What's up, graham it's guys here so, unfortunately, i have some good news and i have some bad news now. Normally, i would ask which one you would want to hear first, but because i'm all alone, just talking to a camera, obviously i'll, just assume that we should get the bad news out of the way first and uh. This is what it comes down to. A new survey.

Just came out that found that 70 of millennials are now living paycheck to paycheck in 2021, and, if you think, okay well, graham that's just because you're not making enough money and they have student loan debt to pay duh. You would be very very wrong in fact, that exact same survey also found that sixty percent of millennials earning above a hundred thousand dollars a year were also living paycheck to paycheck, indicating that there's a serious problem in terms of how that money is being managed and Where it's going that needs to be addressed. However, the good news here is that, by looking through the survey and analyzing, the average millennial spending habits, we could identify precisely where 70 of millennials are making a huge mistake, how they're wasting money without even knowing it and how they could quickly turn things around. So that they're, not just another headline statistic on business insider, but before we start did you know that ninety percent of viewers don't smash the like button? With your help, you could be so much more than just a statistic and smash the like button because it helps up my channel tremendously.

So thank you guys so much and also big, thank you to wealthfront for sponsoring this video, but more on that later. So, in order to break this down and get to the root cause of the issue, we have to get some of these broad statistics. Out of the way like i mentioned, this study discovered that a whopping 70 of millennials are living paycheck to paycheck in 2021, which is significantly higher than any other generation. They say the aspects of living paycheck to paycheck is a much better indicator of economic needs and wants just as much if not more than income or wealth and right now, there's simply not enough money left over to be saved, indicating that there is a serious problem For instance, bloomberg reported that millennials are significantly further behind in almost every single financial milestone, owning less wealth, taking on more debt, earning a smaller amount, delaying home ownership and refusing to invest.

As a result, 61 of millennials now expect to work through retirement, and much of this is assumed to be the result of the great financial crisis of 2009, which stunted millennials ability to save money during the first few, most pivotal years of their career. Until today we're millennials own just five percent of all u.s wealth. However, a lack of income might not be the entire problem here, even though the median income for millennials was 57 500. A year, like i mentioned today, 60 of millennials earning above a hundred thousand dollars.

They're also living paycheck to paycheck, which indicates there's a much bigger problem than people expect. That's because living paycheck to paycheck could mean that you simply spend all of your money each month without having any of it left. Over and technically you could be making millions per year and still living paycheck to paycheck, if you spend it all on boats and lambos, and this is of course, where we start getting into some of the issues. This reminds me of an article that was posted.

A few years ago, which went absolutely viral online, that claimed you now need to make 350 000 a year to live a middle-class lifestyle in a big city with a family of four, and they prepared quite the argument. First, they say that earning 350 000 a year as a family in a high cost of living city is not exactly as uncommon as you would think. Like a rapid transit janitor who marries an elevator technician, could earn well above four hundred thousand dollars a year. A long-standing employee of a big five tech company could see that salary by the age of 35, or an only fans creator could make all of that combined in a single month.

Okay, but seriously, they say that quite a few highly sought after competitive professional fields have the ability to make quite a lot of money once you move up within the company and the paycheck to paycheck budget associated with that is well uh terrifying. With a gross 000 income of 401k contribution of 38 000 after taxes, they're left with 223 840 or 18 653 dollars a month, then they spend approximately 4 500 a month on child care. Two hundred dollars a month for food sixty six hundred dollars a month for housing, twenty five hundred dollars a month for insurance and three vacations a year, eight hundred dollars a month for a car payment on a toyota, highlander and then nine hundred dollars a month. For other, and after all of that said and done, that leaves a leftover amount of wait for it: 121 dollars a month on an income of 350 000 a year now, on the surface, it's kind of like an androgek money trick gone wrong because it's like, where Did that money all go, i just saw it, but they provide a reasonable argument for each expense for such a family with an average house and a fairly average bill for someone living in a high cost of living area and at the end of the day, with 350 000.

They cannot save enough money for retirement, although from the way i see it, here's where the math starts falling apart. This middle class paycheck to paycheck lifestyle is still enough to invest 38 thousand dollars into a 401k, along with another 12 000 invested into an hsa they're, also building two thousand dollars a month into home equity. Until eventually, it's paid off thirty thousand dollars a year of child care will eventually be a thing of the past. That means over time, this family is still able to save and invest a hundred thousand dollars a year without cutting back at all, and even though there's barely any money left over, i would hardly call that paycheck to paycheck, not to mention a lot of these expenses.

