6 million Aussies are struggling with cost of living but why are Millennials always worse off?
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More than half (54%) of Millennials say they are likely to experience financial hardship in the next 12 months, which is far more likely than their older generation counterparts (Gen X 39% and Baby Boomers 31%), says ASIC’s Moneysmart in a new report .
It’s not surprising that young adults in their late 20s and 30s are feeling this way given that this is typically the period most people are trying to bed down their financial habits and build some savings.
Get better with money - over time
Financial flexibility doesn’t really come in young adulthood, at least it didn’t for me or most people I know my age.
It’s only once you have some solid investments to your name, be it a property, a paid off car or maybe a portfolio of shares that you can feel more confident about your personal finances.
My first step toward this was a small apartment in Sydney which I was lucky to buy in the mid-2000s at a lower price point because it was fairly old. But it meant a lot and helped me build confidence.
Handling the high prices of 2024
Clearly making that initial step in the money journey is much harder in 2024 because most property markets in cities like Sydney and Melbourne are far more expensive relative to income, car prices have truly spiked and investing can sound a great deal more complicated in the age of digital money, AI and quick-win hype reels!
But a lot of data that comes out now paints a similar picture - that young adults, be they Millennials or Gen Z or whatever are painted into a corner of debt. Meanwhile, if you believe a lot of online news headlines, Boomers are living it up!
The truth is, I think a lot of Aussies from across the generations are finding it hard going at the moment. Our Mozo data shows that while not everyone has alarm bells going off about their money, there is concern all the way from young Cousin Judy up to old Uncle Bill!
Indeed we found in our data that 21% of people aged 18-26 had some concern about their debt levels, 24% aged 27-42 felt the same, while 18% of 43-58 year olds were in the same camp.
You might expect that from the slightly older group as I say. Still, alarm comes in all shades, and so it shouldn’t be ignored that 23% of 43-58 year olds (that’s Gen X for the label lovers) are a little concerned about debt. A little concern is the same as some concern in my book.
Financial flexibility
Where there’s a difference between these age groups is in the financial flexibility that I talk about - having money in the bank, some savings or a few investments that can help in a pinch.
Obviously older adults have had more time to work at these things, so my message to the younger crowd is don’t get too down. There are no easy answers but keeping debt at bay and over time is the key.
On this point, ASIC says Millennials who have personal loans and debts are more likely than their older counterparts to say they will have trouble making repayments in the next 12 months (52% compared to 32% of Gen X and 34% of Baby Boomers).
Facing hardship is hard
And, 40 % of Millennials say they have already experienced financial hardship, the research found.
These types of numbers are maybe expected but not impossible to improve upon. If you’re at this stage there are people you can turn to. What’s required though is actually seeking help when you need it.
ASIC reports that 57% of Millennials are unaware of their right under the National Consumer Credit Act, to apply for hardship assistance through their lender.
Worse still, around 4 in 10 Millennials would rather get a second job (48%) borrow from family and friends (45%) or sell their belongings and assets (43%) before applying for hardship assistance from their lender.
Overcoming doubts and debt
That’s not a good way to think about this. If you don’t have a straightforward way to handle mounting debt, be sure to turn to someone who can help you get back on your feet.
If you’re simply just wanting to make better choices with your money, we have loads of good information on our site to guide you and help you compare options.
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