As if the 2008 recession wasn’t rough enough, hardships struck millennials again in 2020. Already facing professional and financial challenges, including a dismal job market, sky-high levels of student debt, and soaring living costs, the coronavirus pandemic exacerbated the growing “K-shaped” gap within this generation. The result is a disparity in which the millennial-rich and the millennial-poor will recover at different paces.
Pre-pandemic, many millennials were already strapped into a lower income bracket. Millennials with children are now among those in the generation suffering the most during the pandemic. About 40% of millennial parents are seeing increases in hardships due to heightened food and housing insecurity and employment cutbacks to meet caregiving needs during the pandemic’s school closures.
Meanwhile, there’s a group of wealthier millennials spending less of their disposable income than they would have in non-COVID times. Millennials with college degrees and those who already had a sound financial backstop pre-2020 are weathering the storm better than their peers. Many are tucking away excess cash that typically would’ve been spent on dining out, social events, or plane tickets.
Millennials are experiencing a K-shaped recession. Some millennials graduated from college, built their careers, purchased homes, and are saving for retirement. However, many are struggling due to rising tuition fees, higher costs of living, stagnant wages, and mass layoffs in industries like hospitality.
The pandemic will have an even more pronounced impact on this generation over the next five years. About one-in-four millennials who are saving for retirement, an emergency fund, or other future goals have at least $100,000 or more, according to a report from Bank of America published in January, prior to the pandemic. The same report found 27% had nothing saved at all.1
Millennials need to uncover some different financial planning behaviors, and since time is on their side, their financial status could recover over the long haul. Learning how to manage finances for today and tomorrow requires some expert strategies, and we can help. Contact us today at (540) 720-5656, and let’s get you on the top half of the “K.”
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Megan Jones joined the ILG Financial team in 2020 as marketing director. Megan and her husband live in Fredericksburg, VA with their German Short Haired Pointer, Gus. Megan is a graduate of Longwood University and holds a degree in communications. Megan is the oldest of Dave Lopez’s three children and not only enjoys working alongside her father, but also with her cousin, Chase, who joined the ILG Financial team in 2020 as an advisor. Megan is also a fully licensed Life, Health, and Annuity agent. When not at work, Megan enjoys sitting on the back porch with family and friends enjoying food and music.
Amy Anderson joined the ILG Financial team in 2023 as the client relations coordinator. Her responsibilities include scheduling of appointments, annual check-up notifications, and annuity and required minimum distribution assistance. She is a graduate of Harding University with a degree in Computer Information Systems. Amy and her husband have two children and she enjoys reading, crocheting, music and spending time with her family.
Terri Center joined the ILG Financial team in 2019 as client services manager. She handles client records, application processing, and gathering information to provide a professional and friendly experience with all of our clients. Terri is a graduate of Oakland University. She is married and has two children. She enjoys hiking, family time, and puzzle challenging video games. She also likes to share her creativity in her canvas paintings and sewing projects.
Jessica Carson joined the ILG Financial team in 2018 as an agent. Jessica and her husband have four children, two dogs, 3 barn cats, 5 chickens, and three parakeets. She indeed loves her children and pets! When not at work, Jessica enjoys playing the piano and cello as well as traveling and spending time outside with her family, hiking, fishing, and boating.