“When I was trying to buy my first home, I wasn’t buying smashed avocado for $19 and four coffees at $4 each,” an Australian millionaire quipped in 2017 (theguardian.com). His implication was clear: if young people just cut frivolous spending, we’d have an easy path to homeownership and wealth.
If only it were that simple.
As a Millennial myself, I’ve felt the sting of these comparisons to our Boomer parents’ generation. We’re often told that hard work and savvy budgeting should yield the same results they enjoyed. So why does it feel like we’re running a financial race with ankle weights that our parents never wore?
In this article, I want to talk through the real reasons (beyond the avocado toast clichés) that so many Millennials are struggling financially compared to our Boomer parents.
Spoiler: it’s not because we’re lazy or buying too many lattes – there are deeper economic shifts at play, and understanding them can be surprisingly validating.
Hard work doesn’t pay like it used to
“Hard work does not pay off like it used to,” said Paul Kershaw, a Canadian policy professor who founded the advocacy group Generation Squeeze
He’s not just waxing poetic – he’s pointing to a troubling reality. For Millennials, wages simply have not kept up with the cost of living. Our paychecks simply don’t stretch as far as our parents’ did.
Don’t believe me?
Consider this: since 2000, the prices of goods and services in the U.S. have risen about 67%, yet median household income (adjusted for inflation) has inched up only 7% total – that’s a meager 0.3% per year in real wage growth. In other words, everything’s gotten pricier, but our earnings barely budged.
Think about the basics. Housing, food, health care, education – these are not exactly optional expenses, and they’ve all ballooned in price. Sure, some everyday items are cheaper now (TVs might cost less than they did decades ago in inflation-adjusted terms). But you can’t swap a flat-screen TV for a month’s rent. As the folks at Business Insider have pointed out, it’s the big-ticket essentials – homes, college tuition, medical costs – that have exploded in cost, creating a heavier burden for Millennials. No number of skipped brunches will offset the fact that your rent in 2025 might be triple what your parents paid at your age.
To put it bluntly, many of us did everything “right” – got degrees, secured jobs – and still find ourselves living paycheck to paycheck. It’s not for lack of effort or work ethic; it’s math. When your salary grows sluggishly but your bills climb rapidly, it’s a recipe for feeling stuck.
And it’s not just in North America. In the U.K., researchers noted that Millennial cohorts were the first to see no income progress compared to the prior generation in the years after the 2008 financial crisis
And in Australia, analysts are calling 2012–2022 the nation’s “lost decade” of wage growth – young Aussies effectively missed out on about $54,000 in earnings in their early careers due to wage stagnation, which would have been enough for a home down payment. Those are huge losses that no amount of hustle on an individual level could easily overcome.
If you’re feeling like your paycheck disappears faster than it arrives, you’re not alone – and it’s not your fault. The rules of the game changed between our parents’ time and ours. Boomers grew up in an era when one breadwinner’s salary often could support a family. For many Millennials, even two incomes struggle to afford the basics today.
Hard work still matters, of course, but the financial deck is stacked differently than it was 30 or 40 years ago.
Homeownership out of reach
I’ll never forget the day I asked my mom how much she and my dad paid for their first house. “$68,000,” she said, for a suburban three-bedroom in the early 1980s. I nearly dropped my coffee.
That wouldn’t even cover a down payment on a starter home in many markets today. And it’s not just an anecdote – the data paints the same stark picture. When the average Baby Boomer turned 30 (around 1985), a typical U.S. home cost about $82,800. When the average Millennial hit 30 in 2019, a comparable house cost around $313,000. That’s nearly four times more.
Even after adjusting for inflation, housing is far more expensive now. In fact, experts have noted that if home prices had only risen at the general inflation rate since 1970, the median American home in 2022 would have cost about $177,000. Instead, the actual median price was roughly $408,000
Wrap your head around that – houses cost well over twice what they “should” if they merely tracked broader inflation.
No wonder it feels like homeownership has become a distant dream for many of us. What was once almost a rite of passage by one’s late 20s or early 30s (buy a house, start a family) has turned into a saga of saving for a down payment well into our 30s (or 40s) while watching prices climb even further out of reach.
For Millennials who have managed to buy homes, I tip my hat – it often required dual incomes, sacrifices, or help (such as family assistance).
The student debt trap
Another major difference between us and our Boomer parents can be summed up in one word: debt. Specifically, student loan debt – a financial hurdle most Boomers never had to clear to the extent we do.
My dad likes to tell me how he paid his state university tuition by working a part-time job at the grocery store. It sounds almost like folklore today, but it’s true: college was so much cheaper back then that a summer job could cover a year’s tuition. In 1970, the average annual tuition at a U.S. public university was about $394 – yes, under $400 for a year of college. Fast-forward to the 2020-21 school year, that average was about $10,560.
That’s a 2,580% increase in nominal terms. Even after accounting for inflation, college costs have massively outpaced general inflation (For context, overall inflation was about 567% over those 50 years).
