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Millennials: What College Didn't Teach Us

Millennials are exceptional. Our generation is responsible for the upswing of social media, Uber and countless other service apps. We’re at the height, or approaching it, of a new technology based world that promises opportunities.

But with that comes competing with each other (literally millions of us) to get a small sliver of the pie. Example: there were 40,000 applicants for a Google summer internship with 1,500 openings. That is 3.75% of those 40,000 will get that opportunity.

Companies have the upper hand of getting the best and brightest at little pay, while the other 96.75% contemplate what our degrees are actually worth.

Some of us picked a lucrative major (accounting, finance, business administration etc.) and still virtually start from the bottom doing sales, or temp jobs at $11/hr, slightly more than a supervisor at McDonald’s.

Some chose more liberal majors like English or Art and end up doing nothing that relates to their field when coming out of college, because bills need to be paid and urgency is of the essence

Some of us chose majors in medicinal and psychological fields. Chances are no one told them that after you acquire tens of thousands of dollars in undergraduate debt, that to even be considered for a well paying job in those fields, that you will need a graduate degree or certification, which (shocker) will probably put you more in debt unless you are a part of the “lucky” few to have grants.

In case you’re wondering why the word “lucky” is in quotation marks, it’s because to be applicable for most grants, you or your family must be in an unfortunate situation in which the government will attempt to offset that financial stress. Now this is not to say that there aren’t academic grants and scholarships available for students regardless of your at home situation. However there is a large number of Millennials where their parents make just enough to not be considered underprivileged, and whose grades are shy of the top 1% to be awarded financial assistance.

And the “lucky” ones aren’t always so lucky. There are students who have the majority of their tuition and residence fees covered, work at least 2 jobs while being a full time student and still graduate with over $20k in debt. Some might ask, how is that even possible? Well let’s take a quick look at the math.

§ If a student gets 75% of a 40k annual tuition covered through government assistance, then the student is still responsible for $10k a year. Multiply that by a typical 4 year degree, and add in the annual cost of books, board, technology fees etc. This student will graduate with at least $40k in student loan debt, even if their multiple jobs cover the cost of books and increasing campus fees.

§ Some might say, well why don’t they just go to a less expensive school? Let’s look at that scenario. Say a different student going to a state college manages to get their dormitory fees paid, and is awarded enough grants and scholarships to get 70% of their 25k yearly tuition off their plate. They’re responsible for $7,500 annually in tuition. Again multiply by 4 years, add in the cost of books and university meal plan, and we’re looking at least $30k in undergraduate debt.

And a quick reminder, these are the “lucky” ones. Truly lucky millennials are fortunate enough to have their parents/ family pay for the education, or have a full ride scholarship. Experience has proven that the truly lucky are few and far between.

Millennials have more degrees and accreditations than any other generation before us. Then why are chips stacked against us with rising tuition, restrictive financial assistance, and debt in which bankruptcy can’t even help us get out? Paying the minimum payment will clear the debt close to the age of 52. However, by paying just the minimum payment, we pay an average of double the initial principal For example, a $40k student loan at a 6% interest rate with a 30 year pay off period, the borrower will actually pay more than $86k by the time it’s paid off.

There’s been a lot of talk about the “Student Aid Center” program issued by the U.S. government. One of the opportunities is “income based repayment.” The cliff notes version is if you make under a certain salary for about 25 years, then your student loan debt is wiped clean. The salary, for which you would have to not exceed, in order to be considered for this plan, is astronomical. At that salary, student loans would just be the tip of the iceberg. What about owning your own home and comfortably supporting a family? Not saying these things can’t be done on that salary, but you would have an extremely high mortgage interest rate, where the goal of not being owned by the bank is unattainable. Add student loans and supporting a family to the mix and some will feel like they’re drowning slowly in a pool of quicksand. But good news, you won’t drown as fast once you’re almost 50, because then the government cuts you break and wipes away the debt you acquired to get an upper leg in the job market in the first place. To those millennials that do it, and are struggling through, I commend you and can only hope our government comes to their senses.

However in a sea of despair, there are Millennials that are paying off their student loans before the age of 30. Some Millennials are travelling around the world, with the financial welfare to do so. It can be done. You won’t find all the answers here, but here a few that I’ve acquired in my observations:

§ Take advantage of living at home (low rent or rent free)- about 30% or more of income is dedicated to just having a roof over our heads. Imagine where that 30% could go if it went towards chipping at a mountain of debt

§ Get a roommate and chop the rent in half- If living at home is not an option then go back to the college days of sharing a room with someone you’re close to. One bedroom apartments (depending on your area) can range from $600/ month to over $1,000/ month. No matter which way you slice it, $300 to $500 a month is a lot better than paying the rent and utilities on your own. A one bedroom apartment with a separate living room and kitchen might be just enough space to keep the peace. If you see a good two bedroom deal, then even better, but once again make sure it’s someone you know well and can talk to openly. Nothing is worse than passive aggressive behavior and not having peace in your own home.

§ Take inventory of your money- look at how much money you bring home each month, and how much your bills total each month. Then factor in transportation and food. How much money is leftover? And here’s a better question, where is that money going? We need shelter, food, and means of getting to places to survive in this world. Everything else is just gravy. If you have any money leftover, then take 80% of that amount and put it away in your savings. Even something as small as brown bagging your lunch can make an impact. For example, if you spend $8 on lunch a day, by bringing food from home you can save $160/ month or almost $2,000/ year. Give yourself a buffer to have a night out every couple weeks, or treat yourself to whatever your indulgence might be, but doing those things less often will definitely make a difference in your pocket.

§ Look at every monetary decision as an investment- Take care of your business…you. You are the most important asset in this business called your life. Why should any money going out not serve to benefit the business? The answer is it shouldn’t. Start with your largest variable expenses. For example, do you really use your unlimited data plan? If most places you’re reside have wifi and over the course of the month you don’t use more than 2GB of external data, then maybe you should switch to a cheaper plan. Is having access to all the cable channels really worth it? You could probably watch your favorite shows the day after it airs, online for free, or binge watch your favorite series on Netflix, Hulu Plus or Amazon Prime. $10 a month streaming service plus a $50 basic cable package sounds a lot better than a $100+ cable package. That’s a $40/ month savings which equal almost $500 saved a year. Just saying.

§ Set reasonable goals for yourself- We’ve all heard this a million times, but that’s because it works. A goal of being debt free in 6 months might be attainable or unrealistic depending on your situation. Base your goals on how much you can save monthly. If you need a down payment of $1,500 for a car, and your monthly savings are $75/ month, then set the goal of having your car in less than 2 years. Have a picture of the car as your phone background to remind you of why you might skip this one party. It’ll be worth it once you get those car keys in your hand.

Lastly, enjoy your life and remember you’re doing okay. Sometimes I have to be reminded to get off the hamster wheel and stop and smell the roses, which is the best advice when done in moderation. Millennials we will get through this, just remember spend wisely and save freely.

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