98: Millennial Couples & Money
Millennials and Marriage Statistics
Millennials have a way of mixing things up and pivoting away from what past generations considered "typical" mile markers in life. Millennials are less likely than previous generations to be married. Only 44% of millennials were married in 2019, compared with 53% of Gen Xers, 61% of boomers, and 81% of Silents at a comparable age (Pew).
And our marriages are more racially and ethnically diverse than in previous generations. According to Pew, more than one in ten married Millennials have a spouse of a different racial or ethnic background. Among married millennials, 8% of whites are married to someone of a different race or ethnicity. This trend is higher among Hispanic (19%), Black (18%), and Asian (16%) millennials. Roughly one-in-five black and Hispanic millennials who are married have a spouse of a different race or ethnicity. 13% of millennial marriages include spouses of different racial or ethnic backgrounds. This is significantly higher than the 9% of Gen X marriages that were multiracial or multiethnic (Pew).
Millennial Couples
There could be several reasons for this seeming "decline" in marriage. One reason is that we are less religious than previous generations and might not put as much of an emphasis on being married before cohabitation (Pew). Many millennial couples live together and create a life that doesn't involve marriage. Millennials are more likely than Gen Xers when they were younger to be living with a romantic partner (Pew). Another reason is that many of us grew up seeing the fallout of divorce and decided we didn't want to deal with its messiness. As a result, millennials are less likely to get divorced than previous generations. Experts estimate that the rate has fallen roughly 24 percent from its peak in 1981. This could be because fewer millennials are getting married. Another reason is that we are dating and living together for a more extended period before getting married. In the past, some of these long-term romantic relationships may have only been possible within the context of marriage.
Millennial women are also delaying giving birth or eschewing it all together (like me!). In addition to better access to things like birth control and abortion, it's also more common for millennial women to freeze their eggs to delay pregnancy and childbirth until later. As of 2018, approximately 55% of all millennial women had given birth. This birth rate is lower than the previous generations of women who had given birth at a comparable age. 62% of Gen X women and 64% of boomer women were mothers when they were ages 22 to 37 (Pew).
Millennial couples are struggling to get into the housing market. With record rates of student loan debt and stagnant wages, according to Apartment List, only 47% of millennials own houses, compared to 69% of Gen Xers and 78% of baby boomers.
When it comes to emergency savings and millennials, the stats are mixed. A 2021 Bankrate survey found that 57% of millennials either had no emergency savings or couldn't cover three months' worth of expenses. That compares with 44 percent of Generation X and 49 percent of boomers. For the good news? The same survey found about 1 in 5 millennials, or 19%, had enough emergency savings to cover at least six months of expenses.
4 Reasons Millennial Couples Can't Stick to a Spending Plan
Millennials have good reason to be skittish about their finances. In my work as a financial therapist and emotionally focused financial coach, I see four common reasons that millennial couples struggle to create and stick to a spending plan. I have four quick tips to help couples cope with these four sticking points.
Reason 1: Avoid Talking About Money. Millennial couples fear talking about money. They think it'll be a turn-off, boring, and maybe even lead to an argument. So instead, they put it off, hoping that the money stuff will sort itself out and they won't have to bring it up.
Antidote: Plan regular money dates. Talking about money regularly can prevent big financial issues from boiling over.
Reason 2: Budgeting Feels Restrictive. Budgets popularized by the talking heads in personal finance are incredibly prescriptive. They tell couples to stick to pre-determined percentages of how much money they should spend and save each month with no regard for the financial realities of millennials. Because of this, many millennial couples have tried budgeting but have been turned off by them, feeling like they've "failed" at adhering to someone else's financial rules.
Antidote: Reframe restrictive terms to expansive ones. Instead of calling it a "budget," try "spending plan." While the functionality is the same, making a subtle shift can feel more financially empowering.
Antidote: Find a spending plan that works for them. In my book, "The Financial Anxiety Solution," I share several examples of spending plans to try out, including the 80/20, Kakebo approach, and the no budget-budget.
Reason 3: Financial Procrastination. Millennial couples are good at finding reasons to postpone creating a spending plan. It usually sounds like, "we'll do X once we Y," aka "we'll pay off debt once we get a raise," or "we'll save up for an emergency fund once we file our taxes."
Antidote: Take small, meaningful financial steps. If working on a spending plan, start by tracking spending for a week. If a couple is considering buying a house this year, review credit reports and scores together.
