5 Unique Financial Problems Facing Christian Millennials Today.
Estimated reading time: 10 minutes
There are 5 unique financial problems facing Christian millennials today. They include high education loans, lack of debt management, fewer job availability, increased real estate and rent prices, and lower savings than the other generations. According to the Washington Post, millennials are the unluckiest generation. (ouch). After accounting for the present crisis, the average millennial has experienced slower economic growth since entering the workforce than any other generation in U.S. history.
Table of Contents
- Higher education loans.
- Debt management
- Fewer job availability
- Increased real estate and rent prices.
- Low savings
- How to avoid the financial problems facing Christian millennials.
- Conclusion.
Millennials will bear these economic scars the rest of their lives, as lower earnings, lower wealth, and delayed milestones, such as homeownership. And again, the looming recession and the pandemic, it does not make things any easier. Of course, there is always hope, but I figured we might as well expound on the 5 problems and then offer practical solutions. Let’s get into the financial problems Christian millennials are facing today.
Higher education loans.
The rise in tuition costs has led to most millennials opting out of college. As if that’s not enough, the stagnant wages make education seem less workable. But why is that? After the Great Recession, there was an influx in prices with college fees more than doubling in the last 15 years. Part of this rise is because of an increase in college attendance with many millennials considering getting higher education.
According to New America, since student loans are often repaid over extended periods of time—as much as 30 years—the theory is that these debts can be managed along with other financial obligations. This means that some debt borrowed years ago still contributes to the cumulative numbers today. Unfortunately, for a growing number of borrowers, student debt consumes a larger share of income for years on end. The burden of student debt has become a source of widespread generational anxiety. No wonder the student loan forgiveness promise.
Unemployment for 18- to 35-year-olds hit 13 percent at the height of the recession in 2010, a time when many Millennials were high school. Due to such poor labor market conditions, college enrollment spiked as many enrolled in college though they hadn’t planned to originally. Others who were already working lost their jobs and enrolled in an effort to reskill and increase their chances of better employment once the economy recovered. And while public institutions—making up for the difference in state appropriations through higher tuition charges to students—absorbed most of the increase, the for-profit sector more than doubled its undergraduate enrollment within six years. (Excerpt taken from New America)
Debt management
Lack of debt management is another financial problem facing Christian millennials today. The average millennial has more than $100k in debt. The most kind of debt is credit card debt with more than 67% of millennials owing money to the credit card company. The reason for this could be a lack of employment. And because of this, they opt for freelance opportunities, commonly known as the gig economy. Unfortunately, these opportunities do not offer benefits like health insurance and retirement plans. And without health insurance, it means that you will need to cover your medical expenses, which can be costly. Medical bills cause one to use up savings, borrow more, and being unable to pay for necessities, which leads to other lifestyle diseases, and the cycle continues.
Another problem that come with the rise in debt is mental health problems with mental health problems being one of the biggest culprits in the world.
Fewer job availability
Whenever there is a recession, companies tend to lay off employees so as to cut down expenses because of the slow demand of their products. Covid also affected economic growth with companies shutting down and others downsizing in an effort to stay afloat. This has led to fewer job availability, leading to a rise in unemployment.
- World youth unemployment rate for 2021 was 17.93%, a 0.67% increase from 2020.
- The world youth unemployment rate for 2020 was 17.26%, a 1.92% increase from 2019.
- World youth unemployment rate for 2019 was 15.34%, a 0.11% decline from 2018.
- The world youth unemployment rate for 2018 was 15.44%, a 0.08% decline from 2017. ( Increased real estate and rent prices.
The pandemic led to extraordinary growth in the value of homes. Because of lockdowns people migrated to the suburbs and this pushed the prices higher because of an influx in demand.
The supply chain was also affected, which led to an increase in the prices of some of the building materials. Lumber, iron, and steel saw more than a 70% increase which pushed the cost of building upward. Rent prices have also gone upward with both Other economic factors like a rise of interest rates play a major role in the increase of prices.
Low savings
Millenials are saving less compared to the generation before them at their age. One reason could be because of the low disposable income the millennials have compared to Generation X at their age. And with the rise in the cost of living, the millennials find it difficult to save. The endemic is also another driving factor where most millennials (50% +) are stuck with the idea that they will save when things go back to normal.
Unfortunately, this mentality is the reason most millennials have large amounts of debt. This happens because, in the event of an emergency, they will resort to borrowing to solve their problem. A take now pay later mentality coupled with the Yolo culture. Don’t get me wrong, it is imperative to live in the moment. But if all you do is spend what you have and never save, how will you ever grow? Easy access to credit cards has also led to a reduction in saving for millennials. After all, they have easy access to financing, should they need it. Inflation and other economic crisis have also led to a decline in the saving culture among the millennials. Most of them not seeing the point of saving due to the lower value of paper money because of inflation.
How to avoid the financial problems facing Christian millennials.
