These are the best personal finance reads from January 2019

Millennials get a bad rap when it comes to money. We’re spoiled. We’re irresponsible. We’re in over our heads in debt. And we don’t know the meaning of hard work.

But what if there were more complex reasons for our perceived laziness, and our flagrant credit card spending? What if we remembered that millennials largely have to save for retirement entirely on their own? And what if we knew of millennials who aren’t taking a free ride from the Bank of Mom and Dad, but are instead the ones financially supporting their parents?

January is all about creating a new outlook on life, which is why we’ve collected personal finance stories from the past month that encourage people to think differently about millenials and money — stories that shed some light on how we got to where we did financially; stories that show the problem is deeper than just laziness or irresponsibility; stories that aim to help millennials with money instead of guilt them about it.

Here are the best personal finance reads on millennials and money from January.

How Millennials Became The Burnout Generation, via BuzzFeed

There’s a lot going on this BuzzFeed piece by Anne Helen Petersen, which gets at the root of why millennials experience what she calls “errand paralysis,” or the inability to do high-effort, low-reward tasks. It’s an affliction that comes as a result of being burnt out — from constantly having to “optimize ourselves to be the very best workers possible.”

It’s worth noting that Petersen received a lot of criticism for this piece, namely for its centering around the burnout experienced by white, middle-class millennials. In response, she wrote a follow-up piece showing a more diverse set of experiences.

Of course, we can’t talk about burnout without talking about finances.

Deep into the story, Petersen reminds us that the cultural expectation has always been for subsequent generations to be better off financially than the one that preceded them. So, by this logic, millennials should a) have more money and b) be better with it than their baby boomer parents. It doesn’t take an economist to tell you that this is, um, very much not the case.

“Financially speaking, most of us lag far behind where our parents were when they were our age,” writes Petersen. “We have far less saved, far less equity, far less stability, and far, far more student debt. The ‘greatest generation’ had the Depression and the GI Bill; boomers had the golden age of capitalism; Gen-X had deregulation and trickle-down economics. And millennials? We’ve got venture capital, but we’ve also got the 2008 financial crisis, the decline of the middle class and the rise of the 1%, and the steady decay of unions and stable, full-time employment.”

Afterpay is Making Layaway Sexy for Millennials—But What’s the Real Cost?, via Glamour

The days of layaway are almost completely dead, but Samantha Leach discovers that the general concept is seeing somewhat of a resurgence. For Glamour, Leach takes a deep dive into Afterpay, a layaway-like service that’s become increasingly popular among millennials. Similar to layaway, Afterpay allows customers to pay for their product in four instalments using a debit or credit card, rather than a lump sum upfront. The payments themselves are interest-free, but if users miss one installment, they’re charged $8 and their account is frozen. If they don’t come up with the money by the next week, they’re charged another $8 until their late fees hit 25% of their total purchase.

The difference here is subtle, but significant. With layaway, the store would reserve the item for you and not let you have it until all your payments were completed; with Afterpay, you get the product immediately and you make your payments after the fact. (One of our writers explored a similar concept last year when she looked at the growing popularity of micro loans and whether or not they’re a good idea.)

Instalment payment models are appealing to cash-strapped millennials with credit cards, but is it not setting them up for financial irresponsibility? Leach talks to financial experts who argue that services like Afterpay are actually teaching people to live outside of their means. She’s not asking you to feel sorry for millennials, but this story shows how it’s become oh-so-easy to buy things we can’t really afford. As the instalment and microloan space continues to evolve, we’re going to have to ask ourselves what the real consequences are.

A ‘how do I compare’ guide for millennials on savings, debt and home ownership, via The Globe and Mail

“Millennials entered adulthood at a time of historically low interest rates, soaring house prices, stiff tuition cost increases and a job market where temporary work without benefits or pensions is common,” writes Rob Carrick, personal finance columnist for The Globe And Mail. “With all this disruption, it’s difficult to know what a normal debt load, a normal mortgage balance and a normal amount of savings is if you’re a young adult. Do most millennials owe money? If so, how much? Is it common to have no savings in this age group?”

Millennials do a lot of comparing, especially to their parents’ generation. There’s the gnawing feeling that we’re not earning enough or saving enough; that by now, we should be there instead of here. In this piece, Carrick pores over the findings from an Angus Reid survey that was conducted in partnership with the Globe. It surveyed 1,500 people in the fall of 2018 — 478 of whom were between the ages of 18 and 37 — and pulls out all the reassuring tidbits: that some 60% of millennials aged 18-37 don’t have much or any savings; that 45% of millennials in the same cohort are carrying $25,000 or less in debt; that 56% of millennials aged 26 to 37 think their retirement will be primarily funded by personal savings. It’s sort of a depressing time, financially speaking, to be an 18 to 37-year-old. But knowing others are in the same boat for reasons that are largely beyond our control helps.
 

The Millennials Who Pay for Their Parents’ Living Expenses, via Vice

Millennials often get blasted for moving back in — rent-free — with their parents, or for borrowing money from them when their freelance work-from-home writing career isn’t quite taking off as expected. But as Ebony-Renee Baker points out in this Vice article, having parents who can bail you out if things get tough is a luxury that not every millennial has. Sometimes, it’s the other way around.

Baker interviews seven millennials whose financial situation flies in the face of popular belief: they’re the ones supporting their parents. Whether it’s due to illness, inability to get a job after immigrating to Canada, or just a string of bad luck, these millennials stepped up and took on the role of financial supporter in their family.

Take Kelvin, who, despite owning a condo in downtown Toronto, lives with his parents. To make some extra money and help his parents with their mortgage and other bills, he rents out the condo, which his parents had actually helped him secure the mortgage on. “About two years ago, I noticed some bills on the counter. I opened them and I saw how much they were paying and I thought it was too much considering their salaries,” he said. “My parents were immigrants who worked hard and have been through a lot so that my brother and I could have a better future. I figured it was my turn to take care of them.”