Reason 4: Planning Feels Fraught. Great Recession? Housing Crisis? Climate Change? Pandemic? As millennial couples, planning anything can feel pointless when subjected to so much uncertainty.
Antidote: Practicing financial self-care is a remedy to uncertainty. Start by saving up an emergency fund, then move toward other financial goals like investing in retirement accounts, paying down debt, saving for a down payment, etc.
Positive Financial Facts About Millennials
Millennials are values-driven. When it comes to spending, positive financial facts about millennials are that we prioritize spending on travel (we love taking our vacation days), charity, experiences like good food and beverages, and sustainability. Here are a few numbers that highlight our strengths:
Despite earning less than older generations, 50% of millennials donate to charity at least once a month compared to 34% of boomers.
Prioritize our vacation time and take 35 days off a year.
Enjoy our travel and spend between $4,000 and $5,000 on trips per year.
Love food and happily spend 47% of their total food spending on dining out or take-out food.
Millennial Couple Financial Case Study
Amar and Naya are a heterosexual millennial couple in their mid-30s. They cohabitate in a rental in a mid-size city with their dog and no children, though they would like to start trying for a child in the next year or two. They donate monthly to a local environmental community organization. They briefly entered the home buying market in mid-2020, but after a few rejected offers, they decided to keep renting until the market cooled off. In the meantime, they prioritize saving up money each month to take a big annual trip together. A sticking point for them financially is student loan debt and whether or not they want to get married. They both have sizeable debt but get uncomfortable talking about it, so it remains the elephant in their relationship. (This is a fictitious case study. Any resemblance to actual persons, living or dead, or actual events is purely coincidental)
Clarify Your Money for Millennial Couples
Agreeing on a spending plan is the foundation of cultivating a shame-free relationship with money in your romantic relationship. For millennial couples, I'm going to bring you a self-paced course to help you understand how your emotions and values impact your relationship with money. Clarify your Money helps millennial couples create a values-based spending plan that works for their unique situation.
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We are continuing with this month's theme of couples and money. And today we're going to be talking about millennial couples and money specifically. So if you are listening to this in real-time, millennials are between the ages of like 27 and 41. Or in other words, they're born between 1980 and 1994. Of course, this episode could be relevant to you if you are a little bit outside of those, kind of, dates. But I wanted to spend some time just talking about what makes our generation, I'm saying our because I'm a millennial, I fall squarely into that age bracket, what makes our generation so different than other ones when it comes to our relationships and how it impacts our personal finances. So I'm going to share some statistics about millennials and marriage about millennial couples in general, some things I see in my practice about what keeps millennial couples stuck when it comes to moving towards a spending plan. And then also just to like some good things that us millennials do with money. So there will be some, some statistics, some tips and some things that you can kind of consider as you move toward values-based spending in your relationship.
So let's start off with some millennials in marriage stats. Just to kind of back up here. I studied sociology, back in the day when I was in college, and I just have such a love for the Pew Research Center. So a lot of my stats today come from Pew, everything, all the stats that I share today are going to be linked. So if you want to head to the show notes, that's again, wherever you're listening to your podcast player, tap on the information about this particular episode, there will be a link to my website that will bring you directly to the show notes. And that will have a blog-style write-up of this episode. And then you can find all of the different places where the stats are linked. If you're like me, and you're kind of a data nerd.. So anyway, on to millennials in marriage--No surprise, millennials are less likely than previous generations to be married at a comparable age. So in 2019 44% of millennials were married compared to 53% of Gen Xers and 61% of boomers. And if we go even higher than that 81% of the silent generation. And this is very different than generations past. It's not like a downtick of a few percentage points, this is almost a 10 percentage point difference in one generation. That is a big difference here. And there could be a bunch of different reasons for that. I think so many of us grew up with parents, who were divorced, or we had family, friends and friends whose parents were divorced. And we saw that and we decided, you know, maybe we want to do things a little bit differently. We are also less likely to be religious than other generations, even though we are we're not completely atheist, a lot of us identify as agnostic or spiritual. So I think there's less of this taboo of like moving in together. And that moves into how couples millennial couples today are more likely than the generation before them, Gen Xers, to be living with a romantic partner without marriage. And Millennials are delaying marriage could be for a number of reasons, right could be for financial reasons, could be that they want to like wait and see could be that like, you know, they've got student loan debt, there could be a million different reasons why. But as millennials delay marriage, we're more likely to live with a romantic partner in an unmarried capacity. So we're just less likely to get like all bent out of shape about living together before marriage. We are also more likely than other generations to marry somebody of a different race or a different ethnic background. And this is actually higher among folks who identify as Hispanic black or Asian Millennials are much more likely to marry somebody of a different race or ethnicity. And so as you can imagine, when this comes to money, this could also be different in that we have different cultural baggage that we bring into our relationship if we are coming from different racial or ethnic backgrounds. And because we are putting off all of the traditional house kids marriage baby stuff, we're less likely to get divorced than previous generations. It's hard to track this, but when you kind of compile all the data, and you take experts who kind of track marriage statistics and divorce statistics, experts estimate that the rate of divorce has fallen 24% from its highest peak back in 1981.
