Millennial Money: The Emerging Millennial Economy

Part I: The Changing Economy

Generation Y, aka millennials are coming of age. As they enter their prime years of working and spending their impact on the economy will be significant.

We can already witness emerging patterns. 

Not only do millennials make their money in ways that differ from their parents. But, they also spend their earnings differently than the boomers.

Let’s take a look at what has initiated this shift in earning and spending, and what sort of impact it may have on the economy.

Cheap or Smart?

Millennials (those born between the ‘80’s and the late ‘90’s) are known as the cheapest generation… But why is this?

Is it because being raised during a recession makes penny pinching a second nature? Is this a result of a change in spending habits and attitudes because the generation is smarter than their parents? Or is it because many millennials are just flat out broke as a result of massive debt levels paired with low job prospects and stagnant wage inflation?

Longer term, rising federal debt loads, and increased government spending on the aging population has placed a significant burden on generation y. This has left them strategizing on how to be cheap, so as to be smart, and to not remain broke into the future.

Sharing and Access Economies

With the new economy, has come the emergence of a new sharing attitude among young people. This phenomenon, characterized by the sharing of common resources as opposed to individual ownership is changing many mature industries (e.g. automotive and hotel).

Our parents generation took pride in a sense of ownership, as though it were an indication of success.  On the other hand,  millennials are different, in that they recognize that ownership may not always be an ideal relationship, when other options are available.

Millennials are more inclined to rent larger items such as houses and cars. They do this in attempts to avoid entering into lengthy, high interest, high-principle banks loans. This has initiated an emergence of rationale and practicality among millennials in their spending patterns.


Although college is increasingly necessary, it is becoming less affordable and a greater burden. An Ontario student, graduating from a four-year degree program at a University has on average a total debt load (federal and provincial combined) of $34, 000.

The cost of tuition has skyrocketed disproportionately to that of inflation.

This level of debt heavily influences the decisions of millennials, from everyday purchases to life milestones. Millennials move out of their parents dwelling later in life, make large purchases later, and marry later. Oftentimes the case is that this is because they just can not afford it!

Earned or Entitled?

Their parents think they just don’t want to grow up and take on responsibility, yet millennials contend that the responsibilities of their generation just aren’t the same as their parents.

Millennials are forced to do more with less.

The millennial generation faces many stereotypes and misconceptions. They have effectively been labeled as an entitled generation. A generation that complains about what they don’t have and blames everyone else for their shortfalls.  But they are also the most educated and qualified generation.

Millennials expect more, because they have worked for more.  The average cost of college tuition is more than twice that of their parents, even after being adjusted by inflation. Yet, job prospects and wages remain sub-par. Long gone are the days where a graduate received a salary with benefits after school. Today’s grads face a much different reality.

Saving is a Luxury 

Millennials have the lowest net worth, despite being the most educated generation to date. Most do not have savings or assets, and are in sky-high amount of debt.

This is not because they do not understand the concept of saving, or because they simply choose not to. But rather, the reality is that it is far too expensive to save.

Rising property costs, paired with high interest debt payments, low job salaries and high inflation rates… makes saving a modern luxury.

*** Stay tuned and keep an eye out for Part II!

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