George Kamel - 5 Things Keeping Millennials Broke

Episode Date: January 19, 2024

I recently came across an article from the Wall Street Journal about how millennials in their 30s are struggling financially. But why millennials? I mean, I know our Beanie Baby investments didn’t turn out like we had hoped, but are we really worse off than other generations? In today’s video, we’ll take a look at five things that are making millennials feel so broke right now, and what you can do about it if you’re one of these 30-somethings struggling with money. Links: Motion Sensor Toilet Night Light Order George Kamel’s new book, Breaking Free From Broke. EveryDollar budget deal: I love a good deal, and when you sign up using this link, I’ll hook you up with a 14-day free trial and $15 off your first year of the premium version of EveryDollar. Learn more about your ad choices. Visit megaphone.fm/adchoices

If you feel like you're on the struggle bus when it comes to money, you're not alone. A lot of people feel this way, especially millennials. Recently, I came across an article from the Wall Street Journal about how millennials in their 30s are struggling financially. According to the article, American millennials in their 30s have racked up debt at a historic clip since the pandemic. Their total balances hit more than $3.8 trillion in the fourth quarter, according to the Federal Reserve, a 27% jump from late 2019.

But why millennials? I mean, I know our Beanie Baby investments, didn't turn out like we had hoped. But are we really worse off than other generations? In today's video, we're going to take a look at five things that are making millennials feel so broke right now and what you can do about it if you're one of those 30-somethings struggling with money and with the fact that you're dangerously close to the age of Kevin's mom in Home Alone.

36. She was 36. Other than that, I'm in good shape. But first, hit that like button, subscribe to the channel, and share this video with all your millennial friends who had a pod collection and know what you're a good shape. what the internet sounds like. Yes, it has sounds. Nothing like the little buddy sound when your buddy left the chat of AIM. It was like, all right, that's it. Time to log off, baby. Don't be jealous that I've been chatting online with babes all day. All right, let's get to it.

One of the big things making millennials feel so broke right now is inflation. In case you haven't noticed, things do be expensive. In 2022, the annual inflation rate in the U.S. was 8% higher than the previous year, which is the biggest jump in decades. And according to a recent study, 80% of Americans say they are making sacrifices because of inflation. So this is something that a lot of people are feeling the pain of. But you might be feeling the crunch even more if you're in your 30s and you're making less than someone who may be further along in their career. Especially if you have a kid or two at home,

since child care costs can be higher than Willie Nelson on the good year blimp. And if you think 8% is quite the hike, wait until you hear the next thing making millennials broke. Home prices. Over the past decade, home prices have risen almost 50%. That means back in 20%. That means back in 2013 when you were blasting Avici through your headphones with cords and still getting used to the idea of Ben Affleck as Batman, the home that cost $200,000 back in 2013

probably costs around $400,000 today. So some people in their 30s might feel broke because they can't afford a house right now. But what's worse is that some millennials are actually broke because they bought a home they really couldn't afford, and they're struggling to make those mortgage payments. But why is this so bad for millennials in particular? Well, here's what the WSJ had to say about it. Many 30-somethings are trying to buy their first homes and have been squeezed by higher rates and home prices. The median price for an existing home was $359,000 in January, more than 90,000 higher compared with three years earlier.

In recent years, prices rose the most in lower-cost neighborhoods that are more likely to be in Millennials' budget range. So yeah, millennials might be feeling this one more than other age groups. I'm just a little shook up. That's all that is. Okay, the next thing on our list of what's making millennials feel broke actually is keeping. them broke, and that is credit card debt. And according to the Federal Reserve, eight and ten American adults have at least one credit card, and only 48% of them pay their bill in full every single month. And those are just the ones that we're honest. In fact, in 2023, outstanding credit card debt hit a record high of a trillion dollars. And the average credit card interest rate is now

around 22%, which is about as unhinged as Gary Bucy at an HOA meeting. Buttered sausage. It's not my gem. I don't buy you. I buy honey. And I kiss it on the lips. But is the problem actually worse for millennials? Here's what the article had to say. The average credit card balance for millennial borrowers was about 6750 in January, up 26% from three years earlier, according to credit score provider Vantage Score Solutions. Balances were little changed for JetX and fell between 11% and 15% for older generations. So for whatever reason, millennials do seem to be struggling more with paying off their high-interest credit card debt. And that's one more reason to stay away.

