Why Some Millennials Can't Save Money-Navigating Adulthood

5 Reasons Why Some Millennials Can’t Save Money

This is a “sister post” to a post written by the lovely The Frugal Gene. Check out Lily’s post here

Why Some Millennials Can’t Save Money? I’m a huge advocate for budgeting and I think everyone should try to save for retirement as soon as they start their first job out of college. This is probably why my friends are convinced that I’m 26 going on 40. I get it- for most people, talking about budgeting is far less interesting than discussing the new season of Orange Is The New Black. I try to be open-minded and see things from other people’s perspectives, but sometimes I wonder why some millennials can’t save money.

Why Some Millennials Can’t Save Money- Statistics

According to a 2016 article by CNBC, most millennials aren’t doing a great job of saving. Here are the stats according to GOBankingRates.

  • “Young millennials” (18- 24 years old): “72% have less than $1,000 in their savings accounts and 31% have $0.”
  • “Older millennials” (25- 34 years old): “67% have less than $1,000 in their savings accounts, 33% have nothing at all”

In all fairness, most people have dealt with student loan payments. the average American in their 30s has an average student loan balance of around $34,000. The average American in their 20s has an average student loan balance of around $22,000 (CNBC).

We all know that I’m a huge proponent of a rainy day fund so you’re somewhat prepared for emergencies like car repairs or doctor’s visits. But why is it that some millennials just don’t seem to want to save? Here are 5 top reasons for why I think  some millennials can’t save money. *Warning: tough love ahead.

5 Reasons Why Some Millennials Can’t Save Money

Crippling Student Loan Debt

As I talked about before, student loan debt is why some millennials can’t save money. Depending on how much student loan debt you have, it can seem like you’re never going to be able to pay off. I feel like some people have such high student loan debt that they feel like they’re never going to pay it off. When you’re making monthly student loan payments for what seems like forever, it can feel like you’ll never pay them off.

Takeaway: think of your monthly student loan payments as steps you’re actively taking towards financial independence. Take it from Millennial Money Diaries:

The Monthly Payment Type in my book is the worst debt personality. They usually don’t think at all about the amount of Interest vs. Principal they’re paying on a month to month basis and really only see the monthly minimum payment they have to make.

By making just the minimum monthly payment, you’re going to pay a ton of money on interest and chances are, you probably aren’t going to chip away at the principle [amount you actually owe] for a long time. If you’re able to, employ some easy money saving tips and put your savings towards extra loan payments. Sure, it might not be as much fun as taking a spontaneous trip to Bermuda, but it paying off your student loans early will greatly enhance your life.


FOMO Phenomenon

In case you’re not acquainted with the term “FOMO” it stands for fear of missing out. You can often see this term used when someone posts a picture of themselves at Coachella or at a drop-dead gorgeous vacation destination. Basically, you use the term “FOMO” when someone else is experiencing something that you can’t attend or experience yourself. This fear of “missing out” on what could be a life experience drives many millennials to buy experiences that might not be the best financial decision for them at that particular time of their lives. I honestly think that the constant presence of social media is partly to blame. When you’re scrolling through your social media feed and seeing all of your friends enjoying fun experiences all of the time makes you think, “I want that in my life.”

Using Coachella as an example, the music festival can cost between$627 to over $8,455 to attend depending on how much you want to splurge and where you’re traveling from (Source: Time Magazine). Let’s say that 6 of your friends are going to be dropping $2,000 to attend Coachella. I totally get it, all of your friends are going and it’s probably going to be a fun time. But is that temporary moment of fun worth putting yourself further into debt?

YOLO Mentality

Alright, time for another millennial term “YOLO” which you probably know, but it stands for “You Only Live Once.” This is similar to FOMO, but I find that in my own personal experiences, YOLO refers to spending a large sum of money on something that you can’t afford/probably shouldn’t buy, but you do so anyway with the mentality of “life is short, so what the heck.” Don’t get me wrong, I’m all for indulging every once in a while and spending money to have a higher quality of life. However, buying a really expensive car when you’re barely making ends meet or putting a pricey Europe trip on your credit card to “find yourself” is not a good idea.

Takeaway: Don’t do it! Spending thousands of dollars of money you technically don’t have is not the best financial decision. We all have that craving for adventure sometimes, but stay strong and don’t let your emotions overcome you. YOLO trips are fun, but you know what else is fun? Buying a house and building equity! [Okay, I realize that this statement officially makes me sound like I’m 90].

