My Millennial Friends Stink at Managing Money

By Careful Spender

Practical financial lessons are rare in school, and lately I’ve been noticing the lack of sophistication and street smarts that my fellow 30-something friends have about money. Many of my friends have given up hope that they can live any other way but in debt and paycheck to paycheck, and have accepted their situation as permanent. They don’t talk about it too much, but I see a heavy cloud hanging over them. These are my peers and my friends – some of America’s struggling and under-employed 33-year-olds, with $34,000 of student loan debt, an annual salary of $24,000, and a $25,000 car loan. Personally, I have been able to resist the 0% interest new car loan and credit card disasters, but some of my friends haven’t been so smart. They don’t know how far in the red they’ve gone. They have mired themselves into an 8-year loan on a depreciating car and wedded themselves to a usurious credit card with compound interest. They are stuck.

My friend Christine is a 31-year-old worker at an animal shelter. She’s been there for nine years and now makes $12 an hour answering phones, cleaning litter boxes, and processing applications. She’s an incredible worker. She treats the shelter as if it were her own business, and in return gets a moody bitchy boss, works every weekend, and hasn’t had a raise in three years. She stays because she believes the animals need her, and she’s afraid to move out of her comfort level. She’s the kind of worker you’d sell your kidney for.

Christine lives in a trailer park where the lot rent is $575 a month, and she regularly has sewage backing up into her teeny lot. She’s lived there for several years with her pot addicted high school boyfriend who doesn’t work – never has and never will. They live together mostly as roommates now. She would marry him if he asked, but he hasn’t brought it up.

At her boyfriend’s urging, Christine bought a new Toyota Rav4 at just under 5% interest last year, with many kudos from her Facebook friends. She couldn’t tell me how much the car cost or how long she’d be paying for it. All she knew was how much the monthly payment would be.

Christine has never left Illinois and frequently talks about winning the lottery. She bought a house in 2006, but lost it in 2009 to foreclosure. Her dream is to own a modest 800 square foot house with a fenced-in yard for her two little dogs. Christine will be paying off her student loan of over $20,000 for the next 20 years or so.

Kara is a 25-year-old department secretary at a local college. She never finished college herself, even though she is bright and quick-witted.

Kara has a four-year-old child fathered by her on-again off-again boyfriend of seven years. The most recent time they got back together, he had a job working at a factory and had promised he’d buy her a house. She went back to him, and they lived in the home for about two years. Then one day he threw a fit at work and punched the time clock – literally – and was promptly canned.

Kara calls him a baby. She says he’s always whining about things and demands that their house be spotless, even though she’s working full-time too and drives their daughter 30 minutes every morning and night to be taken care of at her mother’s house.

Their pathological pattern is for him to insult her then win her back with expensive jewelry. They love 0% interest store credit cards, one of which awarded them the largest outdoor projector screen I’ve ever seen in a backyard.

When he recently lost his job, she left him alone and penniless in their house and moved back in with her mother. When he wasn’t working, she couldn’t stand to have him around so much and hated his neediness. She took their daughter with her.

The last time I saw Kara on Facebook she was selling a baby car seat for $20. I asked her how she was doing and she replied, “broke.” I truly believe she did not have a dollar to her name.

Alex is a 37-year-old woman. She used to run a fancy clothing store at the mall, not just one store, she managed the entire Midwest region. The stores consolidated, and she lost her job in the crash of 2008.

Because she and her husband had filed for Chapter 13 Bankruptcy four years earlier, Alex decided to get a job that was not on the books, so she started cleaning homes for cash. She has built up an extensive network of clients who own fancy homes on Lake Michigan. They call her and keep passing her name along. She’s recruited two friends to expand her off-the-books business.

Alex has one 19-year-old son who still lives at home and recently stormed out of his job at Wal-Mart when the manager wouldn’t accommodate his scheduling request. Now he’s collecting carts at a local grocery store. He was given his grandmother’s old car as a high school graduation present, but it sits unused in their driveway because he can’t hold onto money long enough to make an insurance payment. Alex has to drive him to and from work.

Alex’s second husband of 10 years has no patience for her son’s laziness and wants him out of the house. Her husband also struggles with depression and blames Alex for his unhappiness. His latest destructive thought is that she’s just with him for his money. Alex is afraid he’s cheating on her.

I’m the first to admit that fear is my main motivation for being debt free and having a nest egg. I’m blessed with a streak of old-fashioned independence and fear of embarrassment at the thought of asking family or friends for help. But I think it’s a healthy fear and a positive kind of pride. At least I won’t be selling junk on Craigslist to eat this week.

