Millennials: The Frugal Generation

| April 28, 2014 | 34 Comments

frugal-generation

It wasn’t that long ago that every media outlet out there was referring to Millennials as the “Me Me Me Generation“, but lately it seems like everyone’s changing their tune and realizing that Generation Y is actually having a pretty rough time in today’s age. Sure, we’re lucky to have tablets and things like Skype, but at the end of the day most of us are wracked with debt, working for free (or what feels like free), and have no hope of ever having that same white picket fence American (or Canadian) dream like our parents had.

Reflecting on the past 5 years since the recession hit, I agree with Mashable’s article and truly believe that Millennials are the frugal generation. I know everyone always refers to those who grew up during The Great Depression as the frugal generation, and that’s true as well (not gonna pick that fight), but I don’t think enough credit is being given to today’s young people.

Look at job hunting today for instance. Have you watched this hilarious video about a grandfather’s job searching advice? I know it’s a joke because it’s on The Onion, but I’ve actually heard people tell me this exact advice. The thing is, it may have worked back in the day, but that’s just not how you get a job today. I mean, can you actually imagine going to a company’s head office, asking to meet with the CEO, then asking for a job because you’re “a hard and loyal worker?” I’m pretty sure they’d escort you out before you had time to go through your resume. These days you need to do an internship for little or no pay for a few months with no guarantee of actually getting paid work at the end of it. You have to spend hours applying to jobs online competing with hundreds if not thousands of people for the same job. And once you do get an interview, most of the time the competitive salary the company is offering is way below the median. What’s more, even to get a low-paying office job, you have to spend 4 years and thousands of dollars on a university degree. There are a ton more hoops that Generation Y has to go through compared to other generations, and it doesn’t seem like anything’s about to change anytime soon.

Although job hunting is no picnic for Millennials, I do think this lack of wealth (Millennials are apparently 7% less wealthy than people of the same age in 1983) is actually a blessing in disguise for our generation. We’re being forced to think about money, talk about money, and in turn, be more responsible with money.

When the recession hit, a lot of older people lost a lot of money in investments, some very close to retirement. These people had to then push back their retirement or down-size in order to afford a life of not working in the future. Personally, I never want to have to experience that. And that’s exactly why I’m going to always be an active participant in my investment strategies, will continue to educate myself on personal finance, and hopefully won’t ever have to depend on just one job for my income stream. I never thought of myself as someone who would be an entrepreneur when I was in university, but nowadays it’s what you have to do if you want to be prepared. I will never become a full-time freelancer like my husband, I like having a full-time job with a company, but I’ll probably always have a few side gigs on the go just so I’m not completely screwed if the worst happens and I get laid off. My side gigs helped me significantly this summer when I was new to Toronto and looking for work, so I know it will always be something I incorporate into my life.

It really sucked when the recession happened, resulting in me being an unemployed new grad for 8 months and killing my dream of ever owning a house with a yard to raise my future family in. But like I wrote in 2012, the recession has helped motivate me to kick ass at life, and I think it’s motivated a lot of other Gen Yers to live more frugally and be more financially savvy too. We may have it rough, but like one incredibly botoxed Real Housewife of Melbourne once said “When life throws rocks, [we] melt them down into diamonds.” And if not diamonds, we at least use those rocks to build fire or something else useful.

What are your thoughts? Do you think Millennials are the frugal generation?

(Image: itupictures)

Category: Mo' Money, Saving Money & Budgeting

Comments (34)

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  1. The other advantage we have that older generations did not is that there are times of websites out there ( like this one!) that can provide you with information on how to change your circumstances.

    After all if you were laid off 40 years ago where would you go for information about what to do next? Everyone around you had a long time job and just stayed put. We have the advantage of going to Google typing in help and seeing lots of information that you can actually use to change your situation.

    Sure we were dealt a rough hand with the recession, student loans, and that generation above us giving us advice that just doesn’t work anymore. But by forcing us to flex our frugality muscles early I think it will make us one of the greatest generation to come!

    Long term brian

    • Absolutely. We’re definitely lucky that it’s easier to educate ourselves and find useful resources. I still remember being in school and writing papers only using encyclopedias! I’m so thankful that when I have kids they’ll be able to educate themselves more easily and for practically free. For instance, I taught myself everything about blogging and digital marketing just from reading resources on the internet!

