You would probably guess the most educated generation would also become the most financially successful. But unfortunately, that’s not what happened for millennials. Millennials had the misfortune of graduating college around the Great Recession, and in many ways, that single circumstance shaped so much of their adulthood.
Due to the stock market crash, millennials struggled to find work immediately after graduation. When they did, it was with lower pay and little-to-no workplace benefits[1]. Studies show that your first job sets the course for your financial trajectory, and millennials struggled to get theirs off the ground. In 2019, Census Bureau economist Kevin Rinz showed that although millennial employment has recovered from the Great Recession, their earnings still have not.[2] Meanwhile, the cost of living is rising at faster rates than their incomes are.[3] Between low wages and student debt weighing down on them, millennials aren’t optimistic about their future.
In 2008, 75% of millennials graduated with student debt[4], and in 2021, 40% of millennials still had student loans to pay[5]. This debt has made millennials feel incapable of reaching financial goals, like buying a house or saving for retirement.[6] They are aware that they can’t rely on pensions or social security for retirement[7], so not only are millennials trying to pay off debt, they are also navigating a path towards retirement on their own. Unfortunately, millennials also show a lower understanding of financial literacy than older generations[8], and more confused about managing money.
Millennials tend to be less trustful of traditional financial institutions, and their risk-averse investing habits reflect that.[9] It’s easy to understand why millennials would be skeptical, given that the stock market crashed in 2008 due to irresponsible practices that took advantage of innocent people. As described in an article on the History website, “Around the country, armies of mortgage salesmen hustled to get Americans to borrow more money for houses—or even just prospective houses. Many salesmen didn’t ask borrowers for proof of income, job or assets. Then the salesmen were gone, leaving behind a new debtor holding new keys and perhaps a faint suspicion that the deal was too good to be true.” [10]
These unethical actions impacted millennials on several levels, and they haven’t forgotten. Millennials are more trustful of Silicon Valley and technology and are comfortable using digital platforms like Mint, Wealthfront, and Personal Capital to help them manage their money[11].
Unfortunately for some millennials who thought their financial ground was finally settling, 2020 devasted their lives again with a global pandemic and another economic depression. A Washington Post article revealed that millennial’s employment rates plunged faster in early 2020 than GenX or baby boomers. The article explains, “At the beginning of 2019, millennials became the largest generation in the United States’ full-time workforce, surpassing Gen X. But the coronavirus crisis walloped millennials so disproportionately that they’re on the precipice of giving the top generational spot back to Gen X.”[12]
I happen to be one of these financially challenged millennials who has spent a big chunk of my career trying to catch up on finances after starting from a much farther starting line. I graduated college in 2008 and spent my early years working for companies that provided minimal wages without 401k. I lived in Austin at the time, and every teeny incremental raise was just enough to cover the rise in my rent. I wasn’t living an extravagant life by any means, and I worked incredibly hard to build my skills and propel my career in an upward motion. After a decade, I eventually did “catch-up” by paying off my student debt and earning enough to start saving for retirement. But, I’m still behind compared to my predecessors and uncertain if the financial decisions I am making are the right, best or smartest ones. Like so many millennials, the nuances of money are still stressful and confusing.
Understanding the external circumstances that have contributed to my situation and knowing I’m not alone has inspired me to ideate a product that helps millennials find the resources they need to achieve financial wellness and confidence. With that concept in mind, I will be spending this semester working through the UX process and prototyping a digital product that attempts to solve this problem. Ultimately, I’d like to create something that could have helped a younger version of me and and could be helpful to people who find themselves navigating money on their own and wanting to make the best decisions for their future, given their circumstances.
To kick off the project, I drafted a UX Project Proposal and Plan to help me, my professor, and classmates understand what I was building, why I was making it, and how I planned to do so. Creating a comprehensive proposal and plan was incredibly helpful in understanding the project’s scope and constraints.
After getting the green light on the overall concept and direction, I built a timeline of the deliverables and deadlines.
Once again, Notion has been my project management tool of choice, and it has yet to fail me. The ability to view my project breakdown in several forms, and filter, organize, and customize my content in any way I need, made building this project plan and timeline a breeze. Within each deliverable, I can also include sub-deliverables, related documents, images, etc.
With a clear intention and plan in mind, I feel prepared for the next step in my process. Next, I will be conducting research that will help crystallize what I am making, who it’s for, and why it’s needed.
Resources
- Van Dam, A. (2020, June 6). The unluckiest generation in U.S. history. The Washington Post. https://www.washingtonpost.com/business/2020/05/27/millennial-recession-covid/
- Van Dam, A. (2020, June 6). The unluckiest generation in U.S. history. The Washington Post. https://www.washingtonpost.com/business/2020/05/27/millennial-recession-covid/
- Hoffower, H. (2019, May 21). Six financial problems plaguing millennials through no fault of their own. Insider. https://www.businessinsider.com/personal-finance/money-problems-millennials-facing-student-loan-debt-homeownership-2019-5
- Kurt, D. (2020, July 21). How the Financial Crisis Affected Millennials. Investopedia. https://www.investopedia.com/insights/how-financial-crisis-affected-millennials/
- Fortuna, N. (2021, February 10). Millennials Are Closing Generation Gap by Some Financial Metrics. But Not This One. Barron’s. Retrieved May 19, 2021, from https://www.barrons.com/articles/millennials-are-closing-generation-gap-by-some-financial-metrics-but-not-retirement-savings-51612969201.
- Wang, P. (2020, January 30). Millennials Are Behind Financially. Here’s How They Can Catch Up. Consumer Reports. https://www.consumerreports.org/financial-planning/millennials-are-behind-financially-how-they-can-catch-up/.
- Kudla, D. (2020, September 11). 3 Thoughts For Millennials Who Want To Retire One Day. Forbes. https://www.forbes.com/sites/davidkudla/2020/09/11/3-thoughts-for-millennials-who-want-to-retire-one-day/?sh=4f73a246675d
- Nedlund, E. (2020, February 26). Millennials struggle the most with money management and financial stress. EBN. https://www.benefitnews.com/news/millennials-struggle-the-most-with-money-management-and-financial-stress
- Schrager, A. (2018, September 15). The financial crisis may have scarred a generation for life. Quartz. https://qz.com/1386293/the-casualty-of-the-financial-crisis-risk-taking/
- Rauchway, E. (updated 2021, January 20). The 2008 Crash: What Happened to All That Money? History. https://www.history.com/news/2008-financial-crisis-causes
- LaPonsie, M. (2018, July 27). How 7 Financial Tools and Services Simplify Life for Millennials. U.S. News. https://money.usnews.com/money/personal-finance/saving-and-budgeting/articles/2018-07-27/how-7-financial-tools-and-services-simplify-life-for-millennials
- Van Dam, A. (2020, June 6). The unluckiest generation in U.S. history. The Washington Post. https://www.washingtonpost.com/business/2020/05/27/millennial-recession-covid/
Writings by Michelle Ovalle 