Millennials aren't screwed.
Let me explain what I mean.
I'm a Millennial. I work for myself. I had a desk job for 10 years and I made a lot of stupid financial decisions.
I hear on the news all the time, "Millennials are screwed. We're screwed! We're never going to be able to get a house. We can't get ahead in life. We can hardly have kids."
We're not totally screwed. You're only screwed if you decide not to wake up and change your behavior. You have to start understanding our financial systems to work them to your benefit.
Let me take you on the typical millennial journey. I did almost all of these things myself.
Debt 1: Student Loans
You go to college at 18 years old. You sign a bunch of student loan papers and for the next four years, you're getting into deep student loan debt. Your total amount of student loan debt is a mystery to you at this point.
They don't tell you that interest accrues on those loans from the moment you take them out. The clock started ticking on day one.
Debt 2: Credit Card
At some point in college or right afterward, you get a credit card, because someone told you that you need to build up your credit. So, alright, great, you apply for a credit card and only spend money on necessities.
Or not.
That credit card feels a little bit like free money and you really want beer and other stuff on the weekends, so you put a little on your credit card at a time. You vow, "I will pay it later. Don't worry, when I get a job, I'm going to pay this thing off."
See how that grew?
So then you graduate from college, you have a little bit of credit card debt, and you have a bunch of student loans. You don't know how much student loan debt you have until later, because the payments aren't due yet. The debt doesn't quite register yet.
Debt 3: A Car
Most people get some sort of job within a few months of graduating college.
You're flying high at this point.
You got a job, but to get to that job you need a car, so what do you do? You call your parents, "What do I do? How do I get a car?" Your parents take you down to the car dealership and you sign on that insidious dotted line.
BAM. Car loan secured.
Now, you see, your student loans haven't come due yet. You're not paying on them yet, so you don't know how deep your hole is at this moment in time.
You've signed on the dotted line. You now have a car payment. You have a bunch of car debt and, within a couple of months, your student loan payments come due.
So now you're working your first job out of college making terrible money, you have a hefty student loan payment coming due, you have a car payment, and you have credit card debt.
That's how that works. That's how it worked for me and for many Millennials.
You're going on with your life and you're thinking, "Oh man, I'm screwed! Oh, I don't know what I'm gonna do! I'm making terrible money. They're taking advantage of me! What do I do??"
Debt 4: More Student Loan Debt
A lot of people saw a bleak future at this point and decided to get an Advanced Degree.
They put their student loans on deferment and thought, "If I get this higher degree, I'm gonna be able to pay all of my debt off faster."
So, okay, they go in and, before they know it, within a couple of years, they have this advanced degree and over a hundred thousand dollars of student loan debt.
Interest from the undergrad student loans kept compiling while additional loans were being taken out. The student loan debt is massive at this point.
Maybe this isn't you. Maybe the next debt is yours instead.
Debt 5: Personal Loan
Eventually, this Millennial meets someone. They decide they want to get married and so they do. They take out a little personal loan to pay for the wedding and before they know it, they have hundreds of thousands of dollars of debt and no assets to their names.
Maybe you don't have over $100,000 in total unsecured debt. Maybe you do. Let's keep going with this typical Millennial story.
You've barely had a job, but you have this advanced degree, so you think, "Okay, great, well I've done everything right. I've done what people told me to do, so now I'm going to get this great job and I'm going to be able to maintain my payments."
The bar is lower. A few years ago, you thought you'd pay off your loans quickly. Now you're just aiming to survive with the payments. You're settling for mediocre at this point.
Debt 6: Living Well
I hear this all the time. This is nothing new.
You and your new spouse have a ton of debt at this point, but you have these new jobs with your advanced degrees. They're not great jobs, but you're staying current on your minimum payments.
But now you start wanting stuff. You've had the same couch for years and your living space is not how you envisioned living.
You want to have children. You're getting a little older now. You realize, "Okay, well, daycare costs a lot of money, too. So how do I afford this? What do I do?"
So you start climbing that career ladder thinking, "Okay, I'm just going to keep doing what people told me to do. This worked out for them. It's going to work out for me. It's going to be fine."
You get a promotion or two and decide to celebrate, but the celebration doesn't stop at just one night out. You think, "I'm successful now. I should act like I'm successful." So you get a better car. You trade that old thing in.
You start eating out a little bit more. "Everybody else is paying $12 for a salad at lunch, so I'm going to do the same thing as them."
And you start spending a lot more money than you have. You dig yourself deeper and deeper and deeper into credit card debt, into other debt.
You're on an income-based repayment plan for your student loans and you don't realize those are interest-only or even below what your interest payments should be, so those student loans start growing and growing and you're now in your 30s.
You don't know what to do anymore.
You're growing out of your house. You've had your first child. You're barely making those daycare payments and what do you do?
Turn Around
Millennials are not screwed. You're not screwed!
Yeah, you've been given a crap hand. You have a lot of debt to your name. You're not starting from the same place as your parents, but you're acting like your parents did when they were 25 years into their career. You can't do that, so let's pull back.
Understand that you've been walking down Spender Street spending money that you don't have yet to have a lifestyle you thought you deserved.
That's not how to win in this life. That's not how these financial systems work. The systems in the United States are built to take advantage of you. Let me say that again. The systems in the United States - these financial systems - are set up to take advantage of you.
You might be the smartest person in the room. You might be the smartest person in your company, in your team, but the credit card companies and banks hire the smartest people in the WORLD and they are built to take advantage of you. You have been had.
So turn around.
Let's walk right back down Spender Street and start walking down Saver Street.
There are some long-term financial frameworks, some financial pillars, that will get you out of debt and will get you to a place where you don't have student loan debt anymore, you don't have credit card payments anymore, you don't have to pay all this interest, this interest on whatever you bought along the way.
All of that interest is your retirement. What you should be saving for retirement is funding a CEO's bonus check. Stop funding their second, third, fourth home! Stop funding Jeff Bezos and start funding your retirement.
So turn around.
Take a step away from what you're doing, take a step away from the grind, and really look at your life. Look at what you're doing. Realize that you have been trading away your security, your financial security, for the momentary pleasure of a $12 salad.
No, it's not that simple.
Yeah, I know. I can hear you. It's not that simple.
It is a lot more complicated, so come talk to me. Let's get this done. Let's figure it out. Let's get you out of debt. Let's get you into a life of financial security. I've done it hundreds of times over. I've done it with lots of people. I've done it myself! We don't even have a mortgage payment anymore. You can do this, too. You can get there.
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