Upgrading Your Life

One of the biggest personal finance mistakes that I see young adults make is updating their lifestyle whenever they get an increase in income. This is a huge reason why I think why some millennials can’t save money. Get a new job that pays $10,000 more than your old one? Time to upgrade your car and move to a nicer apartment. I totally see the appeal in that- I mean, who doesn’t want nicer stuff? However, if you have the basics covered [like a reliable car and a decent place to live that’s not in a bad neighborhood], then you should strongly consider keeping your lifestyle the same so you can build up your savings.

Treat Yo Self

I’m a huge fan of the show Parks and Recreation- one of the famous quotes from that show is “Treat Yo Self.” Treating yourself is important- saving money is something that requires a lot of effort and you should reward yourself every once in a while. The key words are “every once in a while.” I think the trap that a lot of people fall into is treating themselves all the time. Instead of treating yourself 3-4 times a week to an expensive coffee or buying lunch at work, try scaling that back to once a month. Having something that you can look forward to is also part of what makes the “Treat Yo Self” splurge feel even more special.

Takeaway: This may come off as controversial, but if you’re on a really tight budget because you lost or your job, or if you already blew your budget for the month, consider scaling back the occurrences of Treat Yo Self. If you have consider Starbucks to be a daily Treat Yo Self, try scaling back to maybe ordering that pricey drink once or twice a week.


What are some other potential reasons why some millennials can’t save money? Do you think having a large amount of student loan debt excuses people from pursuing financial freedom?

 Why Some Millennials Can't Save Money-Navigating Adulthood

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  1. These are all such valid points. It is tempting to live in the moment, and did you know that a different part of the brain is triggered when we think of our future self? We think of our future self as a completely different person, which is why it’s hard to not give in to FOMO or YOLO!

  2. I agree with these points. We have to work even harder to teach the opposite what they are learning from their peers and society… Great post! I am following you now 🙂

  3. Yes yes yes YOLO is what’s killing savings for a lot of youngsters. They definitely feel like they need instant gratification and can delay their savings to when they’re older. But that’s without counting on the power of compound interest!

    1. Instant gratification is also something that could have made the list as its own category- with everything being at our fingertips [*cough, Amazon Prime] it’s hard to make yourself wait for something or plan for a long term goal- like retirement!

    1. It’s hard though! With a tough job market, I know that many people are working with a tight budget, so it can be hard not to spend money on experiences and things that almost everyone else seems to have. It’s great that you’re trying to stick with your budget- you’re waay ahead of lots of people!

    1. Car repairs are the worst! I feel like every time I go in for a “routine” car checkup, they always find something to fix. Yay for you for having a $1,000 rainy day fund- glad I’m not the only one who thinks it’s super important!

  4. As I get older, I really see the importance of saving money, but I must admit it is so hard! I definitely had the Treat to self mentality but lately I’ve been wanting to be more prepared for my future and retirement

  5. I’ve also come across people that think they can save later in life when they make more money. I’ve tried to explain the concept of compound interest but it was clearly lost on them. The thing that I see most of is that when people start to make more money the amount of lifestyle inflation that creeps in normally goes hand in hand.
    Mustard Seed Money recently posted…MY 2017 GOALS: RECAP #2 (Mid-Year)My Profile

  6. We have definitely fallen victim to the upgrade lifestyle trend. It’s crazy when I look back at how little we were making a few years ago and we were still able to save money whereas now I just wonder where our money is going. It’s definitely a good idea to stop and reflect to check back in on your financial goals and make sure all your purchases fit into your savings goals and future plans!
    Kuleigh recently posted…Aeropress Brew Guide – Inverted MethodMy Profile

  7. I hate spending money. So I’m really good at saving. Most of the year at least. At some point I’m in a total ‘Treat yo self’ mode hahaha

  8. Yep I definitely struggle with the FOMO phenomenon and the treat yo’self mentality! I also find myself constantly suggesting restaurants or coffee dates with friends which adds up really fast! BUT I do save a lot of my money and don’t have any loans so hey – it’s all about balance!

    Tori recently posted…Weekly RecapMy Profile

  9. Great post, student loans are a bitch and it seems they are making school more expensive as time progresses. I have pretty much lost all hope that I will pay my debt off, but the other things… I don’t participate in so much. I figured, the less I am involved in consumerism, the better.

    1. Student loans are something that SO MANY people deal with. I can’t believe how much tuition has increased since I graduated less than 5 years ago. Debt repayment is tough- if you haven’t done so already, I would highly recommend Dave Ramsey’s Total Money Makeover book.I actually got it as a wedding gift and it was SO helpful!