  2. I’d say we’re not as frugal as those who grew up during the Great Depression (who saves shoelaces and tinfoil to reuse any longer?) but we are more financially savvy in terms of having to force ourselves to learn about savings, interest, investing and so on, whereas in the past it was pretty easy just to buy a (reasonably priced) house and be done with it.

    It’s more complicated today, to have, grow and maintain wealth than it was in the past. You need a degree for everything, it seems!

    That said, I wonder if we aren’t also ignoring trade skills or going into tough fields like working in oil and gas because of the stigma of it being a “blue collar job” and not prestigious versus working in an office.

    • That’s a good point, though you still have to go to school for lots of those blue collar jobs. Not all of them but quite a few people I knew working in those industries had to do a post-secondary program, then an apprenticeship, then work their way into a full-time well paying job. It’s still not easy even to get one of those jobs.

  3. I totally agree, I know that most of my friends and I live as frugally as possible and that the economic times has made us work hard (and more creatively). Most my friends and I have second jobs on weekends, also, that Onion video is hilarious!
    J @BoyfriendsABanker recently posted…Frugal Friday – Consignment ShopsMy Profile

  4. Shanondoah says:

    I agree, I think that “coming of age” during the recession, I was about to finish school and I think it made me evaluate what was important and what I really wanted for my future. I think it’s easy to ‘hate’ on millenials because we have grown up in a world where convenience has skyrocketed but that doesn’t mean we aren’t faced with our own challenges.

  5. Bridget says:

    I think it’s been reassuring to hear that millennials are good savers and not gung-ho for car ownership, etc etc but I still feel like they/we are a little spoiled =\

    That said, I don’t think it’s good that we are less wealthy than our parents (though 7% less is a much smaller figure than I expected). It’s sad that money can’t go as far and it’s getting harder and harder to become financially secure or build a successful career. Maybe it makes us into better planners but its still a bummer.
    Bridget recently posted…Is the Internet Hurting your Brain?My Profile

    • It’s a total bummer, but I think it has turned a lot of us into better planners. Lots of people I know are starting to get more interested in personal finance, and I bet they wouldn’t have if they weren’t faced with today’s realities.

  6. I think the concept of having multiple streams of income, just in case, is a very modern mentality. My parents were of the generation that you work one place for 30 years and retire- my how things have changed. I’d say millennials are frugal, industrious, and creative.
    Stefanie @ The Broke and Beautiful Life recently posted…Budget Travel: 5 Days in Hamburg, GermanyMy Profile

    • Absolutely agree. My parents and grandparents were of the same mindset, but once I started working I realized it’s just not the same anymore. You can’t work for a company for 30 years anymore. it’s just not a good idea. These days you need to have various skill sets and always be prepared in case you get laid off or want to change career paths.

  7. Jordann says:

    I definitely agree with this post – we are the frugal generation! A few days ago I listened to a 35 year old friend seriously say that she didn’t think anyone coming out of university these days could really struggle to find a job if they “tried”. She’s a self employed lawyer, so ya know, lots of experience in that field.

    I’m definitely very frugal because it’s hard out there for a Gen Y’er.
    Jordann recently posted…So You Think You Don’t Need an Emergency FundMy Profile

    • Ya, I think some people don’t really grasp the obstacles Millennials have. It’s definitely harder out there to find a job with an arts degree than with a law degree that’s for sure.

  8. Bobby says:

    Jessica I have to agree with you. Many older people think that you just have to get off your ass and go and get a job. In modern times it is not as easy, there is so much competition for every job out there. Back in the day a university degree used to mean something, but today it is common for people to have high qualifications.

    In my opinion there is no more true job security, because some large companies go an lay off thousands of workers off at once without any notice.

    I think when we are old and grown up our children and grandchildren will probably ask us what it was like living during the “great depression”.

    As always, a pleasure to read your article
    Bobby recently posted…The Perils and Pitfalls of Buying from China:Tips When Buying Products from China Part 3My Profile

  9. Rob says:

    Yes, Jess, I would have to agree with your points, along with those of the other Commenters. As a baby boomer myself, I guess in a way we were fortunate in comparison to those generations that followed us. A lot of us, however, squandered our opportunities (although not this boy, I’m glad to say) such that if the boomers weren’t frugal before they sure are learning the hard way to start doing so, if only to be able to retire not living on kibble! :-)

    But, here’s the thing – demographics, the information age, globalization – they all are having impacts. It’s not just getting enough education, it’s getting the “right” education – whether it be university, trade school, internship – whatever. One has to see the big picture going forward – what jobs are going to be in demand, which “buggy whip” jobs will no longer be.