Manage your student debt.
Managing your student debt is the first step to overcoming the financial problems Christian Millennials are facing. And this can be done by.
- Sticking to a budget. When you know both your income and expenses, you will easily factor in debt payment. A budget will always give you structure and help you avoid overspending. You will also learn to meet your obligations when you have an awareness of your finances.
- Pay more than the monthly bill. This helps you lower your principal, as you find you will pay more than just the interest. And another thing that you can do is pay off your debt right away instead of waiting for the grace period to lapse. To ensure that you can pay more than the monthly bill, you could consider cutting back on expenses and finding cheaper alternatives for your wants. Instead of hanging out with your friends at restaurants and local bars, why not consider picnics and hikes? Find cost-friendly fun activities and use that extra to pay off your monthly bill.
- Research the right payment plan for you and also use any windfall to pay off your student loan. Examples of student repayment plans include standard repayment plans, graduated repayment plans, extended repayment plans, and pay-as-you-earn repayment plans. Research thoroughly or speak to a financial advisor and find the one that works for you.
Manage your debts
Since this is yet another financial problem faced by millennials. The goal is to overcome it. And one way you can overcome debt is by having a budget. As long as you have a budget and are sticking to it you will rarely overspend. The other way is to ensure that you look for ways to consolidate your loan. This is especially helpful if you have multiple high-interest loans. You can take a loan with lower interest to pay off those with higher interest. The goal is to have one cheque that you will use to pay off the other debts. However, this is always not effective. You need to check with your financial advisor to see if this works for you.
You could also consider having a debt reduction strategy. Again, you can decide to use the snowball strategy. This method focuses on paying the smallest loans first. The benefit of this is that it helps build momentum and keep you going. The other strategy is the debt avalanche method. This method focuses on paying the loans with high interest first. The benefit of this method is that it saves you more money in the long run. Using any windfall that comes your way is also another great idea for debt management. Cutting back on costs and not taking more debt is beneficial too. To learn more about debt repayment, check out my blog on a Complete Guide to debt repayment.
Fewer job availability
Since this is a global thing, you could consider upskilling without taking on more debt. With the rise of online courses, you can upskill at a lower fee compared to getting a university degree. Sites like Coursera, Udemy, and Udacity offer relevant training for a lower fee.
The goal is to ensure that you get the in-demand skills. Don’t go for the traditional courses. What jobs are on demand now and what jobs will be in the future? As you upskill, consider taking courses that are tech-oriented since that is the future. You could also consider turning your hobby into an opportunity. YouTube and Instagram have helped more people achieve financial freedom.
What skill can you teach others? What is your passion? To learn more about this, check out my blog on ways God can help you achieve financial freedom. Don’t despise what you have. After all, God uses the foolish things of the world to shame the wise. Who knows, your hobby and passion could be the very thing God uses to help you achieve financial freedom.
Develop a saving culture.
Developing a saving culture will help you avoid the financial problems affecting millennials today. And some of the tips that will help you establish a saving culture is:
- Creating a financial goal. Creating a financial goal will help you stay ahead of your finances and avoid overspending when you have an excess of funds. Maybe you have a goal of setting up an emergency fund which, by the way, should be one of your financial goals. Having calculated the amount you need to save up will help you cut back on expenses to achieve it. The beauty of having an emergency fund is that you will have something to cushion you in the event of an emergency.
- Be disciplined. Ensure that you remain determined to achieve your financial goals. It will not always be convenient for you to save, but as long as you focus on your goal, you will achieve it. You might need to cut back on expenses and live frugally for a period. Whatever it takes, do it.
- Have a retirement plan. Again, getting old is a guarantee. So, the best thing you can do is to have a retirement plan. You could consider low-risk investments like ETFs or index funds. Ensure, however, that you invest in return-yielding investments. And again, don’t forget to factor in risk. Since this requires a deeper dive into your finances, consider hiring a financial advisor and planner to help you with that. A generalized blog will only give you an idea, but not the specifics on what you should do.
- Consider inflation-proof investments like TIPS. Treasury Inflation-Protected Securities (TIPS). These securities adjust the interest payouts you get based on changes in the CPI. The principal payment you get back will also be adjusted for inflation. Even if prices go down over the investment period, you will still get back the original principal if you purchased the security when it was first issued. You can also consider government bonds if you have a smaller savings amount. Check out this blog on a complete guide to savings for Christian millennials to learn more.
Conclusion.
Although the state of the world is that there are financial problems, you can overcome the problems. Avoiding these financial problems will help you live a happier and healthier life. And not only that, it will be easier for you to leave an inheritance to your grandchildren. It is time for you to change your narrative. Change your money mindset and avoid financial distress in the future.
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Radiantly Resurging
Mercy is the author and founder of radiantly resurging. She is a Christian and having gone through the wilderness season, she decided to impart the knowledge learned to help others navigate their wilderness season too