So that's millennials and marriage, but when it comes to millennial couples, what's interesting is that we have these interesting financial touchstones that other generations may not have had. One is birth rate. And I know you might be thinking, what does that have to do with money but for any of you who have kids, you know, that has everything to do with money because kids are frickin expensive. In 2018 55% of millennial women had given birth compared to previous generations of women who'd given birth at that same age. So 62% of Gen X women had babies at the same age and 64% of Boomer women were mothers when they were between the ages of 22 and 37. And so for millennials, between those ages, only 55% of them had had babies. And so again, look at this difference. It's only a 2% difference between Gen X and Boomers. So the birth rate was pretty similar. But for millennials again, this is a huge jump. This is like a 10% gap between Millennials and Boomers, which is two generations different. So we're delaying marriage, we're living together more frequently. And then we are delaying giving birth or choosing to not give birth, right? I am proudly child-free by choice and won't be giving birth, if all goes according to plan. But there are so many different reasons for this that I'll get into in a little bit. And this can also impact our finances, if we are delaying giving birth, whether you want to have children or not the sadly, the biological markers of giving birth don't really care about your reasons for it. It's so gross. But once you turn 35 My friends who are 35 and older, and you get pregnant, you're considered a geriatric pregnancy. Like what so gross, so annoying. But if you are waiting to give birth, you may be spending more money on other treatments like in vitro fertilization. I know many friends of mine who are in their mid-30s are freezing their eggs because they're not ready to give birth right now, or they don't have a partner that they're comfortable giving birth with or they're not ready to raise a child on their own. So they're freezing their eggs to kind of buy themselves a little bit more time if having a biological child is a priority for them. When it comes to housing, not as many of us own houses as our Boomer and X-er peers, no surprise. So controlling for our age 42% of millennials own homes at age 30. Whereas 48% of Gen Xers and 51% of boomers owned homes at the age of 30 This is according to Apartment List. And when you look at it, like in this current snapshot of time, 47% of millennials own houses 69% of X-ers, own houses and 78% of Boomers own houses. It's just wild out there how different that is and how interesting it is that so much of like wealth building information is revolving around the importance of owning a home. But now homeownership has become so, so difficult for so many of us. And speaking of just like financial safety nets, 57% of millennials between the ages of 25 and 40. Again, all these studies kind of tweaked millennials, it was a little bit interesting to try and kind of control for that. So according to Bankrate, 57% of millennials had no emergency savings or could not cover three months worth of expenses compared to 40% of Gen Xers and 49% of boomers. So that means almost 60% of us could not make it three months if we lost our jobs.
