‘Unluckiest’ generation reaches 40s: Here’s how millennials can get back on track

The millennials have started turning 40. That’s right, this “young” and “naive” generation has officially entered middle age. Those born between 1981 and 1996 are in the millennial group so they are now between the ages of 26 and 42. I fall in this category, as I was born in 1982, so you can refer to me as an “elder” millennial.

I was around when movies had to be rewound, wearing seat belts in a car wasn’t mandatory and social media was not yet invented.

Millennials are in trouble. We have been dubbed the “unluckiest generation” by The Atlantic and The Washington Post because we just can’t catch a break or get ahead. We are kids who have been impacted by market downturns more than any other generation.

My fellow “elders” were in college or high school in the early 2000s when the dot.com bubble burst and the Twin Towers fell, wreaking havoc on the economy. We were a few years into our careers when the Great Recession of late 2007 to 2009 devastated the markets once again. As low people on the totem pole, we were the first to lose our jobs when budgets were slashed, or “restructuring” was required.

Things were good for a while, and then came the pandemic of 2020. This crisis cut deep in countless ways. From a financial standpoint, those in the service industry, small business owners and “gig” workers suffered significantly. During the pandemic, the millennial elders were likely married (or divorced) with mortgages, minivan payments and a pile of kids to support. The younger millennials were just gaining some traction in their careers, only to be derailed once again.

We’ve seen more than our fair share of disasters that have stunted our job prospects, professional growth and earning potential, but that’s just part of the story. According to Forbes, millennials were leaving the nest right as the economy and the landscape of higher education were shifting. During our lifetimes, college costs have risen significantly, increasing 68% from 1999 to 2019. So, we graduated from college with a degree and soul-crushing amounts of debt during times of high unemployment, low wages and bear markets.

These financial hardships are affecting more than just our bank account balances. Galen Buckwalter is a psychologist who researches financial trauma and studies people’s relationships with money. He concluded that 23% of Americans have PTSD-like symptoms from financial stress. For millennials, that number is 36%.

Experts point to unbearably high debt levels, stagnant incomes and nonexistent savings as potential issues that have contributed to this extreme level of stress.

With so much fear and anxiety about money, it is no wonder that 66% of millennials have no savings for retirement. According to Pew Research Center, the median net worth of millennial households is about 40% lower than baby boomers and 17% less than Gen X at the same point in their lives. These are startling statistics, and it doesn’t have to be this way. Even though this generation has been shaped by financial adversity, it doesn’t have to control the whole narrative of their lives.

So, what can we do about it?

▪ Start building an emergency cushion: Not having an emergency fund is one of the biggest landmines that Americans face. Even when we’re not in economic crisis, there is always a financial emergency waiting to strike. Be ready for it by building up your cash reserves to 3 to 6 months’ worth of your spending needs. I suggest keeping it in a high interest savings account and setting up an automatic deposit from your paycheck to get started.

▪ Get control of cash flow: Knowing what you spend each month puts you in the driver’s seat of your financial life. Make sure you know how much comes in and how much goes out each month, so that you can start to create the life you want. When you pay off a debt or get a raise, direct that payment to another goal, don’t just start spending more in general.

▪ Invest for the future: Time is still on our side for building wealth. Start investing in your company 401(k) or a Roth IRA if you’re eligible. Invest for growth with the long term in mind. Don’t get swept up in the chaos of the new hottest trend. Just invest in “boring” mutual funds, exchange-traded finds or index funds to start growing your net worth. View market downturns as great investment opportunities instead of something to be feared.

We don’t have to let economic disasters determine our fate. Making small shifts today will get big results in the long run. It’s time to get unstuck. It’s time to be the boss of your financial future.

Jamie Bosse, CFP is a member of Financial Planning Association of Greater Kansas City. She is a financial planner at Aspyre Wealth Partners and the author of “Money Boss Mom,” “Helping Young Parents Be the Boss of Their Financial Future” and the Milton the Money Savvy Pup series.