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Millennials have heard the same old song and dance for years now in the United States: The rising debt, inability to accumulate wealth, and lack of jobs with high pay and benefits have hindered this generation far more than their parents, and their parents’ parents.
Having entered the workforce during the worst downturn since the Great Depression, millennials have had to navigate through an economic hardship that rocked their adulthood before it even started.
It’s also meant this generation has been forced to rely on others for financial assistance. Riddled with astronomical student loan debt and skyrocketing housing prices, there simply hasn’t been a choice for some now 24-40 year-olds to ask family or spouses for monetary help from time to time.
A new survey from Surety First, a California bond contractor, asked over 1000 Americans questions about their financial independence.
According to the survey, less than 30% of respondents said they were completely financially independent, and half of respondents said they were at least somewhat financially dependent on another party.
But it gets bleaker for millennial respondents.
52% of adults aged 25-31 and 49% of adults aged 32-38 reported financial dependence. This isn’t surprising for the bond contractor company, who says millennials are “faced with slower economic growth, lower earnings, and more restricted financial milestones.”
So where are millennials receiving financial assistance from exactly?
Well, with help from their parents, who’s share of wealth has far outdone their children—a trend that doesn’t look to be slowing down soon. In fact, this year millennials own less than 5% of U.S. household net worth, despite accounting for roughly 30% of households. In contrast, Generation X just surpassed its household to wealth ratio this year: It has 26.9% of U.S. wealth, while accounting for 26.8% of households, according to AfroTech.
And we see this concept reflected throughout Surety First’s survey. 57% of adults aged 25-31 and 41% of adults aged 32-38 are still asking their parents for financial assistance.. 26% of all survey respondents cannot afford to pay their bills without parental intervention.
Some of this parent help means covering basic bills like streaming services and car insurance, but most of the financial assistance millennials are requesting are for their phone bills and rent. According to the survey, 40% of adults aged 25-31 have their phone bills covered by their parents, and 39% of that same age group need help with rent.
With astronomical amounts of student loans for this generation, it’s no surprise that they are struggling to get by. By 2021,14.8 Million millennials had student loan debt, more than any other generation. This means that certain milestones like buying a house seem like a far off fantasy for many adults below the age of 40.
In fact, 32% of Surety First’s respondents are unable to pay their student loans without parental aid. And without autonomy over their own financial situations, over 30% feel barred from buying a house. With housing prices inflating by over 13% of last year’s numbers, this milestone seems even further away.
But one thing is clear—this trend isn’t stopping at older millennials. Even younger people seem just as pessimistic about their financial future. In fact, 34% of surveyed respondents say financial independence isn’t achievable before 30 years old.
This new generation, Generation Z, will have to navigate the same waters as their older counterparts. Adults in Generation Z, who are now between the ages of 18-23, have many challenges ahead of them, but they als have time to make it better for themselves and their futures. They will need to find ways to create generational wealth, combat student loan debt, while entering a post-COVID economy.