MONEY MYTHS: MILLENNIALS VS. BOOMERS

“When I was trying to buy my first home I wasn’t buying smashed avocados for 19 bucks…”

–Tim Gurtner, an Australian millionaire, commenting on millennial spending habits

“I love baby boomers who say, ‘kids don’t even know how to write cursive,’ in a negative way like ok grandma, you can’t even turn your laptop on without getting 6 viruses and wiring half your retirement money to a Nigerian prince.”

–Zach Wallen, March 13, 2018, boredpanda.com

When it comes to money, Boomers (born 1946-1964) and millennials (born 1980-1994) say unflattering things about each other. But how many of these money myths are true? In this post, we will look at what they say and try to separate financial fact from fiction. And, hopefully, we can have some fun doing it.

THINGS BOOMERS SAY THAT DRIVES MILLENNIALS CRAZY—

To get an idea about what Boomer’s complaints are, I reviewed a variety of media sources to make a list below. So, here they are, along with some of my own reactions:

1. Why do you millennials change jobs so much? If you are loyal to the company, they will be loyal to you.

Right. I think I just saw a pig fly by my window.

I have to side with millennials on this one. Yes, millennials change jobs a lot, but arguably no more than any other group. And, in general, employees must look out for themselves.

And Boomers who complain should know better. If you read the last post, you know that once Boomers hit age 50, some employers put targets on their backs.

2. Millennials get paid more than we Boomers ever did. So, why all the whining?

Millennials are the most educated generation in history. But that does not mean they are the best paid. They are paid 20 percent less than Boomers were. Read about it here.

3. What is wrong with millennials? I mean, why should I (a Boomer) go through the hassle of changing my cable TV plan? I NEED a landline and cable TV. It is what I am used to.

Ok, maybe this only happens in my house. Anytime the subject comes up; my millennial children roll their eyes so much that it looks like they are having some kind of medical emergency.

My kids have been urging me to change, and next month I am (finally) cutting the cord and saving about 30%. Of course, I will then be asking them to hold my hand and navigate me through the process. After all, I am the master of the 1990’s technology.

I really hate it when they are right.

4. If you millennials work hard, everything will work out on the job

This is another ‘trust your employer’ attitude from a bygone era. Boomers, are you kidding?

Yes, you should work hard. But be your own advocate at work.

5. Millennials should buy houses—it is a good investment.

Well, yes, but there is a catch. Getting a down payment together is tougher than finding a cheap Kopi Luwak latte.

Millennials have a hard time saving a down payment in this inflated housing market. After all, saving the standard 20% of the purchase price can mean $50,000-100,000 in many places. In high-cost cities like San Francisco and New York, the median real estate sale price is well north of $1,000,000, and it takes $200,000-$300,000+ down for the purchase of a starter property.

6. Millennials spend their money on frivolous stuff like designer lattes and avocado toast.

Yes, everyone knows a millennial that just fritters money away.

However, millennials actually spend LESS than other generations in several categories like clothing, entertainment, and alcohol.

7. Millennials are lazy and don’t think ahead about life’s challenges.

Well, there are some lazy millennials, but they are not typical. Of course, there are exceptions. For instance, the millennial cashier at the drug store sometimes resents me for interrupting her texting when I want to make a purchase.

Sigh.

And, there are plenty of Boomers glued to the couch who could get out and work too. Some pretend that watching reality TV is the cultural equivalent of reading Hamlet.  

But most millennials are not lazy; they just have different values and priorities. Read here about how they DO spend extra time. Their behavior does NOT mirror what Boomers do but may yield more in the long run.

8. Millennials don’t save any money.

There is a lot of evidence that millennials are better with money than Boomers were at a similar age. However, there is a caution. As a nation, we all stink at saving. You can read about that here.

THINGS THAT MILLENNIALS SAY THAT DRIVE BOOMERS NUTS

And now for the rebuttal. Millennials say a lot of stuff that Boomers hate too.

1. The costs of small luxuries like designer coffee and avocado toast just don’t count.

C’mon. Every penny counts.

