I’m 27 years old. I was born in 1985, and I am part of this generation called the millenials. Millennials are known for being technology-savvy, relational and above all, striving to be different than the generations before them, particularly their parents. I’ll admit, I’m part of that generation and I definitely have all of those traits.
One of the ways that the millennials differ from the previous generation is that we are more willing to take some financial risks that our parents won’t take, especially in the economy that we’re struggling through right now. We are more willing to buy a more expensive hybrid car because we believe that things are going to get better. Optimism runs high, and risks become more frequent the more optimistic we are.
This behavior may be a little scary, especially for people who are waiting for the economy to down-spiral and crash entirely. People are waiting for another Great Depression to occur, and have called the economic climate we’re in right now the “Great Regression.” But… is it all bad? Is it necessarily a bad thing to have millennials taking risks and buying big ticket items?
Not necessarily. Millennials are fairly smart with their money, and if they aren’t in a position where they can take a risk without totally falling flat, then they don’t take a risk. The ones that do are actually helping the economy, as long as unforeseen circumstances don’t knock them and their payments off track.
I have a friend like this. He makes a ton of money being a graphic designer for a company. I’ve never even gotten close to making as much money as he does, and the risks he takes shows it. He upgrades his computer almost every 9-12 months (he built it, so he gets more RAM and other stuff). He has a really nice car. He pays a lot on his student loans with the intention of buying a home within the next 2 years.
Why does this happen? Partially, because of plastic. I’m on the older end of the millennial generation, so I’m still accustomed to carrying cash. But some of the younger millennials use plastic and carry absolutely no cash on them. I couldn’t even imagine doing that; I was always taught to have cash “in case of an emergency.” But, if you don’t have the physical dollars, you’re less likely to think about how much you’re spending. It doesn’t make you as nervous.
All of these factors play into the fact that Millennials are helping the economy in some way, shape, or form. They’re putting money in that hadn’t been there before. And this, in some way, helps the economy, either for the short or the long term.
What do you think? Will the Millennials help the economy, or will their reckless spending result in the same situation we’re in now in the future? Will they increase debt and hurt the economy more in the long run? Share some thoughts in the comments, have a great week, and we’ll see you here next week!