You may have heard someone over 50 say something like, "Millennials are extravagant and irresponsible.

"They can't save up for anything "because they spend all their money on iPhone apps and avocado toast."

(host 2) And then, of course, a millennial will respond with, "It's not our fault we can't save anything.

You boomers left us a broken economic system."

(host 1) It seems like this generational boxing match heats up more and more every day with both sides saying the other just doesn't get it.

So who's right?

[bright music] One thing's for sure.

America's relationship with money has changed a lot in the last several decades.

When baby boomers were young adults, it was possible to support a family and buy a house on one income without a college degree.

Today, that sounds about as realistic as a comeback by Blockbuster Video.

There are many reasons for this, but mainly it's that the cost of living has been increasing over the last few decades much faster than wages can keep up.

This is especially true of three major expenses: housing, health care, and education.

And you can see the result of that inflation in many generational trends.

(host 2) The percentage of millennials who own homes is around eight points lower than it was for Gen Xers and baby boomers at the same age.

Millennials tend to value city life over suburbia more than previous generations, so it makes sense that they're more likely to be renters.

But it's wrong to assume that they don't recognize the importance of homeownership.

Most millennials say they want to own a home someday.

It's just that they have to wait longer to do it.

The median home price now outweighs the median income by so much that in many places, it can take ten years or more to save up enough for a down payment.

We're just now starting to see millennial homeownership rise as people in their 30s have finally saved enough money and paid off enough debt to think about settling down.

But less than a third managed to put down the recommended 20%, meaning higher mortgage payments and longer loan terms.

Almost half of millennial homeowners express some kind of buyer's remorse, much more than previous generations, because the costs, including interest, taxes, and maintenance turned out to be higher than they were expecting.

(host 2) Thanks to a changing labor market and a rise in freelance work, the percentage of Americans who rely on employer-based health care has gone from around 84% in 1980 to around 58% today.

Unfortunately for millennials, who now make up the largest segment of the workforce, that coincides with an epic increase in medical costs.

This has forced millennials to be frugal consumers when it comes to health care services.

They're more likely to research costs and compare reviews of providers online, and they're more willing to use telemedicine and walk-in clinics as cheaper alternatives to visiting a hospital.

They're also more likely to forego health insurance altogether, which, as we covered in a previous video, is not recommended.

Seriously, check it out.

(host 2) And then there's the big dark cloud hanging over so many members of this generation: student debt.

Tuition has skyrocketed in the last 30 years, and combined with a competitive job market, many young people felt they had no choice but to take out huge college loans in the hope that someday, someday, they'd earn enough to pay them back.

According to a 2017 survey, 63% of millennials reported having over $10,000 in student debt, and more than one-third had over $30,000.

Older millennials in their mid-to-late-30s had the double misfortune of graduating just as the Great Recession of 2008 was starting, which led to essentially a lost decade of low wages and accumulating debt.

This burden pressured many to delay big life milestones like getting married, having kids, or buying a house.

Today, one in five millennials expects to die without ever getting out of debt.

So yeah, there's no doubt that millennials face some unique historical challenges to achieving the same level of financial health as older generations.

However, there are some tendencies of this age group that aren't making things any easier for them.

For one thing, it is true that millennials love to go out.

For the first time in history, Americans spend more money on bars and restaurants than on groceries.

The average millennial eats out five times a week.

Almost half spend more money at bars and restaurants than they put into savings accounts.

Over one-quarter spend more on coffee than they save.

Millennials also tend to value experiences over things, meaning they'd rather spend their money on interesting food, travel, and music than cars, houses, and are less willing to work the same job for a lifetime.

Some people attribute this to social-media-induced FOMO that drives young people to stockpile shareable memories like currency, while others would say it's a more spiritual reaction to an overly materialistic society.

Whatever the cause, it tempts millennials away from prioritizing long-term investments like IRAs and homeownership.

But if there is a solid criticism to be made of millennials, it's this.

Even though they are generally more educated than previous generations, they have the lowest level of financial education.

In a study by George Washington University, less than a quarter of millennials could demonstrate basic financial literacy, including economic concepts like compound interest, inflation, and risk diversification.

Only 8% demonstrated high financial literacy.

What's more, they're not asking for help.

Only 27% had ever sought professional advice for saving and investment, and only 12% for debt management.

This might explain why millennials are more likely to make illogical financial decisions like racking up debt on a high-interest credit card while trying to pay off a low-interest student loan.

Hello!

This is really all part of the larger economic shift.

Thirty years ago, employers essentially held workers' hands through their financial lives.

A decent job could last a lifetime and typically came with health care and a company pension.

Today, young workers are expected to figure it out all for themselves, and at no point did anyone think of actually teaching them how to do it.

So are millennials justified in their complaints?

For the most part, yes.

But justified or not, no one else is likely to help them out of this mess, so they're going to have to start educating themselves now.

(both) And that's our Two Cents.