Question: What financial mistakes did you make when you were young?

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13 thoughts on “My Millennial Friends Stink at Managing Money

  1. Tom Hogge

    I Have two sons one in his thirties, (he has a law degree) the other mid twenties (business degree) works for me in family Screwmachine business.
    Elder married other single . Both own homes , No college debt. Yeah I am bragging .
    But my comment is why the hell do you associate with this bunch that you refer to as peers ,friends?
    You wanting to become a dear Abbey???

    1. Careful Spender

      Because they are kind people with good hearts and we share a common hobby. I do not give them advice unless they ask.

  2. Ed

    I was lucky, I listened to my parents and worked hard. I went to college and managed to graduate without owing any money. I made good decisions about buying things when I could pay for them and chose a hard working frugal mate. Now I go on vacation when others can’t.

    You may notice the common thread throughout your examples where the financial problems are actually the result of a string of bad decisions, we all need to teach our children to make good choices, that choices have consequences and maybe they can keep themselves out of lifelong bad situations..

  3. Michael

    What mistakes did I make? What ones did I not would be much shorter list and I am 54.
    I have progressively gotten better over time. but my 20’s were not good. 30’s till now much better. But I was starting a family in my 20’s, early in the career, was the early 80’s not exactly a booming economy,

    I would say some take to saving better than others. Just like all children can come from same mother and father be raised all under same rules guidelines etc.. and you can and most likely will have all very different outcomes.

    I believe saving is not stressed enough through out life. Millennials are not the first to be stupit with their money. I have relatives in their 70’s that never figured it out and today live social security check to check. We actually have to put them on a allowance so they don’t blow the monthly wad.

    So sorry Millennials you can’t take credit for the discovery and advancement of financial mismanagement. Your parents beat you to it.

    That said I do know quite a few of millennials that are very good with their money. Plus they come from from all walks of life. Ie all classes of society, rich, middle class and the poor side of the tracks. That said good early mentoring of young people helps them get on the right track

  4. Jack

    Turn your friends on to Dave Ramsey.
    They lead pretty pathetic lives when they don’t have to. They need some guidance
    Mistakes: A few.
    Took out loans for vehicles when I was in my 20’s.
    Made the payments fine, but there was no good reason to take out a loan.
    Bought some stock that I thought would make money, lost it all. Lucky it wasn’t a huge sum.

  5. Erik

    The key theme with those folks is bad relationships. There but for the grace of my credit union go I….

    For what it’s worth, I am 50. My first marriage (I was 21) involved a woman who had her car repossessed while we were dating, but never found a way to tell me.

    So early on, we were in credit trouble. And it got worse. While I saved, she spent. Took out credit cards, maxed them. We made it 5 years, and I couldn’t take that, among other things, anymore. We had a 3 year old son. The financial struggles, the legal fees from the custody battle, being a single parent all conspired to bankrupt me. I was not what you’d call “A catch” at that point. I needed a car, mine was dead at that point, but I had no disposable income, and my savings went to the divorce.

    My divorce lawyer gave me some advice I’ll never forget. He told me to go to my local credit union, lay out a recovery plan, and ask them for a modest loan for a car that would get me by for a couple of years. Explain where you were, and how you got to this point. If that didn’t work, try another, and another, until you found someone who would help re-establish your credit. While doing that, save something every week. Even if it’s $5, get in the habit.

    Well, first try, I got a $2500 loan for an OK Chevy. I had to agree to auto-deduction, and immediate repossession if I missed a payment, but I did it. I started working another job. I’m a musician, so I worked harder at that and got cash on the weekends.

    I worked my ass off, and it still took 15 years to dig out. I met my current wife, shortly after the divorce, and we kept separate finances just so my credit wouldn’t drag her’s down. But that was and is a very good relationship, and she was able to help me fill some gaps when things were too tight.

    At 40, my finances were in order. I had (and have) a credit score in the high 700’s. I have a 401K that’s growing. But I squandered 20 years of my life on a series of bad, well intentioned mistakes when I was 20-21 years old.

    Had I more carefully considered everything about my first spouse, I probably would not have married her, because all the signs were there. Living beyond her means. Spending time on workers comp when she seems like she could work to me. Owing friends little amounts of money. And she was the upstanding citizen in her family. They were (and are) a bunch of losers. Had I considered that more carefully, I would be better off now. You don’t need to be married to have kids…..