The result is that many Millennials began their working lives already in a financial hole, carrying tens of thousands of dollars in student loans. It’s a stark contrast to many Boomers, a large share of whom either paid very modest tuition or attended university when public colleges were heavily subsidized (some even effectively free).
Consequently, more students have to take on larger amounts of debt to get a degree. And the numbers are sobering. In the U.S., the total student loan balance has ballooned to over $1.6 trillion in recent years.
Instead of starting off at zero, many of us started our 20s at negative $30,000 (or -$50,000, or worse). Making up that ground while also trying to pay rent, afford today’s home prices, and maybe have a family – it’s a tall order. It often feels like we’re running a race and our feet are stuck in mud from the get-go.
On a personal level, I have friends who are well into their late 30s and still chipping away at student loans. That affects life choices: some delay marriage or having kids; others avoid any additional training or grad school because they can’t fathom taking on more debt. It’s a far cry from many Boomers who either didn’t need to borrow for college or paid off small loans quickly in an era of higher early-career wage growth.
The psychological toll is real too – it’s hard to feel like a financially secure adult when you get a reminder every month in the form of a loan payment that essentially says, “You still don’t own your education.”
A changing job landscape
Remember the old notion of the “30-year career at one company with a gold watch at retirement”? That was never a guarantee, but it was a lot more common in our parents’ era.
For many Boomers, the career path was relatively straightforward: get a stable, full-time job with benefits, stick with it (climbing the ladder over decades), and rely on the company’s pension or retirement plan at the end. For Millennials, that story sounds like a fairy tale. The modern job landscape we came into is far less stable and far more fluid – by necessity, not just by choice.
By the time I hit my late 20s, I had already worked at a number of different companies and done countless “side gigs.” And I’m not an outlier. According to some sources, almost half of working Millennials are freelancing in some capacity.
Part of this is driven by our own search for meaningful work or flexibility, sure, but a lot of it is just how the labor market evolved. Stable, full-time jobs (especially ones with good benefits and pensions) became harder to find, so we patched together income however we could.
We’re the generation of the side hustle by necessity: driving rideshares, selling on Etsy, coding on a contract basis, picking up shifts at the coffee shop on weekends even if we have a weekday desk job. It’s not because we’re fickle – it’s because economic security now often requires multiple streams of income.
The psychology of work has changed, too. We came of age hearing that we should “do what we love” and prioritize work-life balance (lessons perhaps learned in reaction to Boomer workaholism). But chasing meaningful work sometimes meant taking lower-paying paths or unstable paths (like the arts, non-profits, startups, etc.), whereas a Boomer might have felt secure taking a corporate job and staying there.
I personally left a ‘normal’ job in my 20s to pursue a passion project and ended up freelancing for years. It was rewarding but also financially nerve-wracking. Many of my peers have similar stories – the traditional secure route just didn’t materialize, so we made our own route, risks and all.
Bad timing and economic storms
Beyond wages, housing, education, and jobs, there’s another factor that often gets overlooked: timing. Simply put, Millennials had the bad luck of coming of age during some major economic storms.
If you graduated college around 2008–2010, you walked straight into the Great Recession, one of the worst economic downturns since the Great Depression. Job markets were brutal. Companies were freezing hiring or laying people off. As a 20-something with little experience, you were often the last one in (if you got in at all) and the first one out. The unemployment rate for young adults spiked, and those years of lost opportunities have lingering effects on our earnings and wealth.
Research backs this up. One Stanford study found that recession graduates can see their financial growth stagnate for up to 15 years compared to those who graduate in better times
In practical terms, that might mean you never quite catch up to the salary level you would have had if you’d started in a robust job market. Many Millennials took jobs that paid less, or weren’t even in their field, just to get by in those early years. That can set you back in terms of career progression and earnings.
As if one recession wasn’t enough, Millennials got hit by another shock in 2020: the COVID-19 pandemic. By that time, many of us were in our 30s, perhaps a bit more established, but it was still a heavy blow. Industries like hospitality, travel, arts, and retail – where Millennials are a big part of the workforce – were pummeled. Some of us bounced back; others once again found ourselves starting over.
Boomers, in their prime working years, certainly faced recessions too (1981-82 was severe, 2001 dot-com bust, etc.), but the key difference is when those recessions hit in their lives. The 1981-82 recession, for example, affected younger Boomers, but many still benefited from the strong late 80s and 90s that followed.
The Great Recession nailed Millennials right at the start or in early-mid career, compounding with all the other trends we’ve discussed (high debt, high costs). It’s like running a marathon and hitting a wall at mile 2 and mile 15.
I think it’s fair to say that timing has also impacted asset growth. Boomers were fortunate to be in their peak earning and investing years during one of the longest bull markets in history (the 1980s and 1990s stock boom when the S&P 500 was up almost 18% per year over a 20-year period). Millennials, in contrast, were either too young to invest then or had no spare money to invest during the 2010s, and now face very high entry prices for stocks and housing.
