Millenials Get a Bad Rap on Finances

Tuesday I brought along one of my standbys for lunch, and avocado and multi gran bread, for lunch. I needed to get out of my office for a bit so ate in our little gathering space with others as most were finishing their lunch. Someone sarcastically referred to my lunch as extravagant mentioning the avocado toast and referenced a news or editorial article that despite being over a year old apparently was all over the Internet about how avocado toast is keeping millennials out of the housing market. Not being a millennial, I wondered how my simple $2.00 lunch was causing financial havoc on home ownership. I apparently missed this media frenzy, but found this article through an old Money magazine link, Stop Buying Avocados If You Want to Buy a Home.

I get what the originator is trying to implore-buying $19 lunches and  multiple $4.00 coffees regularly will have an impact on your finances. Travelling to Europe every other year will put a dent in your down payment savings. Yet, if it takes longer, or not at all to get on the home ownership path, it's not this media hype reason. I don't think today's millennials are any worse at managing money than younger adults were three decades ago. I don't think there is an attitude of deserving luxuries more so than their parents. I think priorities have changed as society and what is normal has changed. There is also real financial pressure that always foregoing a nice lunch and coffee isn't going to solve. Let's look at a few factors. This is all in my humble opinion, so feel free to comment away any different thoughts.

1. I'll  start with a big factor-student loan debt. For most students that did not have parents able to help them out, working enough hours to both pay tuition and room and board without taking out loans is nearly impossible. I waited tables in a pizza restaurant weekends and could cover both. Let's say a student just took out $6,000 a year, enough just to possibly cover the most basic of housing, payments out of college will be close to $300, assuming they at least managed their tuition. While not all kids have to go to a four year college to be successful, more jobs than in the past require a bachelors just to get an interview.
2. The days are long gone that someone will be hired after college and stay with the same company their whole career. Jobs are more flexible, or less permanent now it seems. There seems to be a growing free lance market, partially by choice, but also as employers try and only hire what they need, for the time they need it. Being able to save chunks of money for a down payment and closing costs when you might have days and weeks between gigs is both difficult, and scary. Those savings accounts, if they exist, need to be cushions between jobs.
3. Let's face it, once a person buys a house, you are locked into that mortgage from anywhere from 15 to 30 years. In these unstable job times, where people change jobs much more frequently because of changes in work structure, relocation needs, and downsizing, being locked into a long term payment feels riskier in a persons 20's and early 30's than it did when I bought my first house. Sure, if dire consequences hit, there may be some things you can do to off set a permanent cost like working a second job, or maybe taking on a border, but adding more hours or having someone move into your abode to make ends meet doesn't scream buy a home. While renting puts a person at the mercy of a landlord, at least relocating to where a job might be, downsizing to a smaller place, or heaven forbid, move back home temporarily are viable options.
4. A medical journal, JAMA, released that life expectancy rose from 73.8 to 79.1 years, giving millennials over five more years of adulting to plan for. This means many young people already feel like they will be working longer, coupled with baby boomers and Gen  working more years. Moving up the career ladder, thus higher earnings is more difficult. 
5. Last, and while a generalization, millennial's are not willing to wait for retirement to enjoy hobbies and travel, and I applaud this. If you've already come to the decision you're working throughout your 60's, why not factor in more time with friends and family and travelling while young and healthy. 

People in my life are just examples, so nothing scientific about this. Neither my son or daughter are probably going to be home owners for a few years, but both travel for work, have friends literally across the country and across the ocean they meet up with, and haven't fully decided where they want to establish permanent roots. Two thirty somethings I supervise just bought houses. The first, lived and taught in Korea for several years, has lived in multiple states, only at 33 did she decide Minnesota will be her place to put down roots. The other, 32, just got married, but took a short leave from December to April and spent 14 weeks in Asia, Australia and New Zealand. Neither are trust fund kids and both have student loan debt. One had been a regular lunch delivery type gal, but seems to have curbed that habit since her closing. By their age, I was on house number two, but other than my France exchange student trip after high school, my first plane travel wasn't until my kids were 6 and 8 and we went to Florida. Priorities weren't better, just different. 

I too don't want to hear complaining about the cost of living and the inability to buy a house by someone who buys $19 pieces of fruit on whole grain toast. But neither am I willing to classify an entire generation that has decided to spend money while young on life experiences as foolish and selfish.