Why We’re Buying Avocado Toast – Understanding Generational Debt Differences

Why We’re Buying Avocado Toast – Understanding Generational Debt Differences

In our attempt to explain some of the key differences between generations at work, we’ve been spending the last few weeks dispelling myths about Millennials. One of the biggest myths still persisting is that we spend our money on frivolous purchases and we don’t take saving, or planning for our futures, seriously.

This could not be further from the truth. You may have heard a lot of talk about the student debt crisis, so I’m going to spend today’s blog breaking down the loan crisis facing many Millennials. Understanding this crisis will help you better understand the spending choices and savings priorities of your Millennial employees.

The majority of Millennials (mostly raised by Boomers) grew up in a world where getting a four-year college degree was the minimum expectation. It was the first step on the path to the illusive American Dream. The only problem was that by the time the first Millennials started college (1999) decades of funding cuts caused the cost of higher education to skyrocket.

The average annual tuition at a four-year college in 1988 was just under $7,000 (close to $15,000 in 2018 dollars), but the actual cost 30 years on is 7 times as much. The average cost (room, board, books, and transportation) at a private four-year college is more than $52,000 (Alter, 46). It is true that Millennials are not the only generation with student debt, but the differences are staggering.

According to Charlotte Alter, “the average student debt for a Gen X college graduate was a little over $4,000 – for millennials, it’s nearly $15,000” (46). So while we were preached to from the “education gospel” which believes that more people getting education is a key to a democratic society, that education was slowly being pushed out of our financial reach.

The combination of these factors has led to a generational gap in debt which is crippling for most Millennials. Dr. Kristen and I both have high monthly payments, yet we know many friends and colleagues who have upwards of 3 times more student debt. Statistically, we know that salaries have not increased to match the inflated cost of education, and so we are making less and paying more over time.

What can this insight teach you about your Millennial employees? We are more likely to spend money on experiences (like vacations, activities, and avocado toast) because most of us do not believe we are going to retire. We struggle to pay our bills each month, making us much less likely to be able to buy cars, houses, or save for retirement.

There are a lot of misconceptions about Millennials in the workforce based on a fundamental lack of understanding about the depth of our student debt. If you are a leader or manager of Millennials from a different generation, our best advice is to educate yourself about your employees situations and find empathetic ways to support them.

Though this blog is a bit more depressing than some of our others, we feel it is one of the most important issues to understand when looking at generational differences in the office.

We’ll be back next week with one more look at generations in the office!

(Citations from ‘The Ones We’ve Been Waiting For’ by Charlotte Alter – which you can find here.)


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