    So- Enter those relationships with your eyes wide open. I don’t think I am dumb (despite this evidence to the contrary) but I spent 15 years digging out of my screw up. If you can’t have an adult, honest discussion with your significant other about finances, there are probably other issues as well, and you should be very careful about hitching to that wagon….

    We still keep separate finances, by the way. We just got used to it. We pay the common bills based on our income percentage, and the rest is ours to use. We do it that way because it keeps that dialog open.

    I feel for these folks and wish them luck. It’s a hard trail out of that wilderness.

  6. MM

    I understand the position you are coming from, and it is really sad to watch others go through this. However, as stated by another, Millennials are not the first to have this problem. Think of how people from much older generations ran this country into 18 trillion dollars of debt.

    Let’s go ahead and just add the proper amount of zeros to that for clarity.
    $18,000,000,000,000 dollars of debt
    divide that by 322,000,000 people in the USA.

    Each person alive (child or not) would have to pay $55,900 to break even.

    I believe the perception among Millennials today is that money doesn’t matter, given the example they are lead by (the US government). The government can take it away everything you work for anyway. Vehicles, paycheck, home, etc. all at any moments notice. Even money you put into Social Security, it is often joked about that it wont be there when they come of age. (But are still paying into it)

    They view it as a hindrance to not spend it and thus not experience life to the fullest each and every day. Coupled with the extreme costs of health care, unobtainable by many, I’m sure many are not looking to live until the age of retirement anyways.

    Could be wrong, but that’s at least how I try to make sense of it

  7. Skip

    My father’s advice was simple, don’t buy anything for fun on credit, save up for it first. Don’t quit a job until you have another. I’ve also learned to make hay while the sun shines and save the extra for when it rains. It will always rain.
    Being a saver and married to a spender, Dave Ramsey helped save my marriage. He did the dirty work of persuading my wife of things I could not. Great series to do with a small group of friends or couples.
    I firmly believe that all high school students should be required to pass both a personal finance class AND an emotional/relationship health class. Many graduate without knowing how compounding interest works or what unhealthy relationship behavior looks like, such as passive aggressive behavior using emotional blackmail or the silent treatment. Our world would be so much healthier, happier and productive if HS graduates at least understood those basics.
    If you friends understood basic personal finance and emotional health, they would have made far fewer mistakes and all of their lives would be substantially better in many ways.

    1. Careful Spender

      Illinois requires HS students to have one semester of “Consumer Education”. But that’s barely enough time to cover how getting a loan works, credit scores, and how to balance a checkbook. I did learn about ROTH IRAs and compound interest in that class though, and ran back home and made my Dad open one for me. I still have that same account, and I try my best to get in my allowed $5500 each year. I can’t count how many times we studied the Civil War throughout my public school education, but I had to wait till age 17 to learn about compound interest. Seems crazy.

      1. Jack

        Balance a what? Do kids write checks anymore.
        When my niece went off to college, most of the kids she meet didn’t know much of anything. My sister taught her well and she helped her new friends.

  8. Raja

    I am a rarity in that I have managed my money positively from the get-go. I had a savings account set-up when I was 6 years old. I started investing money when I was 26 years old, and now have a sizeable portfolio, several pieces of CA real estate and a mid-6 figure salary with a pension. I don’t think this type of money management is something you can teach…it’s an innate characteristic that only a few people I know have. I DO know of “millenials” that are having trouble, so I try to help them manage their money based on my experience in doing so. Those that have listened are doing better; those that did not, are driving nice cars and living “the life”…without much of a future, unfortunately! There were “millenials” back then too when I was younger that had money issues, so the problem isn’t new. Americans are notoriously bad at saving money, which is why there is only a “1 per cent” club in this country that has any appreciable wealth. This can change through more societal emphasis on saving and becoming more self-sufficient, and less dependent on government resources as a bail out scheme. I don’t know what it will take to instill the discipline and common sense necessary to be a successful money manager, but hopefully this type of discussion will help.

  9. Peter H.

    Under European feudalism, those in power controlled the serfs by controlling their housing, taking a large part of their income, and making them dependent on the power structure to stay alive.
    Those in power today encourage everyone to go into debt to have those things they want, regardless of their means to pay for it. The government taxes real estate, so ultimately we all just rent the property that we “own”. The price of basic food, such as milk, is controlled and kept artificially low so as to be very affordable.
    History repeats itself.
    There is a good reason the founders of this country structured the constitution to try to prevent an excessively powerful government. The voters, encouraged by the leadership of this country, have failed to keep the power of government in check.


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