Why Millennials Are Not Leaving Home

ThincSocial.com

 

Mortgage rates are down slightly again, but first time home buying has slowed down and even dipped. In 2015 the percentage of first time home buyers was at 32%. Contrary to the expectation, the reality is that recent grads and others in the younger portion of the Millennial group have more expenses than other generations.

  • Gas
  • Food
  • Going out
  • Rent
  • Student Loans
  • Car Loans
  • Insurance
  • Retirement

I could rattle off a few more but for now these will do. So lets pick out and explain a few:

Going out: This may seem like an easy one to cut out if your an older generation, but the truth is we like to have fun. Going out makes us forget the rest of the bullshit on this list so no we wont get rid of this one. Now, we might limit how much we go out in a week or month, but not going out at all is not an option when clipping expenses.

Student Loans: This one will keep us from buying homes and living at home the most drastically. The range for some loan balance a month is between $200 and $1,000. That additional expense should be a mortgage payment, and now it is not. The amount on average borrowed for a 4 year education is $30,000, or a good-sized down payment.

SONY DSC
 Source: Unspalsh.com

Insurance: The rising costs of insurance (Medical, Car, etc) is not cheap anymore. In 2015 the average cost for Millennials insurance was $486 a month. Insurance is not wanted but needed, and many of us see it as unnecessary, especially because we can stick to our parents plan until we’re 26.

Retirement: For older generations this might be the saddest reality for the younger generations knowing the fact that 80% of Millennials do not invest. Investing can be anything, but in this case it’s stocks, which are a basic form of investing when you do not know how bonds, annuities, 401k, ROTH or Traditional IRA’s work.

Photo Courtesy: Reuters/Lucy Nicholson

In turn, all these things add up. And if you look at this list of common Millennial expense, the fact that workplace wage increases have been happening do not really help. You can increase the amount of money you pay someone, but it does not matter when their list of expenses grows higher than your increase. One thing that some bigger companies how incorporated into their pay packages (Like having an automatic 401k option) is paying off their workers student loan debt.

Still, living at home seems like a good option and the housing market will continue to slow down if some of these things are not looked at. No one cares or looks at “Net Worth”, or considers the impact of owning a house with tax benefits and and tying it to retirement.

 

For more follow @ThincSocial and go to ThincSocial.com

 

Cover photo: Startup Stock Photos

 

Advertisements

Why Free College Is A Dumb Idea

 

gluten-free-in-college
Photo: http://urbantastebuds.wpengine.netdna-cdn.com

                There are few things hotter in the mind of Millennial’s and the generation under us than free college. It is being talked about on the campaign trail and is being spoken of nationally as a debate raging on with the youth on one side and the older generations representatives on the other. It all stems from good reason: The student loan debt bubble that has formed. The younger generations either going to be, currently in, or have gone to college within the last lets say 10 years are in the bubble with an enormous amount of debt, so much that the cost of living rising and wages not growing enough across the board to keep up with both has brought us to the issue of free college.

college-debt
Photo: cbsnews.com

Although I am part of this issue very much as anyone else in my generation of Millennial’s, I see the issue from both sides. Some of the arguments for free college are not feasible, which is what many of my peers fail to see. Another part is it is easy to say if you want to go to college you acknowledge the debt you will accumulate, or don’t go at all which is what older generations are saying really is not a great argument either.

Why it is a great idea; The argument for free college:

  1. Minimizing debt and shrinking it (You cannot eliminate it) would definitely help down the line. Older generations will not understand because they have made money through ups and downs of job and market volatility yet have started careers after attending colleges and university’s for pennies compared to todays costs.
  2. More people will go if the costs are lowered and that will lead to more leaders and innovation that come from post secondary education.
  3. The least the government could do is give interest free loans. The same consequences for default, just no profiting off kids who are in school.

Why free college is a dumb idea:

  1. Just because college is tuition free does not mean that the school cannot increase your fees. It is endless cycle if that happens because then if tuition is free and the protest get what they want, the school can raise the fees very easily and then there will be protests about that.
  2. Most students going to school today do not understand how economics and socioeconomics works. If you are in a Bachelor’s Degree program for art history or criminal justice you are not taught for the most part how certain things affect other when you give and take, just because the fact that’s not what your program involves. So to someone going to school free college sounds great, but they fail to realize the outcome is not feasible. Someone has to pay for the free college because states get “X” amount of money from the tuition paid, where would that money come from afterward?

These are the factors of the debate that is pressing this issue so much. As much as I am for free college, it just doesn’t work like that. I am a finance student and I can tell you from what I have learned in the classroom, to read from the experts this is not a possible long term solution.

My suggestion is to start with the loans by having them carry zero percent interest rates. After that a more sizable solution would be either no fees for out of state tuition at state schools, or tuition free community colleges.

Why Technology Might Be The Saving Grace For Millennials When It Comes To Debt

Lifestyle/Personal Finance:

Photo Courtesy: www.apptentive.com

          Technology is changing so quickly today. Which could be an advantage for Millennials. After all, this is the generation that brought Baby Boomers and Generation X’ers Facebook. Now its up to the Millennials to figure out how to use their technological advances to their advantage. And that means making money.

When it comes to debt Millennials have to worry about their education undertaking more than anything. Going to school has never cost so much as it does today. As I mentioned in a previous post of Why College Today Is Like a Country Club, the cost to attend college and gain new perspectives and basic knowledge of the newest tech being released is considered astronomical today than it was even 10 years ago.

Technology today including developing of apps, new websites, interactive products like Amazons Fire Tablet or iPads, social media content is all in the hands of Millennials and the development is a dog fight for getting these things finished and out the quickest.

Now when it comes to making money Millennials need to steer these new products and advances toward figuring out their debt. Paying off debt is on just about every Millennials mind who is in college currently or already graduated. A Forbes article relayed how much Millennials think about their debt when they showcased how about 30% of Millennials surveyed said they would sell an organ to pay off debt.

That is extreme, which is why I am saying we need to harness this power of technology and use it to our advantage. The bubble of student loan debt could burst sooner rather than later and debt needs to be reconfigured to seem more

Photo Courtesy: truthdig.com

manageable. Something’s got to give which is when a tipping point could be seen. How will Millennials use tech to their advantage when it comes to making money? Maybe something like the San Francisco Chronicle’s article about companies agreeing to pay off their employees debt (In one instance mentioned in the article) for about 6 years that they are with the company.

The SFC article is on to something. Tech companies and tech start ups should start offering such programs. This will almost all but guarantee top talent if you agree to sign on to something like that. Company-wise it makes sense too. In the instance of paying off employee debt for 6 years will this will create longer term employees. It is a win-win. If Millennials ask for it they receive it.

Thincsocial.com

Photos: http://www.truthdig.com/images/cartoonuploads/cbe0603cd-college-debt-500.jpg

http://www.apptentive.com/blog/wp-content/uploads/2015/05/millennials-stock.jpg