from credit cards. Cut them up. Cut it out. And speaking of debt, another thing making millennials broke is car payments. Total American auto loan debt is now $1.58 trillion. That has now surpassed student loans. That's insane. 37% of households in the U.S. have auto loans, and that amounts to over 45 million people. And the average amount per household is over $31,000. According to the Wall Street Journal, younger borrowers are falling behind on their car payments at higher rates than other age groups, according to the New York Fed. Auto delinquencies have been on the rise in part because car prices soared over the past few years. So what this means is millennials are buying new cars, they can't afford, and the payments are crushing them to the point where they can't afford the payment

anymore. One of the most significant bummers of my lifetime. This is a huge problem, and it's just another reason I tell people, buy a used car you can afford in cash and upgrade over time. Avoid paying interest on a depreciating asset, and you will build wealth so much faster. All right, the last thing on our list of things making millennials feel broke is student loans. According to the Fed, Americans in their 30s have a total of $504 billion in student loan debt, more than any other age group. And part of the problem is the cost of higher education. Between 1977 and 2023, college tuition and fees shot up about 1,400 percent.

For comparison, that's more than three and a half times the rate of inflation during that same time period. But another part of the problem is that student loans get labeled as good debt, and a lot of students seem to think it's their only option for getting an education and a high-paying job. But check this out. In 2022, a survey of more than 5,000 adults with student loan debt revealed a tragic state of stunted growth. Go with me here. 42% of young adults delayed paying off other loans because of their student loans. 14% delayed getting married because of student loans. 44% delayed saving for retirement because of these student loans.

33% delayed buying a home and often just live with their parents because of their student loan debt. 35% delayed travel because of student loans. And 16% delayed having a baby because of student loans. So if you ask me, anyone who still believes this is good debt needs a pulse check. All right, now that we've covered five things that are making millennials feel broke, what do we do about it? Well, let's look back at our list. Inflation, home prices, credit card debt, car payments, and student loans. Now, you might see that list and think,

well, there's nothing I can do about inflation and home prices, and you would be partially right. You can't control the prices, but you can control how you spend and when you make these purchases. You can switch to generic brands. You can change where you shop. You can eat out less. Have friends over instead of going out.

Cut the subscriptions you never use. And quit buying every item from the most recent BuzzFeed article called 20 Things You Can't Live Without. Although, I highly recommend the motion sensor toilet night light, game changer. Ooh, fancy. And when it comes to home prices, you can avoid getting yourself in hot water by waiting until you're out of debt with an emergency fund and a solid down payment. I've seen too many situations where the house becomes a burden instead of a blessing when people don't do it the right way. Now, let's talk about the other ones.

We got credit card debt, car payments, and student loans. Well, those are all forms of debt, and that is something that is in your control. Now, debt has become so normalized in our culture that those payments and interest might just seem like a part of life. It's just the price you pay to be an adult. But it doesn't have to be that way. You can choose to opt out of the system designed to make credit card companies and student loan companies and banks filthy rich.

So here's what you've got to do. Do something wild and drastic, like cut up your credit cards, close the accounts, and start paying with cash or a debit card. I did that a decade ago, and it totally changed the way I viewed my own money and how I built wealth.

Another thing you can do is save up and buy a reliable used car in cash. You can find great reliable cars out there that are $6,000, $8,000, $10,000 instead of financing a $40,000 vehicle that you absolutely needed for safety and reliability. I'll go put your seatbelt on? Nope. Safety last. Safety first. Next, choose a school you can afford.

Apply for scholarships and grants and pay for the rest with cash from an education savings account or working part-time. That may mean you delay school. That may mean you live at home for a while. It might mean you go to community college for two years and then transfer to that four-year school to finish your degree. But it's totally worth it to avoid student loans. Here's the deal. You can live a really good life without debt, and I'm living proof of that. Now, it's going to take a little more time. It's going to take more sacrifice, but it is so worth it to get out of debt once and for all and never look back. All of that sacrifice won't be easy, but it is worth

it to have financial peace. That's what this is all about. So what's it going to be? Are you going to let debt continue to rob you of your freedom and your wealth? Or will you do the hard work to reclaim what's rightfully yours and live with more margin, options, and peace. That's up to you. But I truly hope that you follow the advice in this video and that you can overcome these obstacles. You can get out of debt. You can beat inflation and become a homeowner one day.

That is my goal for all of you. Thanks. I feel better already. All right, that's it for today's video. Hope it was helpful. If you've been feeling broke and stressed about money and you're ready to turn your financial situation around, be sure to check out my brand new book called Breaking Free from Broke, the ultimate guide to more money.

and less stress. You can get your copy at ramsysolutions.com slash store or check out the link in the description below. As always, make sure to like, subscribe, and share this video with your friends who may get nothing out of this video except a great motion sensor toilet night light. That's okay. I can live with that. Thanks for watching. We'll see you next time.