Crippling Debt Prevents Millennials From Saving For the Future

The most counterintuitive, surprising, and impactful new stories delivered to your inbox every Thursday.

Bouree Lam over at The Atlantichas a piece up right now under the precarious header “Why Aren’t Millennials Saving Money?” Lam presents three major reasons to answer the question. The first is that millennials don’t trust financial institutions:

“One study named the financial industry as one least liked by Millennials—with Bank of America and Citigroup being the most hated.”

And remember: this is a world in which Comcast exists. Still, after coming of age during the Great Recession, and seeing how pretty much everyone suffered except for the corporate clowns who caused the crisis, it’s not outlandish for young people not to want to associate with these businesses. Young people don’t like banks. Banks are usually important for savings and investments.

The second reason is the real kicker — debt, debt, and more debt:

“A Wells Fargo survey of Millennials reported that 47 percent spend at least half their paychecks relievingvarious kinds of debt (credit card, mortgage, student loan, etc.). With student loan debt in the U.S. hitting the $1 trillion mark, Pew reports that 37 percent of U.S. households have student debt, with the median debt standing at $13,000.”

That’s certainly not good.

The student debt crisis is a major issue that, if unaddressed, could cripple an entire generation. Millennials’ financial limitations are keeping them in a perpetual state of arrested development. Young people with tens of thousands of dollars in debt don’t get married. They don’t buy homes. They don’t support an economy that desperately needs them to do well.

It’s going to take some major governmental intervention to right this ship, lest the entire economy eventually collapses beneath this weight. Young people need allies in Washington D.C. to advocate for this cause. That’s why it’s a good thing all those millennials showed up to vote, right?

Finally, the reason millennials aren’t saving money is because what money is there to save? The fact that half of a millennial’s paycheck goes toward paying debt buries the lede that a millennial’s paycheck is pitiably paltry. The economy may be in recovery but the effects are hardly felt on those who really need a jolt. Yet hiring is still not where it needs to be, costs of living are going up, wages are not, and unemployment among young people is still way too high.

So why aren’t millennials saving? On one hand, saving is hard. On the other, saving what you don’t have is harder.