When I turned 27 last fall, one of the first things my baby boomer father said to me over the phone was something like, “27 … huh … that’s old.” He sounded surprised, as if he couldn’t believe that his youngest daughter was just a few years away from turning 30.
However, there was something else unspoken, too. I may be closer to 30 than to 20, but I’m nowhere near achieving the financial milestones my parents had attained when they were my age.
Sure, I have a college degree, a rented apartment and a good, well-paying job in the field of my choice. But ask me if I’m prepared for the big-ticket milestones that are supposedly typical at this stage in life — such as buying a first home, planning a wedding rather than a courthouse elopement, starting a family and saving enough for retirement — and I’ll avert my gaze. No, to tell you the truth, I have no idea how I’m going to pull all that off.
Millennials get criticized for this kind of thing all the time. In 2010, writer Robin Marantz Henig published a hotly debated article in the New York Times that began with the questions: “What is it about 20-somethings?” and “Why are so many people in their 20s taking so long to grow up?”
According to psychologist Jeffrey Jensen Arnett, who’s quoted in the article, young adults are going through a new stage of development called “emerging adulthood” that’s similar to adolescence. They’re not just putting off big financial milestones because they’re forced to, he says. They’re doing it so they can find themselves before they have to buckle down.
I remember reading that article in the middle of the day in my PJs, laid off from my poorly paid publishing job, with just enough money in my bank account to pay my utilities. That’s right, I remember thinking. We’re putting off these milestones because we want to, not because the last several years of economic hell have dealt recent grads a bad financial hand.
According to a recent poll by PNC Bank, the average 20-something is saddled with $45,000 in debt, including student loan, auto and credit card debt. And the older they get, the bigger their loan burden becomes. Part of that age-related debt increase may be due to at least some 20-somethings taking the plunge and signing up for a mortgage.
However, as more recent grads struggle to find and hold onto a decent paying job and keep up with interest payments that are just getting steeper with time, it’s no wonder that many of them are putting things off. When you’re so strapped for cash that you can’t even afford a trip out of town without saving for it, it doesn’t make sense to plunk down a down payment on a house or a wedding venue that costs more than a semester of college.
“Twenty-somethings are challenged with a balancing act between saving for the future and paying down their debt,” said PNC executive Shannon Johnson in a press release accompanying the poll.
No kidding. As for me, I recently started a savings account I dubbed “the future fund” with the hope that maybe, just maybe, I’ll be able to afford at least one or two of those big financial milestones — such as starting a family — before I hit 35. Or maybe 40.