Are discretionary, including another twenty thousand dollars spent on recreational and non-essential activities that you could easily remove entirely if needed, and that means this family could be saving ten thousand dollars a month or more on top of everything else, with the proper budget plan and discipline. But under this budget, it's absolutely possible to say they're living paycheck to paychecks, simply because they spend the majority of what they make without a lot of money left over after everything is said and done. But that's not all, even though it's easy to poke holes in a hypothetical 350 000 budget, you know what they say fact is often stranger than fiction, and what's even more interesting, is that a 2015 survey found that 44 percent of millennials earning between 100 and 149 000, a year said that they were living paycheck to paycheck, which was significantly higher than those earning 50 to 75 000 a year at just 33.5, meaning the more money you make, the more pressure you have to spend your money and the more likely you are to Then live paycheck to paycheck. Now, what's really sad is that this type of situation is so common that they made an acronym for it.

It's called henry, which stands for high earner, not rich, yet this encompasses young professionals who quickly start earning a lot of money, but simultaneously increase their lifestyle to the point where all of a sudden, they don't have any more money left, although if you're not a henry And you don't earn 350 000 a year, you're, still not immune from the fact that things are getting more expensive and your money does not go as far as it once did. So, in terms of why 70 of average earning millennials are now living paycheck to paycheck and what to do about it, let's dissect the average millennial budget and then figure out where things are going so terribly wrong. According to analysis, by go banking rates, millennials spend an average of 207 dollars a day, which is about 44 more than the average american. The largest millennial expense, as you would expect, was spent on housing at an average cost of just over a thousand dollars a month and in high cost of living areas.

This could be even higher totaling as much as 45 percent of income made by the age of 30.. Groceries were then another 330 a month and eating out was an extra 300 a month which was found to be the highest food budget among all generations, and even more astonishing is that 87 of millennials say they're willing to splurge on a nice meal out. Even if money is in short supply, everything else starts out at what might seem like a low cost each and every day, but over time, in conjunction with everything else, it adds up and all of a sudden, the average millennial has nothing left over. At the end of every month, of course, all of this is easily preventable, with a 2017 study finding that 70 of millennials admitted to spending money on clothes, they don't necessarily need, and sixty percent of millennials say they spend more than four dollars on coffee, which is Exactly why i decided to make my own, affordable coffee that you can make from home now for sale at banquetcoffee.com.

The biggest issue from all of this, though, is that millennials spend an average of 838 dollars a month on non-essentials. The biggest spending habits here include vacations, dining out and coffee, which they say, is heavily influenced by your friends, boredom advertising and social media, and then we got the final nail in the coffin 49 of millennial. Respondents said that their non-essential purchases contributed to the d word, and that would be debt so in terms of what to do about this and how to easily avoid these mistakes. Here's a few simple pieces of advice that anyone could follow relatively easily and i promise they will help save you money now, first, in regards to housing, because this is your single largest expense generally, the rule of thumb is that your housing payment should not exceed 30 Of your income, ideally, i would even go so far as to say that if you could get that number closer down to 20, whether you live further away from work in a smaller place or live with roommates.

That would allow you significantly more money left over every single month that you could then use towards number two, and that would be investing like i mentioned earlier, millennials own, just five percent of all u.s wealth and that's it. In fact, it was found that 43 of millennials are straight up, just not investing anything, and almost 50 percent of them are waiting to earn more money to invest, which is a huge problem and not acceptable, at least under my watch and thankfully our video sponsors today. Wealthfront heard i was making this video and they wanted to do their part to help out. For those not aware.

Wealthfront is an automated investment platform that utilizes software to find the optimal portfolio to grow your money long term, when you're young, you potentially have decades of compound interest to use to your advantage, meaning your money makes you more money, which then makes you more money which Then makes you even more money now in terms of what to invest in there's decades of data out there, showing that investing in a globally diversified portfolio of low-cost index funds is one of the best ways to put your savings to work and wealthfront makes that investing Process, easy, accessible and affordable, no matter what your knowledge of finances, their account setup is also incredibly simple. You just need a few minutes and 500 to open an investment account and they will take care of the rest. They also automatically use a strategy called tax loss. Harvesting that could lower the taxes you pay without any additional work on your end and 96 of their clients, using a recommended portfolio have had their advisory fees fully covered by that tax loss, harvesting service alone and best of all, if you smash the like button for The youtube algorithm they've agreed to waive their 0.25 management fee up to the first 10 000 for the rest of your life, just by using the link down below in the description not to mention, they also give you free access to their financial planning tools which allow You to estimate your net worth over time and how you could further save and invest more money based on your income and spending.

