Millennials are constantly hounded over what many consider to be their active participation in the killing of U.S. industries. Everything from napkins to diamonds is on the millennial generation’s chopping block, and baby boomers can’t seem to figure out what is driving these changes. Despite this, Millennials still seem to be willing to spend money on things like travel, but do they really have the capital to do so? What challenges do Millennials face in today’s economy, and why do they choose to prioritize travel over the more traditional spending habits of previous generations?
Pressure to Think Long-Term
While Millennials contend with a near-constant barrage of criticism over their spending habits (or lack thereof) they also face incredible pressure to think further ahead towards their long-term plans. Millennials are just reaching a level of economic security where they can start considering purchases like homes and newer cars, but they still have to deal with the looming specter of retirement and estate planning. It is common sense that saving up for retirement is important, but for a lot of the millennial generation it continues to sit on the back-burner.
Millennials are staring down a retirement crisis with little recourse available to them. A scary number of Millennials have admitted to having no money in their savings account, meaning that not only are they not saving for retirement, but many Millennials aren’t saving for anything at all. A good rule of thumb with retirement savings is to have an amount saved up equal to your yearly salary by 30 years of age, but many Millennials are rapidly approaching 30 with nothing to show for it.
It is true that Millennials are lagging behind previous generations in their savings, but depending on where you look, the retirement crisis may not be as bad as it seems at first glance. Unfortunately, the solution to this predicament is unlikely to fill the millennial generation with hope for the future. The solution is to work for far longer than previous generations, saving retirement until you’re 70 years instead of the more traditional 62 years old that the baby boomers have enjoyed.
Massive Debts
Stagnant wages, of course, play a role in a millennial’s inability to properly save for retirement, but there are also several other factors that need to be considered. Millennials aren’t saving for retirement because they are more focused on dealing with their existing debts, with a priority on student loans. Additionally, many Millennials are just now entering the workforce, as they spent additional time in school obtaining a master’s degree. Some Millennials make the conscious choice not to save for retirement until they have employers that match 401(k) and simple IRA contributions, figuring that it isn’t worth it to save up until they have the extra help.
Millennials also happen to be poor overall, with many living well below the poverty line. Poverty affects Millennials in both cities and suburban areas for a multitude of reasons, from lack of access to federal assistance programs to the unintended consequences of gentrification. Rising rent costs are pushing Millennials out of the cities and into the suburbs, potentially increasing commute times for many and making the need for an automobile become much more pressing. This adds further pressure to the millennial generation’s debt problem, as moving can often require a substantial initial deposit that many Millennials simply don’t have access to.
However, despite the widespread poverty and debt that follows Millennials, it is not impossible to get out of debt. Certain forms of unsecured debt can be managed with debt consolidation and settlement services with the goal of paying off debt as quickly as possible. Unfortunately student loan debt does not qualify for these services, even though it is technically unsecured debt, because it operates under a different set of rules and regulations.
Yet They Still Travel
Despite the combination of debt and pressure to save for their retirement, Millennials still find the time and money to travel. This is in part due to technology’s impact on the travel industry, as Millennials now have the ability to work remotely and engage in international entrepreneurialism, giving them the option to take their business with them when they travel. Instead of resigning to the outmoded idea that travel is exclusively for vacations, Millennials are blending travel into their work lives because they are actively prioritizing travel.
Not only do Millennials travel, they express more interest in global travel than older generations by a 23 percentage point margin. Millennials are now the fastest growing age segment in terms of money spent on travel, and when Millennials travel abroad they tend to stay for extended periods, the average trip lasting 58 days. Whether this can be attributed to the millennial generations’ inherent wanderlust or widely accessible travel planning apps like AirBnB or Skyscanner is hard to discern, but the fact is that Millennials are turning the travel industry on its head.
Millennials are prioritizing travel in their lives because of a trending idea among the generation that experiences, rather than things, brings greater happiness in the long run. While major purchases like homes and cars come with a hefty price tag, they also come with the stress of knowing that those important items can be taken from you. Experiences like international travel, however, are seen as money well spent, because no matter how low life gets or how high the bills stack up, a good memory can’t be taken from you.
