This Week In Your Wallet: Millennials, Purpose And The Price Of “Sucking It Up”

The oldest Millennials will turn 38 this year, and they’re headed into middle age “in worse financial shape than every living generation ahead of them,” Janet Adamy and Paul Overberg write in this week’s Wall Street Journal. Millennials have less wealth, property, marriages and children than every other generation born since the Great Depression. (In case you missed it, the birth rate is the lowest it’s been in 32 years, thanks to Millennials, which leaves us with a projected Social Security deficit of $2 trillion over the next 75 years.)

So how bad is it — exactly? Millennial households have a net worth of around $92,000 — that’s 40% less than Gen X households had in 2001, adjusted for inflation. The majority of millennials — 62% — are living paycheck to paycheck, and only 38% feel financially stable, according to the Schwab 2019 Modern Wealth Index. Why? High student loan debt and disappearing manufacturing jobs haven’t helped, and have exacerbated the fact that many Millennials haven’t been able to buy homes or invest in the stock market. Although this all makes for a bitter pill, I’m encouraged by the bright spots in the economy — unemployment is the lowest it’s been in 50 years (3.6%), and hourly earnings are up by more than 3% from this time last year. In other words, there are opportunities for those who have fallen behind to get ahead. Also, employers are stepping up and doing more — Ford Motor Co. has expanded its financial planning services for all of its 80,000 U.S. employees, and many companies (including Zillow, Fidelity and Chegg, to name a few) are now offering student loan repayment programs as part of their employee benefits packages. Hopefully many more will follow suit in the years to come.

Just Suck It Up?

If you’re struggling, whether you’re a Millennial or not, chances are pretty good somewhere along the line someone has told you to do the above.  Or maybe you’ve given this advice to yourself: Just suck it up. Do the job you hate. Collect the paycheck. Bank the proceeds.

Turns out, there’s a price you can put on that kind of misery.  Maurie Backman of The Motley Fool found 41% of Americans would leave a position they enjoy to go do something they despise. Respondents said they’d need to make an average of $77,000 to perform said horrible jobs — $30,000 more than the $46,641 earned by the average American in 2018. But is financial flexibility really worth being miserable? Experts argue that if you’re miserable in your position, you probably won’t perform your best, and if that’s the case, you may well lose your position (and the paycheck that comes with it) in short order. With that said, working a job you loathe can impart some good life lessons about overcoming adversity and sticking things out when the going gets tough. Plus, it can be very tempting to spend a couple of years working with an I’m-just-going-to-keep-my-head-down-and-earn-as-much-as-I-possibly-can philosophy, particularly if you’re saving up for a home or other big life goal. If you’re currently navigating the waters of a toxic workplace, HerMoney has some helpful tips for how to do it successfully, and solutions for next steps if you find yourself unhappy at work.

Bright Spots

We may also want to reframe the sort of satisfaction we’re looking for in our jobs.  Chasing happiness — which is temporary — should not be an obligation, whereas purpose is more permanent, and that is what we should be going for, writes Amy Cuddy in this week’s Boston Globe. We’re often asked by friends and family if we’re “doing okay” or instructed to “cheer up,” but those are the wrong messages entirely, she explains. If we want our lives to have meaning, we shouldn’t look to continually experience life’s highs, rather we should find our reason to get up in the morning. Not inspired yet? Consider that people with a greater sense of purpose actually live longer, according to several studies that documented the effects of having purpose and mortality. Those who possessed a strong sense of meaning in life outlived their peers. They also performed better on cognitive tests, had better financial success and, yes, even better sex… In other words, the results are clear. Purpose is good. If you don’t feel like you have a reason for getting up and going every day, then I encourage you to spend some time thinking about that this week. What makes you tick? What inspires you to be the best person that you can be? If you’re having trouble finding it, I’ve found it helpful to think back to what got you going when you were 11 years old — before life got in the way. The answers may surprise you.

Securing Your Future

Have you given any thought to when you’ll file for Social Security benefits? You may have heard that the later you wait, the more money you’ll make (to the tune of about 8% per year) but you may have wondered if that’s really the right move for you. It can be very tempting to take your money as soon as it’s available, but some new data may dispel those notions — 38% of retirees wished they filed for Social Security benefits later in life, according to a new study by Mass Mutual. Most people who filed early — 53% — did so out of financial necessity, proving the dangers of not saving enough for retirement. Thankfully, it’s never too late to start saving, and put yourself in a position where you can let those Social Security benefits mature as long as you’re able.

P.S. New York-based folks, I’d love to have you join us for our next HerMoney happy hour on Tuesday, June 4, from 6:30 to 8:30 pm, at the M.M. LaFleur boutique at Bryant Park. We’ll be chatting about my new book, Women with Money, as well as all things spending, saving, investing, and living our best financial lives. You can RSVP here — hope to see you there!

Have a great week,

Jean