So when it comes to what I see in my work with millennial couples, there are four main reasons that all these statistics kind of stack up and make it really hard for us who are millennial couples who are trying to manage our spending cohesively. We avoid talking about money. Talking about money feels like really restrictive or maintaining a spending plan feels really restrictive. We have these little like white lies, we tell ourselves like, Oh, I'll do it when I earn more. And we're living through so many once-in-a-lifetime events. So let me break these down. Millennial couples, like all couples, fear talking about money, we think it will be a turn-off, we think it'll be boring, we think it might even lead to an argument. And so we kind of tell ourselves like, We'll talk about it later, we'll wait until like, we have to talk about it. And it can just become this huge elephant in the room. And this cycle that I see with so many couples is we don't talk about money because it makes us fight. So what we do is we don't talk about money at all, until we have to until you know one of us loses a job, until one of us gets a flat tire, until one of us maybe gets a pay raise or one of us forgets to file taxes or whatever it may be. And we're waiting to talk about money until it's already a stressful event. And then what happens? It becomes a self-fulfilling prophecy where we don't talk about money because we think we'll fight about it, we wait to talk about money until we're already heated, and then we bring it up big explosion, and then we say see, can't talk about money and makes us fight. And that is such a dangerous pattern to get into. And you're not alone, so many of us get in that rut. So working on talking about money at a regular cadence can be so powerful and so important. So that you can have this mix of healthy money conversations, and you know, some tense wedding conversations, but they don't have to all skew towards being heavy and intense and argumentative. Another reason is that budgeting feels so restrictive and budget plans that have been fed to us by you know, dudes who tell us that lattes and avocado toast are ruining our lives are so wildly out of touch. And when we think of budget, we think of like restrictions and being told no. And also like these numbers that they throw out there just do not make sense, given the rapid rate of inflation and wage stagnation. Wages have not gone up. when adjusted for inflation for 40 years, I'm gonna say that, again, wages have not gone up when adjusted for inflation in four, zero years. So somebody who is, you know, in their 60s or 70s, telling you how to manage your money has no frickin clue what it's like to try and manage money now, because inflation and wage stagnation together have just been this double whammy of pain and frustration and an inability to kind of get ahead. And so when somebody says something ridiculous, like, you can't afford a latte, or you should only spend 20% of your income on housing, it's like, bro, you have no frickin clue. You could buy a house for 80 grand back in the 80s--that does not exist anymore. We are in total different universes. So when we try to do budgets, according to people who have no clue about what Millennials are facing, it makes us feel like we are failing or we're bad at money or that, you know, we can't enjoy things right? It's so irritating. And that's why I've said it on here. And I'll say it again. I prefer to reframe jargon terms that feel gross or punitive or just out of touch. So for me, I prefer the term spending plan Does it have the exact same function as a budget? Of course it does. But it's me managing my money and deciding where I will be spending it and that feels so much more empowering. And it feels less reactive and more proactive. Another reason that millennials struggle to stick to spending plans is the kind of wait to do it until x happens. Like we'll wait to pay off our debt until we get a raise, or we'll save for a vacation after we pay for a car or we'll save up for a downpayment once we get our tax refund. There's always this kind of hedging waiting for something else to happen before you will start taking action now. And this is procrastination one-on-one. It's not our fault. Our brains were evolved to be protective in this way. That's why we procrastinate that's another story for another time. But we keep finding reasons to postpone getting things started, which gets in the way of us getting started. It's this thing that I shared with my newsletter community a couple of weeks ago, you can't steer a parked car, you keep waiting for every single thing to fall into place before you start moving forward with a spending plan, or picking one thing to figure out and to start working on, you want to have all of your ducks in a row before you get going. Instead of like, we're going to start with this one thing and see how it goes. And the final reason I see millennial couples struggle to stick to spending plans is living through multiple once in a lifetime events, great recession, housing crisis, climate change, pandemic, it can feel so fraught, to try and plan anything when everything in our lives has been just loaded with uncertainty. And so it can feel so ridiculous to say like, oh, yeah, I'm gonna save up for a downpayment when, you know, sea levels are rising at these rapid rates, and the right not even be a house available for us to buy.
I'm being a touch dramatic, but also not really. So what can we do, we can engage in healthy money conversations, we can reframe words that don't align with us, we can start taking action, knowing that we can cope with making mistakes. And we can start saying I will do X with my partner, or we will do this together, even though we are dealing with all these once in a lifetime events, because the reality is, what has happened with everything that we've seen in our lives is really the only certainty is uncertainty. And I don't say that to be like, Oh, the sky is falling. It's so dramatic. But it's also like, if we know that shit is going to be bananas all of the time, then we have to do what we can to protect our financial futures. And that means taking action towards the things that honestly we know we should be doing. Most of us know we should be saving more than we spend. We know we should have an emergency fund. We know we should be saving for short-term goals and investing in retirement. But it can feel really like what's the freaking point, if the sea level is rising, we have this wild pandemic that is just, you know, no, everybody's decided it's over. There's a housing crisis. And, you know, wages have not gone up, et cetera, et cetera, et cetera. I've already covered all of that. But what we have to do is create a little bit of certainty. And that means finding little ways to carve out safety nets as millennial couples. So I shared some things we can do.
