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Millennials – How Not to Be Part of the “Lost Generation”

by Kevin Mercadante

The Millennial Generation – the roughly 80 million people born between 1980 and 2000 – is looking to be something of a lost generation. They came too late to benefit from the Post World War II boom that lifted so many of the Baby Boom Generation, but just in time for the financial meltdown of the 2000s.

Consider some of the problems plaguing the generation:

  1. 40% of Millennials live at home with their parents – the highest percentage in history.
  2. While the national unemployment rate is 7%, the rate for Millennials is closer to 12%. The under-employment rate is even more dismal.
  3. Millennials are less likely to buy houses than previous generations.
  4. Millennials are less likely to buy new cars than previous generations, in fact many of them are deciding not to drive at all.
  5. Millennials are delaying marriage and child bearing at rates not seen since the Great Depression of the 1930s.

All of these problems can be traced to the lackluster economy, and the weak job market, particularly for full-time, living wage jobs with benefits.

But this article isn’t about the problems of the Millennials – it’s about ways to overcome them.

Self-employment may be the ultimate career direction

Self-employment career decisionIf you can’t find a decent job, the answer is to create your own, and you can do this through self-employment. I’m not saying that this is easy, only that it may be the only credible alternative to jobs that no longer exist, or have been watered down to the point of being a shadow of their former selves. Technology and globalization have done this to many career fields and jobs.

Self-employment starts by assessing your skills, experiences, qualifications, and personal preferences, and then asking the fundamental question, how can I turn that combination into a cash flow?

That question is more easily asked than answered, but you have the internet to help you. Once you come up with an idea, search the web to find other people who are making money with the same or similar ideas. You may even be able to network with them, and even to find a mentor or two.

You don’t have to plunge into self-employment as if you’re diving into a swimming pool either. You can do it on a part-time basis – while holding a full- or part-time job, or even partner with others who are looking to get into the same business.

Hatch an idea, get it moving forward, and see where you can go with it. That strategy may turn out to be more productive than looking for jobs that don’t really exist. And it may be the wave of the future for the entire generation. Don’t fight it – roll with it.

Thrift needs to be a way of life

Money tips the Greatest GenerationSimple strategy here: if you can’t afford it, don’t buy it. Again, easier said than done, especially to a generation that’s been marketed up to it’s eyeballs on products and services of increasingly marginal (OK, useless) value. That’s the essence of good marketing – taking a new product, and turning it first into a want, and then into a full-fledged perceived need.

Marketers do this all the time when they convince people to buy a new car every few years, replace last year’s wardrobe (or become a social leper), or to buy the latest technology upgrade that’s 5% better than its predecessor, but 50% more expensive.

Say no to all of it. The less of anything that you need, the lighter you can travel in life, and the less income you’ll need. From a financial standpoint, adopt the less is more doctrine, and you’ll be headed in the right direction.

Specifically, concentrate on the following:

Find less expensive ways to do everything. Ask around and do a little bit of research, and you’ll quickly find that there’s almost always a cheaper way to do anything. If you’re buying clothes at the mall, become a regular at thrift stores instead. Rather than buying a new car, buy the best one you can for the amount of cash that you have. If you’re food shopping at a popular grocery store chain, switch over to Aldi or another discount grocer instead. What ever you’re paying for anything now, you can always find a less expensive way.

Keep your housing payment low. Baby Boomers overdosed on housing, and many are now paying a steep price for the addiction. Housing is a foundational expense. That means most of your other expenses will rise and fall with the size of your house payment. Keep housing costs as low as possible, and redirect the savings into either debt payoff or into investing.

Stay out of debt. Debt runs with jobs and income. If it’s tough to get a well paying job, you should avoid debt like the plague. This is even more important if, like so many Millennials, you’re already carrying an out-sized student loan burden. Buy no more than you can afford to pay with cash – or cash on the barrel as our grandparents’ generation used to say. It worked well for them and it can for you too.

So does saving money…

As dependence on credit has increased in recent decades, the perceived necessity to save money has declined. Resist the trend. Many of your worst financial problems and stresses will be solved simply by having a few thousand dollars in a money market or savings account.

This is also the foundation of investing. Once you have enough money saved to cover reasonable emergencies, you can direct future savings into investing. This will be an absolutely necessary strategy for Millennials. Jobs and careers are no longer certain, and traditional pensions are now all but extinct – under the assumption you could stay on a job long enough to collect one.

Start to think outside the box – the standard strategies that worked so well for the Baby Boomers – get a “good job”, buy the most house you can afford and save money for a comfortable retirement on or before turning 65 – may no longer apply. And if they don’t, you have to be prepared to define, create and build a very different – but still meaningful – future.


Published or updated February 17, 2014.
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