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Millennials have been bashed and criticized for their financial choices and most of the disconnected comes into play when older generations compare themselves to the new generation. However, it should be recognized that economic times have changed and the financial comfort enjoyed in the yesteryears is not what is being experienced in the current era and this may explain why the financial options for millennials are skewed and not in the best condition. With that in mind, here are 9 reasons why millennials battle to pay their bills.
They have no savings
Sadly, 34% of millennials have been documented as having absolutely no savings and this is a significant rise from the 28% who said so the previous year. This trend shows that more millennials are not saving which means they lack the financial capacity to sort out their bills when faced with increased commitments.
No jobs
One major reason why millennials are battling to pay their bills is the lack of jobs. Without jobs, it means there are no salaries to depend on which translates to debts since there is no money to spend. A dismal job market has been blamed for the lack of jobs and this means a huge percentage of the millennial generation actually have no jobs. With some people having very low uptake, the rates for underemployment and joblessness have gone through the roof meaning there is no financial muscle to depend on.
Reckless borrowing
It is perhaps the major fault of the millennials and it is a worry because it shows no signs of stopping. Reckless borrowing has been characterized as the reason why millennials battle to pay their bills since it means the individuals are already overly indebted and hence cannot afford to take on more expenses comfortably. With huge credit card bills and payday loans to service, millennials end up without financial security that allows them to save a coin to spend.
Low minimum wage
Millennials are living on low minimum wage which means they earn peanuts for the odd jobs. Low wages direct the fact that millennials can’t satisfy the basic and auxiliary needs at hand. Apart from earning a low minimum wage, the pay for millennials remains stagnant which means that they cannot improve their financial status over time. Low wage jobs are increasingly the only option left for millennials which eliminates their purchasing power.
High cost of living
Recession effects have never really been cushioned and this means that some individuals are still affected. With that in mind, the vulnerable generation stands as the millennials since they are the ones that had no jobs and it got worse when the economy failed to create more jobs. This translates to a high cost of living that impact negatively on millennials since they end up facing a battle to pay their bills.
No diversified income
One downfall that millennials have grappled with is the lack of diversified income. Without diversified income, earning potential is reduced which means millennials are automatically in a battle to pay the bills. Most millennials have no income generating activities apart from the select day job which means the avenue for income is singular which reduces the purchasing power consequently leaving the generation vulnerable when it comes to servicing bills.
Student loan repayments
Millennials have huge loans to service which means they are left with so little to spend that they can’t even take care of their own bills. Millennials face student loans, credit card bills and payday loans which means their financial muscle is massively cut off leaving them with nothing to spend on the rest of their bills and commitments.
Slowed economic growth
Plenty of the individuals seeking to understand why millennials struggle to pay their bills have failed to take into consideration the fact that a slowed economy has massively impacted the spending power. Slowed economic development has meant that products and services remain at the top end of the financial scale rigging out the millennials. In line with that, the purchasing power is massively reduced due to the slow growth rate of the wage setting directing the fact that millennials are left with no money to spend.
Disappearing jobs
As much as technology has revolutionized the workplace, it has also taken over the jobs that plenty of millennials would have taken up. The disappearing jobs have meant no income which means no bills are getting paid. This is a major catastrophe as it means technology will most likely render human labor irrelevant in the coming years. This will mean that more millennials will be pushed out of their jobs and those without jobs will have to contend with the struggle to pay their bills without a salary to depend on and this is the scary aftermath that we are looking at in the coming years.