It doesn’t happen often, but I’d have to disagree with part of Nick's last weekly comment.
The line that “people love to buy things they don’t need, with money they don’t have, to impress people they don’t like,” is certainly not showing its date, in fact, it can be argued that in a way, it’s never been truer.
Millennials find ourselves struggling to keep up with our peers who we perceive as having a glamorous, jet setting lifestyle like the Kardashians…gee thanks social media.
A recent Credit Karma/Qualtrics study of U.S. consumers, published May 30, 2018, on the Credit Karma website, found that millennials often feel pressure to spend money they don’t have on travel, music festivals, weddings, sporting events or social activities such as dinner and drinks with friends.
In fact, the study claims that nearly 40 per cent of millennials spend money they don’t have and have gone into debt to keep up with their peers.
But it’s not just frivolities that are having a negative impact on the pocketbooks of millennials.
In high school during the late-90s/early-2000s, we were encouraged, no, pushed to pursue a university education funded partially, if not fully, by student loans. A university degree was sold as the “golden ticket” to a successful, financially secure life. In 2007, at the age of 24, bright eyed and full of idealistic career expectations, I graduated with my BA and $45,000 worth of student debt.
Eleven years later, I’m working two jobs--anywhere from 50 to 65 hours a week--to pay off the remaining balance. I am one of the lucky ones.
Student loan repayment, poor employment opportunities and a ridiculous housing market are certainly leaving millennials struggling to make ends meet.
Not that it needs to be stated, but baby boomers and millennials have different financial concerns, as clearly illustrated in the graphic below.
Today, millennials looking to get into the real estate game with their first home purchase can expect to pay nearly 40 per cent more than baby boomers who were buying their first properties in the 1980s, according to a Business Insider article from May 28, 2018.
Now that’s a US stat; for someone looking closer to home here on Vancouver Island, it seems even further out of reach as house prices have more than doubled in just the past five years.
Thanks to more stringent mortgage qualification requirements, tax and legislative changes, as well as rising interest rates, fingers crossed that one day in the not too distant future I will be able to make the transition from renter to homeowner.
Many of my peers however, will not.
They will continue to pay overpriced rents, overspend on entertainment, and be tied to their student loans and consumer debt for years. Thoughts of a stock portfolio barely in the periphery.
Google closed at $1,215.85 USD on Friday, which, at BC’s current minimum wage of $12.65 CND, would mean that after tax, someone earning this rate would have to work more than 100 hours, forgo paying rent, eating and all other expenses to purchase just one share.
Wait...WHAT?! Let’s let that sink in…