Applied knowledge is what separates millennials and boomers from achieving their financial goals.
Some older generations argue millennials might prioritize experiences and instant gratification over long-term savings, contributing heavily to their financial difficulties. While financial challenges are prevalent among many in this demographic, it's important to remember that not all individuals within this generation face the same economic situation.
Here are five things millennials spend time and money on that keep them broke:
1. Small thinking
Just because you think you have a tiny brain doesn't mean you can't think bigger. There is no societal hierarchy applied to the depth of your thoughts.
You can think like a King, even if you wear clothes with holes in them. Thinking bigger and asking bigger, followed by bold action, may take courage, but you'll make your financial life far easier.
Small thinking when it comes to money often refers to the concept of a scarcity mindset, where individuals experiencing financial scarcity tend to focus heavily on immediate, short-term needs, limiting their ability to think about long-term financial planning or opportunities due to the constant pressure of covering basic expenses. A 2023 study published in the Journal of Positive Psychology found that this can manifest as a tendency to prioritize small, immediate gains over potentially more extensive future benefits.
The central life mission of broke people is to tread lightly, never ruffle any feathers (those chickens are too big to swallow whole), and avoid problems at all costs. It's stressful, and they can't afford any more of that. But if you want to leap towards financial freedom, millennials must see opportunity in problems. Seek them out to solve them and be paid for their solutions.
Research published in 2022 by the Journal of Economic Psychology refers to financial avoidance as deliberately ignoring or procrastinating on finances. This is often due to feelings of anxiety, stress, or shame related to money. Financial avoidance leads to worsening economic problems and further avoidance behavior. This can manifest in behaviors like not checking bank statements, ignoring bills, or avoiding discussions about money altogether.
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3. Thinking money will make you happy
Being in a position to buy more fancy items and care for your kids will make you feel good and secure. But these are temporary feelings and have nothing to do with your happiness or self-worth.
The thing that holds millennials back from more money (and thus more leverage, opportunities, and security) is the fear that we'll lose a piece of ourselves if we lose money. But money has nothing to do with you.
When we realize that making money or losing it needn't have any bearing on who we are and how we feel, we're in a solid position to open ourselves up to financial risk-taking. If you love being broke, never do anything that risks getting rejected or losing money.
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One of the most ridiculous things I see is millennials simultaneously needing money (because we live on an economic planet) while seeing the pursuit of money as wretched. You need to bin that thinking right now.
Forget all the junk the schools, parents, and churches taught you. Money is a tool that gives you leverage. You can use it for dastardly things, or you can use it for good.
Research on money primarily focuses on the relationship between income and happiness, finding that while more money can generally correlate with increased happiness, this effect often plateaus once basic needs are met, with some studies suggesting a point around $75,000 per year where additional income doesn't significantly boost happiness. However, a 2023 study indicates that happiness may continue to rise with income beyond this point for most people, depending on individual factors and overall well-being.
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No one who made it big was a born salesman. Making money wasn't even a thing for the first few million years of our existence. But now money is relevant, and we have to accept that. Making money must be seen as a craft to learn.
Because millennials all need money -- unless you love scrounging and expect someone else to give you everything. Stop telling yourself the story that you 'aren't into selling.'
According to a 2023 study, motivation to earn wealth positively moderates the relationship between the perception of wealth and personal intention to make money. In addition, post-COVID-19 opportunities positively moderate two-pair relationships: perception of individual intention to make money and explicit perception of the rich -- individual intention to make money.
You're a human, so you must be by default. Learn specific skills that earn. Ask people who make good money questions. Learn sales, persuasion, marketing, and business. Applied knowledge is what separates you from the money you need.
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