Millennials, or Generation Y, is the name given to the young adults born between 1980 and 2000; they are changing the way the world functions one unfiltered selfie at a time. Sharing their radically different approach to everything we thought we had figured out before: their difference of values, their seamless reliance on technology, their different exploration of property and finances, their love for travel, avo toast, and coffee. Everyone is trying to understand just how this generation works. Millennials have been widely scrutinized by people all over the world who are trying to understand them, redirect them, comprehend their likes, dislikes and the way they see the world as their approach to life is radically different from the generations that came before them. Millennials have a unique perspective of the world, they have also acquired an exclusive list of requirements for what their lives should look like, and it’s radically different from the generations before them, but is this by choice or by default? (A question which has been speculated widely by people from all around the world.) The millennials place immense value on time and experience opposed to things and money which is vastly different from their predecessors their vast different range from politics, religion, marriage, education, and monetization which all cause large gaps of understanding between the various generations. As the world evolves it seems as if the gap is only growing.
Different Money Goals
– Nearly 50% of all millennials believe the primary indication of financial stability and success is if you are debt free.
– Millennials tend to think short-term when it comes to saving, saving only for things like a holiday rather than an investment or a down payment on a house.
– 25% of millennials say that they don’t know how to invest.
– They have different financial priorities.65% of millennials believe losing their phone has a more significant impact on their lives than if they had to lose their car. Value has been reassigned to smaller items, like a cellphone, where previously value was placed on big-ticket items thanks to the likes of Uber and Taxify.
– Millennials have limited trust in banks with 53% of them believing that their bank doesn’t offer them anything that another bank can offer.
– They are not convinced about traditional high street banking with 75% of them believing that within the next five years the way we make money and process transactions will be utterly different thank to the innovation of Bitcoin.
– Due to hefty rent and student loans, 37% of millennials plan to work until the day they die.
One of the many reasons why people are up in arms about the way in which millennials are choosing to live their lives, is because they are unable to fulfill the societal norm of the generations that came before them. You know, the norms that go: graduate, get a job, buy a house, have 2.3 children- and this is not because they don’t want to. This inability to fulfill societal norms places a massive uncertainty on how a future of adult millennials will look for our world.
However uncertain the future might be it hasn’t stopped people all around the world from bashing the millennial lifestyle and choices, saying that their inability to purchase a house comes down to their unrealistic lifestyle expectations. Have millennials torn up the adulthood rulebook as an act of generation rebellion? Or has something else made it impossible for them to ‘adult’ like the generations before them? It can’t all come down to expensive avo toast and lavish coffee trends. It has to be a combination of things – part of it due to the situation in which the generation before left the world to them: part salary increases which have only gone up 3% since 2007 despite living expense going up by 10%, part graduating during ‘The Great Recession,’ part poor job prospects, and part outrageous student loans. Forever stuck living in debt Millennials, really don’t stand a chance. They are living in an era where expectations are high, and reality is not able to provide a realistic means of ever meeting these expectations. They are trying to literally keep up with the Kardashians and the ambrosia avocado toast craze. Regardless of which side of the avo toast debate you fall, we can all agree that avo toast, despite its mighty deliciousness, cannot be the new scapegoat the financial world.
Statistics state that 80% of millennials would like to purchase real estate someday, but very few are in the position to buy with very little if any savings, with all their earning going into paying off student loans and to the struggle of keeping up with the massive increases in living costs and the small salary increases. Millennials are drowning in financial inability making it impossible to keep up with a certain standard of living as well as have extra to invest or save to purchase a house of all things – which realistically they would have to save for decades to have enough for a substantial down payment. Young adults used to account for a much more significant portion of homeowners than they do today, with the prevalence of increasing debt and tightening housing markets pushing back the ages of first-time homeowners. Forcing them to live at home with their parents or in a shared space, the percentage of millennials married and living in their own house has dropped to a drastic 50% since 1960. More than half the millennial generation are opting for shared ‘untraditional’ co-habitation houses as they reach adulthood – basically living in a less cool episode of Friends. Millennials get a bad rap for their financial habits or lack thereof when really, they are more frugal and financially cautious than the generation before them earning 20% less at the same stages of life despite being better educated, and acquire more employable skills. Buying a house now is something that millennials strive for, but is something that isn’t attainable, with 72% saying affordability being the primary obstacle as they do not earn enough to put some away. So, Millennials eat the avo toast anyway because let’s face it, they’re never going to be able to purchase a house anyway.
If you are a millennial who forgoes your avo toast to save and is looking to buy a castle of their own… A place to call home one day but still haven’t managed to make a dent in the prospect of buying, here are a few tips to help make all your wishes come true despite the current financial situation our world is in. Buying a home is one of the most massive purchases you will make so it is essential to be prepared and aware of what it will take.
Knowledge is power, and one of the most important things you can do when it comes purchasing a house to arm yourself with knowledge. Know the lingo, terms, and numbers, understand what you want, how you plan to get it and what steps need to be implemented to achieve your goals. With 20% being the standard down payment goal there is no need to ‘over-house’ yourself know your worth to ensure you don’t purchase for too much and end up becoming enslaved to your mortgage payments. If you need help try and get financial assistance to talk you through all the steps you don’t understand, steps of down payments, mortgage, PMI, and mortgage insurance.
Know your Credit Score
A large majority are unaware of what a credit score is until they hear that they have a bad credit score. It’s important to know and understand how your credit score works and what exactly your score is as it has an essential impact on your future purchasing power and endeavors. Mortgage lenders, businesses, credit card companies and other accounts all look at your credit profile before assessing that you are a worthy candidate. Errors or high credit scores can cost you more money through higher interest rates on your credit card, mortgage or even your insurance policies. Think of your credit score as your body and the importance of keeping it financially fit, by paying your bills on time, by reducing spending coast and credit limits and by holding around 35% of available of card usage. Start early and keep your credit in good health to help you reduce your cost when looking at purchasing a house. Start early and reap the benefits of a healthier financially lifestyle.
Don’t Keep Up With The Kardashians
The most prominent obstacle is being able to save money and change your spending habits. You need to change your perception of money and its long-term value; you need to not fall into the trap of keeping up with the Kardashians, trying to live up to an unrealistic lifestyle. How bad you want your goal will determine how much you are willing to sacrifice to achieve the keys to your dream house. Include family, friends, partners, and co-workers in the challenge to help keep you accountable for excesses and unnecessary spending. Create a budget and stick to it. Live within your means, draw up a timeline of your ideal time to purchase a house, then take the money and save it explicitly for a home, subtract it from the 20% you’ll need for a down payment and divide that amount by the number of months you have until you reach that goal month.
A Little Goes A Long Way
What you give up today you can have more of tomorrow. Funds are tight, but it doesn’t mean you can’t start saving today, a little goes a long way, and even if the step is small it’s still a step in the right direction, a step in the direction of your new home. 61% of homeowners use their savings account to purchase their homes, so it’s never a bad idea to start one. A stockpile of money doesn’t happen overnight, but with some sacrifice, dedication, and ambition that dream hose could be yours.
Nothing is impossible millennials. The world is your oyster, and how you choose to go about living it is up to you, but nothing is impossible. And although it is harder for you than it was generations before if you work hard and save smartly then your dream house can be more than a dream but a reality, if not now than someday.