    Once our boomer generation gets older (and not too far off either) I see a big “skilled labour” shortage dawning. I pity the Japanese – they reject immigration and their population is all quickly aging. China too is starting to change – relaxing their rule of only one child families. More and more younger people will be needed to support the older generations (like mine). Not to mention, the average life expentancy (through improved living – health, food, etc.) is increasing. That’s a long retirement and many don’t the $$ for it.

    So all you Gen Y’ers, hang in there. We all will be needing you guys more than you know!

  10. jim says:

    I don’t know if your generation has it harder. I’m a boomer and I’ve got a 20-something recent college grad. He’s struggling and has yet to find a job anywhere close to what his degree is. I get that it sucks. Been there, done that. My spouse and I worked so many crap jobs after graduating from college (and grad school) and we paid for our own education. Almost all millennial’s I know had substantial, if not complete, financial support for their education. And they grew up with a whole helluva lot more advantages than boomers did. I do feel for all those struggling to find decent jobs, but I’m concerned that this attitude of “we have it harder than any other generation” might become a self-fulfilling prophecy. Every generation has its struggles and although those struggles may differ, I’m not sure your generation has it harder than any other – different, yes; harder, I don’t think so.

  11. So true! Most older people think getting a job is super easy, when in reality, it takes a lot patience and persistence. Luckily we as a generation are learning to live within our means early on and appreciate what we have, rather than having it all taken away from us.
    Amanda @ Passionately Simple Life recently posted…Weeding Out Those ExpensesMy Profile

  12. I think socially they are a “me me me” generation I’ve found that it is very hard to have a conversation with a millenial but you do raise a great point. They have to adapt to their environment and this environment is forcing them to be more frugal than ever before.
    Marvin | Brick By Brick Investing recently posted…Why are bonds a good investment?My Profile

    • Interesting. Perhaps you’ve just encountered a few people who are hard to deal with who happen to be Millennials? In my experience, some Millennials are a bit naive and a bit lazy, but a lot more I’ve met are hard workers, ambitious, and are doing their best to pay down their debt as soon as possible.

  13. Anyone graduating from college during or shortly after a recession has a hard time getting their foot in the door. I graduated in 1985 and got two job offers in my field pretty quickly. Had I graduated in 1982 or 1988, I probably wouldn’t have been so lucky. Even though the job outlook doesn’t appear that great, we can still hope that starting jobs come back in the near future. I know that my company is actively hiring younger engineers because we are a bit top heavy (too many old engineers) right now.
    Bryce @ Save and Conquer recently posted…Carnival of Retirement, April 28, 2014My Profile

  14. Seeking for a job nowadays is really not that easy. It has competitions out there. Here in my country, most of the person qualified for a job are those graduated from famous schools. So, students chose to study in a well outstanding university. Because it is being prioritized.
    Marie @ 724 Credit recently posted…How Your Credit Score Can Change Your LifeMy Profile

  15. I think every generation is filled with frugal-minded people. So many people are struggling on all levels, new grads, those who have been employed for years and so on. I think if we all just add a bit of frugality to every day living and realize that nothing in life is promised we may just get further ahead. Like you I’ve had my ups and downs with employment. I had to go back to school when I was 30 and start all over again. It wasn’t fun, cost me money but at the end I was able to find a job. Not everyone is so fortunate but like I always say ‘never give up’ and don’t stop believing in yourself. Great post MR.CBB
    Canadianbudgetbinder recently posted…Why you should enjoy local produce or pay the priceMy Profile

    • Never give up is something I definitely believe. Things certainly haven’t gone the way I thought they would once I graduated university, but I’ve learned to adapt, try new things, and even go back to school to better myself and hopefully my career.

  16. Taylor says:

    I’m really happy that we’re finally getting the credit we deserve. If anything we’re incredibly resilient. As an underemployed generation we could be down and out. Instead we’re paving our own way up the ladder, going solo, or building start-ups. We understand that we may never have the same level of wealth as our parents yet we still find ways to help others and remain optimistic.
    Taylor recently posted…TC Blog Round Up: Posts I’m Lovin’ From Around the WebMy Profile

    • Resilient is a very good word for Millennials. We kind of have no choice but to make our own way, which is cool because I’m seeing a lot more people choose freelancing or entrepreneurship over climbing the corporate ladder.

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