Crippling Debt Prevents Millennials From Saving For the Future

Why aren't millennials saving money? One reason is that the crippling recession has made the generation distrustful of banks. Another is that they hardly have any money to save, especially after paying down debt.

Bouree Lam over at The Atlantic has a piece up right now under the precarious header "Why Aren't Millennials Saving Money?" Lam presents three major reasons to answer the question. The first is that millennials don't trust financial institutions:

"One study named the financial industry as one least liked by Millennials—with Bank of America and Citigroup being the most hated."

And remember: this is a world in which Comcast exists. Still, after coming of age during the Great Recession, and seeing how pretty much everyone suffered except for the corporate clowns who caused the crisis, it's not outlandish for young people not to want to associate with these businesses. Young people don't like banks. Banks are usually important for savings and investments.

The second reason is the real kicker -- debt, debt, and more debt:

"A Wells Fargo survey of Millennials reported that 47 percent spend at least half their paychecks relieving various kinds of debt (credit card, mortgage, student loan, etc.). With student loan debt in the U.S. hitting the $1 trillion markPew reports that 37 percent of U.S. households have student debt, with the median debt standing at $13,000."

That's certainly not good.

The student debt crisis is a major issue that, if unaddressed, could cripple an entire generation. Millennials' financial limitations are keeping them in a perpetual state of arrested development. Young people with tens of thousands of dollars in debt don't get married. They don't buy homes. They don't support an economy that desperately needs them to do well. 

It's going to take some major governmental intervention to right this ship, lest the entire economy eventually collapses beneath this weight. Young people need allies in Washington D.C. to advocate for this cause. That's why it's a good thing all those millennials showed up to vote, right?

Finally, the reason millennials aren't saving money is because what money is there to save? The fact that half of a millennial's paycheck goes toward paying debt buries the lede that a millennial's paycheck is pitiably paltry. The economy may be in recovery but the effects are hardly felt on those who really need a jolt. Yet hiring is still not where it needs to be, costs of living are going up, wages are not, and unemployment among young people is still way too high.

So why aren't millennials saving? On one hand, saving is hard. On the other, saving what you don't have is harder.

Read more at The Atlantic

Photo credit: rangizzz / Shutterstock

American education: It’s colleges, not college students, that are failing

Who is to blame for the U.S.'s dismal college graduation rate? "Radical" educator Dennis Littky has a hunch.

Percentage of college student dropouts by age at enrollment: 2-year and 4-year institutions

Sponsored by Charles Koch Foundation
  • COVID-19 has magnified the challenges that underserved communities face with regard to higher education, such as widening social inequality and sky-high tuition.
  • At College Unbound, where I am president, we get to know students individually to understand what motivates them, so they can build a curriculum based on goals they want to achieve.
  • My teaching mantra: Everything is permitted during COVID-19. Everything is permitted during COVID-19. Everything is permitted during COVID-19.
Keep reading Show less

The mystery of the Bermuda Triangle may finally be solved

Meteorologists propose a stunning new explanation for the mysterious events in the Bermuda Triangle.

Surprising Science

One of life's great mysteries, the Bermuda Triangle might have finally found an explanation. This strange region, that lies in the North Atlantic Ocean between Bermuda, Miami and San Juan, Puerto Rico, has been the presumed cause of dozens and dozens of mind-boggling disappearances of ships and planes.

Keep reading Show less

STARTS 11 AM ET | The 'Great Midlife Edit': How to master your middle years

Did you know that shifting to a positive perspective on aging can add 7.5 years to your life? Or that there is a provable U-curve of happiness that shows people get happier after age 50?

Big Think LIVE

Add event to calendar

Keep reading Show less

These countries are leading the transition to sustainable energy

Sweden tops the ranking for the third year in a row.

Technology & Innovation

What does COVID-19 mean for the energy transition? While lockdowns have caused a temporary fall in CO2 emissions, the pandemic risks derailing recent progress in addressing the world's energy challenges.

Keep reading Show less
Scroll down to load more…