say the following:
• Education is Essential: Not only are millennials more likely to graduate from high school, they are also more likely to move on and graduate from college. That’s a good thing, too, because that college education will make a huge difference in their ability to earn money. Study after study reinforces the financial benefits of a college education. The difference in earning potential over 40 years by level of education can be in the millions of dollars.
• Student Loan Debt Can be Difficult: The average student graduates from college with about $25,000 in student loan debt. Many find that it is difficult to make several hundred dollars in payments every month, while still leaving money in their budget for regular living expenses. The older millennials might advise the younger ones to be sure that they only borrow what is absolutely needed, and that they learn about all of their student loan repayment options.
• Get Creative About College Financing: Perhaps the best advice might be to start early and think often about paying for college. Younger millennials can learn from the mistakes of their elder new agers and plan out the college financial process more effectively. A smarter combination of savings, scholarships, financial aid and work-study jobs might be just the ticket for these youngsters to graduate without the same financial burdens.
One great way to make sure you are making the best financial decisions about college is to talk to a professional College Financial Aid Advisor who can help you solve the financial aid puzzle. Contact College Financial Aid Advisors (CFAA) or visit my About.com website, Paying for College.