So if you're interested in signing up and learning more, like, i mentioned, they've, agreed to waive their annual management fee up to the first ten thousand dollars for the rest of your life by using the link down below in the description. The main point here is that it's essential to start investing your money as soon as possible, because the sooner you start, the longer your money has a chance to grow postponing this is only going to further set you back and if you don't have the extra money To go and invest that brings us to number three and that would be cutting back your expenses from the entire millennial money spending budget. We could see that the biggest expense beyond housing is discretionary. This includes eating out entertainment, clothes and uh.

Coffee just get this. The average 25 to 34 year old admitted to spending more than two thousand dollars a year at coffee shops and forty percent admitted to spending more money on coffee than they do on their retirement, which come on. Don't do that instead, my solution is this: do enough to cut back on your discretionary spending to max out your roth ira at six thousand dollars a year, if you just start doing this at the age of 25, and you get an average of a seven percent Return and a broad index fund by the time, you're 65 you're gon na have nearly 1.4 million dollars completely tax-free. Now, obviously, not everyone is spending over a thousand dollars a month on non-essential items.

So it's not easy to say just spend a little bit less money. So, in that case, we got number four. One of the best ways to make more money is to switch jobs. There are multiple studies out there that show that people who switch their jobs every two to three years make nearly fifty percent more than someone who stays at the same company and if you switch jobs just once, you could see yourself with an average of a fifteen Percent pay raise not to mention slow wage growth does not apply to the top one percent of earners.

In fact, wages for this group went up 138 since 1979, while for some context the bottom 90 of earners only saw a 15 increase. Even more surprising was that the income for the top 20 of earners rose 1300 more than the lowest income tier between 2007 and 2017., and if you're curious how you could get one of these high-paying jobs according to linkedin. These industries include technology, healthcare and finance. So if you're curious about switching careers going back to school or educating yourself in a different field, picking something that's in demand and difficult to replace should help you make more money overall.

So, overall, the reason why 70 of millennials are living paycheck to paycheck without any money left over to save and invest, is due to a combination of low wages, increasing expenses and poor spending habits all accumulating into the perfect storm of little leftover money. If you're, making under the median wage and you're already cutting back and saving as much money as you can, then switching jobs, learning a new career or increasing your income is going to be the best way to start saving and investing more money. However, if you're making above the median wage, then i would take a careful look over all of your expenses and identify exactly where your money is going and then find a way to scale back and invest the difference. Lifestyle, inflation and keeping up with the joneses seems to be one of the main culprits behind why sixty percent of millennials earning above a hundred thousand dollars are also living paycheck to paycheck, and that deserves a full evaluation to identify exactly what you don't absolutely need.

Now, of course, you're free to spend whatever money you want, because after all, it's your money, but there is a cost to investing your money later in life and the longer you wait, the more expensive it's going to be in order to retire. Just consider this. If you need one and a half million dollars to lay on a beach all day after the age of 65, you could do that by investing 333 a month starting at the age of 18.. But if you start at the age of 25, you'll need to invest 550 a month to wind up with that exact same amount.

And if you start at the age of 30, you'll need 791 dollars a month. And if you wait until the age of 35, you will need 1158 dollars a month. I personally choose the option to invest as soon as possible, because the longer you wait, the more expensive it gets and also by the way. Thank you steven for smashing the like button.

I read all of your comments, so if that's what it takes to get you to hit the like button, i'm all for it i'll do it so with that said, you guys thank you so much for watching. I really appreciate it also make sure to subscribe and hit the notification bell and feel free to add me on instagram, i posted pretty much daily. So if you want to be a part of it, there feel free to add me there. As on my second channel, the graham stefan show i post there every single day - i don't post here.

So if you want to see a brand new video for me every single day, make sure to add yourself to that. And lastly, if you want a totally free stock, that's now worth all the way up to 70 use the link down below in the description and sign up for public and plus, i'm posting all of my own stock trades on there. So if you want to see exactly what i'm buying the link is down below in the description. Thank you guys so much for watching and until next time.

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