75 percent of non-homeowners say they could be motivated to buy a house.”
—Jason Notte
We live in an age when it’s increasingly easy for young adults to live in another country for months at a time through study-abroad programs at high schools and universities. There are even volunteer organizations that allow you to live in another country for a summer or longer. Friends of mine have spent summers or semesters in Scotland, Ireland, Mexico, and France, and my sister has done a summer volunteer program in Nicaragua and spent a semester in Spain.
Perhaps the ability to so casually leave home and explore other places is a factor of our tech-savvy generational habits. We can Skype, FaceTime, or video chat with our friends and relatives across the globe in an instant, and social media makes it simple to stay in touch no matter where in the world you wander. With such accessible travel and so many places to explore, it’s no wonder our younger generations are finding new ways to embrace new cultures and experiences.
The American Dream: Now with 80 Percent More Gaslighting
On a side note, can we take a moment to acknowledge that the American Dream is a perfectly gift-wrapped example of victim-blaming? If your life sucks, it’s because you didn’t want it enough, didn’t hustle enough, didn’t do everything in your power to keep up with the Joneses. When the American Dream is out here saying, “I’m so easy to attain if you just try hard enough!” then it’s all too easy to heap the blame on the people whose lives are in shambles.
We also need to acknowledge that this belief lets us distance ourselves from people who have it worse. We tend to believe it can never happen to us, because we’re focused on the dream and making it happen. But most Americans are one paycheck away from financial ruin, don’t have savings, and are trapped in a cycle of debt. And this is normal in our society. The American Dream romanticizes living beyond your means while pretending everything is fine. It’s toxic denial, and it’s time to wake up.
Killing the American Dream
Millennials did not have a big generational board meeting and decide to screw up the idea of owning a home and retiring comfortably. That would be a very silly thing to do, in an attempt to get one over on The Man. Rather, greed has killed the American Dream. Sky-high tuition costs and student loan rates have killed the American Dream. Subprime mortgages have killed the American Dream. The tradition of systemic racism and sexism in America have killed the American Dream. Rising costs and lower wages have killed the American Dream.
And who, might I ask, has left these inequalities in their wake, waiting for us to pick up the pieces? Telling us to be grateful when we rightfully voice the truth? Carpeting over those beautiful hardwood floors? Our parents and grandparents, naturally.
The older generations get annoyed with Millennials because we’re forcing and driving change. Baby Boomer landlords, business owners, and bosses now must reevaluate their practices or risk losing business, since Millennials aren’t afraid to shop around.
Forbes says, “Employers need to stop blaming Millennial turnover on issues of entitlement, listlessness or impatience and instead look at what these workers want and what they—as companies—have to offer them.”7 Business.com adds, “It’s crucial for companies to adjust to [the Millennial] generation to attract and retain talent…Managers need to consider what current and future workers expect from their employers today.”8
Additionally, services and apps like Whose Your Landlord allows younger renters (i.e., Millennials) to connect with landlords more transparently, seeing reviews from past tenants and getting a true idea of the lodgings available. This startup was developed as more and more young adult renters were falling victim to rental scams and feeling trapped by rent hikes while their chances at home ownership slipped further away.
Whether it’s finding a new place to live, a better place to work, or a different brand of chicken nuggets, Millennials vote with their dollars. And it has the Boomers scared as hell.
Making a fuss about how disrespectful and entitled Millennials are derails the conversation and puts us on the defensive. That might have worked when we were kids, but we keep getting older and moving on up the purchasing power ladder. Millennials in their early to mid-thirties are using every penny at their disposal to shape society and hold businesses accountable.
One might even argue that we’re changing the American Dream.
How to Make Sure You’re Killing It
Know that it’s okay to rent. People will tell you that renting is like throwing away money. These people are not in charge of your life. They are also wrong. Renting gives you options. Renting means you have someone who has to fix your broken pipe and the hole in your roof and the furnace. Owning a home may look like a cheaper monthly payment, but when the AC blows in the middle of the summer you are going to realize that you are solely responsible for fixing the broken things and that everything costs money. You can rent your whole life and still achieve happiness. (Plus, the recession and housing bubble burst of 2008 was not a fun time, let’s please not rush to buy homes we can’t afford.)
Travel, if you want. If you want to travel the world and do cool stuff in other countries or states, plan for it and save up to travel to your heart’s content. Plan to sublet furnished apartments to save costs, or travel in hostels or with AirBnB. Travel minimally and consider reducing your possessions to save on keeping things in storage while you are out of the country.
Buy smart. If and when you decide it’s time to buy a home, aim to put at least 20 percent down with a mortgage payment no more than 25 percent of your monthly take-home pay (this is the Dave Ramsey recommendation, and he knows what’s up). If you make $3,000 a month, your mortgage payment should be $750, give or take. This prevents you from having too much of your monthly income tied up in your housing costs. Also—you may be approved for a loan amount that is much higher than this. That is not the number that matters. The numbers that matter are 20 percent down, and 25 percent of your net monthly income.
Don’t fall for zero down. Millennials are at high risk of being targeted for “first-time buyer” schemes that promise an affordable payment and no money down. This is not a safe loan—don’t fall for it. While 20 percent is recommended to avoid special insurance called PMI (which adds to your monthly payment), 10 percent down is the minimum you should aim for. You should have zero interest in a zero-down offer.
Invest wisely. Being a Dave Ramsey follower, I recommend you follow his “baby steps” approach to personal finance, which starts with becoming debt-free and saving an emergency fund before starting retirement savings. Your mom may tell you to start saving now to get a head start, but she may actually be more broke than you, with all the cards on the table. If you act smart with your money and get your financial house in order before you start planning for retirement, you should still be well ahead of the game. Invest in quality mutual funds with a good track record, and make sure you understand the nuts and bolts of everything your financial advisor tells you. If they start telling you that you don’t need to understand something to put money in it, fire them and try again. You are in charge of your money.
Screw other people’s expectations. When your parents and relatives start turning up the “When are you going to settle down?” vibes, feel free to ignore them. You have to do what’s going to make your life fulfilled. If that means spending six months living in hostels because you just have to do it before you die, that’s cool. Finance your dreams with freelance work you can take with you wherever there’s Wi-Fi, or save up a travel fund and spend it frugally.
There’s no right time to have kids. It’s true that
