By Erin Delmore
Correspondent
“For some reason, our parents have had an easier time saving,” said 30-year-old Aaron Tucker.
Today’s 18- to 35-year-olds are the stewards of tomorrow’s economy, but research shows they’re less equipped to handle that responsibility than previous generations.
“We try to do a lot of things our parents were trying to do. For some reason it’s just not working out,” said Tucker.
Financial experts say, millennials are living paycheck-to-paycheck, saddled by unprecedented amounts of student loan debt, rising rent prices, and a recovering job market. A recent study by George Washington University and Price Waterhouse Cooper showed, only a quarter of millennials have a basic understanding of finance.
“We don’t get that type of education, where a lot of those tools that we need to actually start saving or know about the different resources that we have, so you definitely have to teach yourself,” said Bloomfield resident Shawnte Mobley.
Two-thirds of millennials have at least one source of outstanding, long-term debt. Among college grads, that number spikes to 81 percent. And while more than half of millennials are concerned about their ability to repay student loans, that’s still true of a third of millennials making more than $75,000 a year.
“Well I just graduated from business school, so the debt piece is definitely something that I identify with closely. I mean, it’s a struggle,” said Manhattan resident Jeremy Watson.
“Our parents were able to go to college. They always tell stories about working a minimum wage job, paying for college. But the effect is that we’re not going out and buying homes, we’re not going out and buying as many things, although we’re trying to, which is actually increasing our debt,” Tucker said.
“We tend to use credit cards a lot sometimes even if we don’t have the money right away, we’ll still spend it and then try to pay that back later when we do have the money,” said Fort Lee resident Jack He.
“In my generation, a lot of people are spending money on going out and going to the bars,” said 25-year-old Alex Drew, “so if they didn’t spend money on that, you could argue that they could save a lot more.”
Researchers told us, borrowing large sums of money has become easier. Forty-two percent of millennials have reached for Alternative Financial Services, like payday loans and pawn shops, to make ends meet.
“Millennials are using those AFS such as payday lenders, pawn shops, rent to own products, tax refund advances they use it consistently,” Carlo DeBassa Scheresberg, senior research associate at George Washington University, said.
That cash-flow shortage leads nearly 30 percent of millennials to overdraw their checking accounts and more than half to carry over credit card balances. Almost 50 percent of millennials haven’t amassed a rainy-day fund to cover a $2,000 emergency, and wouldn’t be able to scrape the money together within a month.
The number one mistake personal finance experts say they see millennials making? Slacking off on retirement savings. Only a third of millennials contribute to a retirement savings plan. Experts say the rest are making a million dollar mistake.