Is the financial industry failing millennials?


Millennials might miss important milestones because of debt, but they don’t have to.

A major factor explaining why Millennials start a family late could be the a crushing debt that they had to assume.

In reality, 30% young adults say finances play “a major role in their decision to start a family,” according to a report from Bank of America, with much of the young adult population pushing children back into their 30s. According to a Pew Research Center 2017 To analyse, in 2016, only 48% of women aged 18 to 33 were mothers. This is a decrease of 57% compared to the previous generation.

That doesn’t mean millennials don’t want to have kids, though. According to an analysis by the National Center for Health Statistics via Pew Research Center1.2 million women in the United States became first-time moms in 2016. Additionally, 52% of millennials who have yet to have children said parenting was one of their main life goals.

So why do millennials put off having children if it’s a major goal for them?

There are plenty of factors that could put millennials behind previous generations, but the most prevalent is debt. Having a child, getting married or even buying a house is daunting when most millennials struggle to pay off their student debt. Even if they feel financially secure enough to start a family, it’s unclear how long their financial security might last.

According to data from the 2014 US Census, 40% of the unemployed in our country belonged to Generation Y. And, according to the National Center for Biotechnology Informationnearly 37% of respondents cite financial instability as a major reason for divorce.

All of this information can put a damper on young adults coming of age and wanting to start a family. From their perspective, it may seem like the odds are stacked against them. This generation may struggle to see the benefits of having and maintaining a family in the current financial climate, especially under the weight of a national student loan deficit that continues to grow year after year.

Knowing this, how can the financial industry help millennials succeed?

The easiest way to avoid getting into debt is to not get into debt in the first place, but this generation didn’t really have a choice in the matter. Another way to avoid debt is to get ahead of it. This generation of young adults could benefit from financial advice. In my opinion, many millennials suffer from ignoring their debt until it’s too late. While debt can be terrifying, it’s even more terrifying to be in the dark, to watch it grow big enough to swallow up an entire generation.

Millennials need debt advice more than ever. With business debt from student loans, cars, and even mortgages continuing to mount, these young adults need to understand exactly what their debt could mean for their future.

Financial advisors can help these young adults budget their finances and figure out how much they need to save to get out of debt and reach their life goals.

Financial advisors, however, cannot bear the brunt of this generation alone: ​​not when so many millennials struggle to find the time to listen or research while working full time and also maintain secondary agitation in order to pay their bills and avoid endless debt.

Millennials thrive on automation and visuals. A 2018 report by Navient and Ipsos, showed that around 51% of young adults chose to use automatic payment features for recurring bills. The financial industry needs to create and automate new ways to save for millennials. There are dozens of financial apps that allow millennials to generate automatic cashback or savings, but the industry could do more.

In recent years, some companies have started offering student loan repayment programs under a benefits plan, specifically for this generation that has found itself so in debt. It’s been a huge improvement in the financial landscape, but it’s still new. Few companies offer it, and although it has been a while in coming, it has yet to take off in any substantial way.

Millennials need guidance and support from their peers. They need to have the power of a financial advisor at their fingertips. The financial industry and banks need to give young adults insight into the kind of stages they will face and what they need to prepare for throughout their lives.

Having all this debt without really understanding how to get rid of it creates a gap between this generation and the previous one. The biggest parts of this are seen in parenting decisions as well as retirement savings.

A 2018 report from the National Institute on Retirement Security showed that nearly two-thirds of working young adults have no retirement savings. Additionally, many of the millennials who have something saved rely on their employers to enroll them in their 401(k) program automatically.

It all comes down to a choice. Should millennials be saving for something they consider far in their future, or should they spend most of their money on current debt? It shouldn’t be like this, though – young adults should be able to do both. They should be able to save for their future while getting ahead of their debts. The problem is they don’t know How? ‘Or’ What.

Millennials could have great prospects if the financial industry could simply grow with them. Their need for more automation, education, visualization, and technology has gone unmet long enough. Isn’t it time we as finance professionals caught up?


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