Let's also talk about some of the good things about millennial couples and money. We are driven by our values. We prioritize travel, we prioritize charitable giving. We are proud of foodies, and we love to spend on food and beverage and experiences. And we also value sustainability. When it comes to charitable donations. 50% of millennials donate to charity at least once a month, compared to 34% of boomers, despite the fact that we earn less money than boomers and that we have all of these different things coming our way. We just that feels really important to us. We were raised on the values of giving back, we know what it's like to kind of been dealt a shitty hand. And so when we have the capacity to give, we give and we do it with frequency. When it comes to taking care of ourselves. I mentioned that we love to prioritize travel. And right and I think along with travel comes experiences, but it also comes rest. According to Expedia, millennials take off 35 days a year compared to older generations. We are not the ones who are like, Oh, shoot, should I really like save those extra five vacation days and prove to my boss that I don't need it? It's like no, we're like, we know nobody has our back. So if we have extra PTO, if we have that time off, we are actually taking it good for us. And when it comes to spending money, when we take that time off, we spent we spend between $4,000 and $5,000 on travel per year. So $4,000 is kind of the mid-range according to AARP and $5,000 is like, they call them the affluent Millennials according to TripAdvisor. So we love to spend on experiences and with those experiences, we happily spend our dollars on dining takeout--we spent 47% of our total food spending on Dining Out or takeout food. Wow. And to me that also goes to show like we just don't have a ton of extra time and even if we'd love to cook like we are just, we're in this interesting sandwich generation and where we are oftentimes starting to help out our aging parents or caregivers with things, they might not necessarily be in homes at this point, but they might need a little bit of extra help like around the house, they might need an extra like set of ears when they're at doctor's appointments. And a lot of us even though we're delaying parenthood, we are parents or aunties or uncles, and we're helping out with our siblings. And we're donating to charity, we are doing all of these good things. So it means we might not be spending a ton of time like chopping up fruits and veggies and cooking. But we are very happy to spend on Dining Out. And when it comes to sustainability, we know how dire things are. And because of that, we are much more likely to care about spending on sustainable things. And so when it comes to how I see this play out with things like homeownership and planning for retirement and our emphasis on travel as millennial couples, it's like, it's so much easier to save up $3,500 or $5,000, to take a trip than it is to save up like $80,000 or $50,000 for a down payment on a home. And it's like when it comes to our brains, we do tend to do better with like quick hit rewards. So saving up for six months to take a trip is much more attainable than saving up for years and years for a house that may go up another 10-20% like we've seen in the last two years that ends up being, you know, seemingly futile, to save up for something that might not actually be attainable for us.
So all that to say, we have different experiences, different values, and we are living differently than the personal finance gurus of yesteryear are screaming at us that we need to be doing. And because we value our values, I don't know how to phrase that. That is why I'm so excited to bring to you all Clarify Your Money for Couples, and it's a six week live course specifically for millennial couples that takes all of this data that I shared in today's podcast, and actually gives you the values-based how to the Emotionally Focused way to cultivate a shame-free relationship with your money. So that in your romantic partnership, you can really say This feels good for us spending in this way, saving in this way. And managing a spending plan like this in alignment with our values, check, check check that feels good. Instead of saying you need to spend 15% here and spend 20% here and save 30% here like we can't do that, because it just does not work for us. So I'm getting ready to launch it, please put your name on the waitlist, MindMoneyBalanced.com/Clarify. As a reminder, if you missed last week's episode, the reason that I'm doing a Clarify your Money course for millennial couples is that my waitlist is full. And I've decided I'm not taking on any new couple clients because so many of our the first sessions that we do together are identical. And so this is a way for me to help out more people than I could in a traditional psychotherapy practice. And it's like I get this stuff. I'm a millennial. I work with millennial couples all the time. And folks who skew a little bit older, a little bit younger. And I know the different things that get in the way. And I know that you just don't want to be like handed a spending plan and told to rigidly stick to it. Because if you want to do that you could have there are a million different budget spreadsheets you can google and download your millennial. I know you know how to do that stuff.
I hope you enjoyed today's episode on Millennial couples and money. Next week we'll be talking about financial goals to be considered in your 30s and 40s. Of course, this is not like a hard and fast rule. These are just things to keep on your radar. So I again, invite you to add your name to that waitlist MindMoneyBalanced.com/Clarify
I'll see you next week as we continue this theme of couples and money.
Transcribed by https://otter.ai