All these economic storms have also shaped our mindset. It’s hard to feel secure or plan 30 years ahead when every decade of your life has seen a “once-in-a-lifetime” crisis. Many Millennials carry a bit of financial PTSD; we’re cautious, we save more (when we can) as a hedge against uncertainty, and we sometimes feel behind through no fault of our own. It’s not an excuse, it’s context. When our parents say “Just do X, Y, Z like I did,” they often aren’t accounting for the fact that the world changed – a lot.
Finally, a different retirement reality
Finally, let’s talk about the endgame of finances: retirement. Or as many Millennials half-joke, “What retirement?”
This is an area where the contrast with our Boomer parents really comes into focus. Many Boomers could reasonably expect a comfortable retirement funded by some combination of Social Security, a pension, and personal savings. For a lot of Millennials, those first two pillars (Social Security and pensions) look shaky at best, which leaves us trying to prop up the whole retirement plan on our own savings – the same savings that are getting squeezed by everything we discussed above.
Start with pensions. A significant number of Boomers, especially older Boomers, worked for employers that offered defined-benefit pensions, guaranteeing them a set income in retirement. Those pensions are now a rarity for younger workers. As experts have noted, Millennials and Gen Z are “famously on their own for retirement”, with virtually no access to pensions in most industries.
That means we must invest in 401(k)s or IRAs, which are subject to market risks and which require having enough disposable income to contribute in the first place. It’s a double whammy – we have less ability to save, and no guaranteed pension waiting for us.
Now Social Security – the bedrock of retirement income for many of our parents. Will it even be there for Millennials? We don’t know, but there’s a lot of skepticism. As noted by a writer in a WSJ opinion piece, “Social Security is set up like an unsustainable pyramid scheme, which will pay Gen Z far less than promised”.
So, if pensions are gone and Social Security is dubious, retirement security for Millennials hinges on personal wealth accumulation. And here again, we’re behind. By our mid-30s, the average Millennial has significantly less wealth relative to income than Boomers did at the same age. One study noted that older Millennials (around age 34–38) have a net wealth that’s only about 70% of their annual income on average, whereas Boomers at that age had about 82% of their income in net wealth (and Gen X had 110%!).
In other words, a larger chunk of our generation might not be able to retire fully even by 70. Many of us may have to keep working in some capacity much later in life. We’re already seeing an expectation shift – I know people my age who say things like, “Maybe I’ll just work until I drop” half-jokingly, because the idea of saving up, say, $1–2 million for retirement while also paying off loans and raising kids, sounds borderline science-fiction.
All of this isn’t to say every Boomer had it easy in retirement or every Millennial will struggle – there’s plenty of variation. But broadly speaking, our generation’s retirement prospects are more uncertain. We have to be more self-reliant in retirement planning, and we’re trying to do that with less income, more debt, and higher costs during our prime saving years. It’s a bit like trying to fill a bucket that has a slow leak; you have to pour in a lot more (save aggressively) just to get the same result, because money is constantly leaking out for other obligations and there’s no extra help refilling it.
Putting it all together
Stepping back, I think it’s clear that Millennials and Boomers have been playing on very different economic playing fields. And the narrative that “kids these days are just bad with money” falls apart when you look at the structural challenges Millennials face.
Stagnant wages, sky-high housing and education costs, heavier debt burdens, a more volatile job market, the aftershocks of major recessions, and the erosion of traditional safety nets – these are the real reasons so many Millennials are struggling financially compared to our Boomer parents. It’s not for lack of effort or ambition; it’s that the goalposts moved (further away, that is).
For those of us in the thick of it, this understanding is oddly comforting. It validates that we’re not just imagining things – it is harder to get ahead today in many ways. Boomers weren’t “smarter” or “more disciplined” just because they could buy homes and support families on one income; they were operating in an era of tailwinds that we simply don’t have. Acknowledging that isn’t about playing the victim; it’s about being realistic and kind to ourselves. We’ve been dealt a tougher hand economically, and it’s okay to feel frustrated by that.
Yet, knowing all this, Millennials are nothing if not resilient and resourceful. Our generation has adapted in creative ways – from mastering side hustles, to finding new financial tools (like robo-advisors and investing apps) to make the most of what we have, to supporting each other through shared housing or community living arrangements. We also tend to be more open about money challenges, which helps; talking about salaries, debt, and hardship – topics that were once taboo – has empowered us to negotiate better and seek change. Some experts even say these struggles may have made Millennials more financially savvy out of necessity.
In sharing these insights, my goal isn’t to despair, but to say: you’re not alone, and you’re not crazy for feeling the squeeze. Understanding the history and data can actually be motivating – it clarifies that we haven’t been “doing it wrong,” and it can inspire us to push for a world where hard work does pay off like it used to. After all, if there’s one thing we inherited from our Boomer parents, it’s the belief that each generation should strive to build a better life for the next. Recognizing why things are harder for Millennials is the first step toward making sure the next generation doesn’t face the same uphill battle.