  10. I’m technically a Gen-Xer but this can apply to our generation too. These were definitely the reasons I didn’t really save money in my 20s: had student loans after grad school and had the FOMO and YOLO mentalities. I did not have a good handle on my finances until I was in my early 30s. I stopped caring about missing out on the cool parties, not travel as much, cut down on my spendings on clothes/shoes, and paid off my student loans.
    I hope that the majority of millennials will realize that they do not need others to tell him how to spend their money and create their own progress with their finances being one of their top priorities.

  11. AHHH I was just about to rewrite it last time. Oh sweet then I can reference it back to you!!! Excellent timing and idea Ying!!!

    For millennials I know, there’s a lot of them who has crates of makeup because they’re trying to look like Instagram girls with the highlighter/selfie pose/lifestyle. And all I see is growing credit card debt.
    Lily @ The Frugal Gene recently posted…12 Things I Stopped Buying That’s Saving Me Money & The PlanetMy Profile

    1. Thanks for the link in your post! And YES to makeup- I used to be a drugstore makeup hoarder [well, I had like 4-5 palettes, but that’s a lot for me] because I would watch hours of Youtube videos and feel smug that I was buying dupes for eyeshadow palettes that cost $50-$70. That backfired on me because I never had really good luck with drugstore eyeshadow. Now I have 1 nice palette that works for both work [when I meet partners] or when I just want to look nicer. It cost a bit more initially but in the long run, I’ve saved money!

      I don’t understand how people can spend $1,000 a year at Sephora. But then again, I’m usually too lazy to wear makeup, haha

  12. Love all of these! And most aren’t super harmful if done sparingly like you mentioned, but the issue with a lot of millennial I feel is just overindulging too much and way too often, especially with the FOMO/YOLO mentality!

    I think a lot of it too is that many people haven’t truly thought about their priorities in life, so in that way, everything is a priority and they can’t differentiate when they should or shouldn’t spend!

    1. Completely agree- moderation is key. You bring up a point that overindulgence seems to be a worrisome trend for some millennials. If you have your priorities straight and you also set up a solid budget, then there’s no harm in indulging every once in a while. 🙂

  13. This is such a great list! I know a lot of millennials are feeling crushed by student loans and want to just forget about it. But there’s no other way around it rather than paying them off slowly but surely.

    I actually have the FOMO and YOLO sometimes hehe. But I always have to remind myself such enjoyment is short-lived, and that I need to focus on the long-term goals. Short-term temptations are real!

    1. You bring up a fair point- a lot of millennials have a crippling amount of student loan debt and it impairs their ability to save. The job market has been tough and that doesn’t help with people being able to pay off loans

  14. I would argue one other reason is because they don’t know any better. I didn’t really get serious about my money until I was in my mid 20’s because then I realized what my priorities were.

    That being said, there were less flashy things to buy when I was in my mid 20’s

    1. This is a great point- there’s so much stuff to blow your money on nowadays. Amazon is definitely something I struggle with-I can have it all with free 2 day shipping!? It’s sad that some people don’t know enough about budgeting or money smarts. Hopefully with the huge number of excellent personal finance blogs, people can educate themselves. 🙂

  15. Yes! Haha- the first is definitely a problem, but looking at #2-5, I can’t help but shake my head… we have been so inundated with the idea that luxury is owed to us (Treat yo self and upgrade that lifestyle!) and that if we don’t go experience it now, we never will! Your life ends at 30… so YOLO and FOMO! Hopefully this post can steer a few people clear of the pitfalls we see all over today!
    Mrs. Adventure Rich recently posted…The Three Year Experiment’s Interview w/ Mrs. Adventure RichMy Profile

    1. I laughed a little when I read “your life ends at 30.” I know that this post might come off a bit harsh to some, but for people who are fortunate enough to have some wiggle room in their budget, I really think they need to prioritize debt repayment better. And you bring up a great point about this luxury mentality- it’s 100% ok to drive a crappy car!

  16. OMG yes! FOMO & YOLO are killing millennials! They have a fear of missing even the slightest things and think that spending whatever amount is money because they’re young and it’s fine. I never started making real progress until I stopped letting people tell me how to spend my money. Instead I started sticking to my money values and declining events I didn’t want to go to or didn’t want to pay for. #winning

    Great post!
    Lance @ MyStrategicDollar recently posted…Guest Post: A Beginners Guide To 401K PlansMy Profile

    1. Great points! I completely agree, I feel like a lot of younger people [who are probably around my age, haha] have this idea that it’s ok to be financially irresponsible now because they’ll magically get better about finances as they get older. I don’t think a lot of people realize that it takes practice and a lot of work to stick to a budget and form good money habits.

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