For instance, let’s suppose the cost of your coffee is $5 (hah! you should be so lucky). If you have one per day, that is a cost of nearly $2,000 per year. That can go a long way at Ikea.

2. Experiences are more important than things.

I agree. Experiences cannot be taken from you, but money and possessions can.

However, there has to be a balance. For instance, it is also essential to consider the future and save for it.

3. My student loan debt is the reason I can’t save money.

You can almost hear the Boomers snickering. Except, millennials are right on this one. The average student loan debt is $31,172.

But, for some millennials, it is far worse. Let’s consider a real-life example. One millennial medical student I know gets a cheery email from his student loan provider every day about his running loan balance, which is in the high six figures.

The Millennial generation has too much student debt, and it is a problem. See here.

4. I can’t afford anything because of student loans (but my credit card bills don’t count).

Really millennials? This kind of logic is a little like trying to learn math but deliberately leaving out subtraction.

Credit card debt is actually a WORSE problem than student loans. The card interest rate is far higher. And some millennials have high credit card AND student debt, which is a lethal combination. Read about it here.

5. Technology saves money. So why are Boomers so clueless about it?

Well, millennials have a point, but it is not entirely fair. It is true that many Boomers are not tech-savvy. But many older Boomers did not grow up with tech. They are the technological equivalent of non-native speakers. So, don’t expect them to speak in complete sentences.

That is their excuse, and they are sticking to it.

As a result, they may not know that you can compare prices online, or that some phone apps pay you and can even help you invest money.

So, if you are a millennial and reading this, please be patient with Boomers and help them use technology. Help them save money.

Just don’t expect them to share the savings with you.

6. I (a millennial) don’t trust the stock market. I put nearly all my cash into a high yielding savings account.

This is a rookie investing mistake. Unfortunately, it seems to be more common than it should be among millennials. To build wealth typically requires a balance of investments, including long-range investments in the market.

The good news: millennials seem to be gradually transitioning into a more balanced investing approach. They cannot transition fast enough.

7. Social media fame is more important than money.

Ummm, no. Well, maybe.

There are two issues: 1) fame is not money and won’t pay the bills, and 2) social media can give an effortless impression, when in fact, it is often some of the toughest and most demanding work imaginable. And translating that work into money can be very difficult.

To Boomers, making dim-witted YouTube videos and posting them just doesn’t seem like real work. But, in general,  Boomers are wrong to dismiss social media.

After all, who can argue with media titans like the Kardashian clan? They are living proof that social media fame can be converted into money.

For example, Kylie Jenner recently became a billionaire at age 21.

It would be nice to pretend that she never earned it and is the product of popularity generated by throngs of social media know-nothings–but forget it. She worked extremely hard, earned it, and is a first-rate businesswoman who has worked tirelessly to develop and promote her cosmetic line.

Of course, it did not hurt that she had money, to begin with.

And yes, many Boomers are jealous of the fortunes some Millennials are making. And yes, even envious of Generation Z, like Kylie Jenner is.

Personally, I would not turn down a loan from her.

CONCLUSIONS ABOUT MONEY MYTHS

There are a lot of money myths out there. And very few of them help the generations understand each other.

That is a shame. When you think about it, the different generations have a lot to learn from each other. I find that my kids are teaching me about the use of money and technology all the time. And, I hope that after reading parts of MMH that they have learned a lot about underlying patterns of behavior that lead to financial success.

So in my family, we tend to cooperate.

I will be talking a lot about this in future posts. For instance, what are the do’s and don’ts if you run the Bank of Mom and Dad? How do you share financial information between generations? Finally, there will be a dual installment of how parents and their kids can combine forces to fund a home purchase. We will explain how we used those techniques to buy a house for one of our kids in one of the most expensive places in the US–San Francisco.

Postscript: I have no idea why my spell check capitalizes Boomers, but not millennials.

Disclaimer: consult with a financial professional before taking any steps outlined here. Not all advice may be suitable for your circumstances or investment style.

Photo credit: M. Metshin: Talking on iCups with Grandpa.

Photo license here. : No changes made.

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