The new American dream? No debt, no house keys, no 9-to-5
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The youngest generation of working Americans has a new dream for their future and it doesn’t involve a white picket fence or working at the same steady job for decades. Millennials between the ages of 23 and 38 want more than the tangible benefits their parents yearned for, according to a recent Varo survey1.
While feeling financially secure is still high on the list of priorities at 42%, the new American dream envisioned by millennials includes feeling happy (36%) and having the freedom to focus on their individual wishes and needs (33%.)
Those kinds of goals, which are focused on emotional rather than material ideals, have caused a growing disconnect with the previous generations—62% of the survey’s more than 1,100 respondents said their version of the American dream is different than their parents. Nearly half (46%) say their parents don’t understand their generation’s financial struggles, and 25% blame their parents for their financial situation.
A challenged generation sets new #lifegoals
To be sure, life is different for millennials. They have very different financial challenges than the generations before them. They came of age, many entering adulthood, during the 2008 recession. And the student debt crisis has hit them hard. Overall, Americans are carrying nearly $1.7 trillion of student loan debt, according to the Federal Reserve.
While much has been reported about the debt’s effect on home-buying and even marriage, Varo’s survey underscores how carrying such debt can even affect one’s attitude on what dreams are—and are not—attainable.
In a general way, Boomers and GenXers didn’t face the education costs that millennials have, and thus didn’t enter adulthood with the same level of debt. Many college grads in the 20th century could expect to start an entry-level job and work their way up the corporate ladder at the same company over a period of many years. But one in three (35%) millennials think that kind of steady job falls firmly in the camp of the old-school American dream, not theirs.
Given the rocky financial picture that many millennials have faced, it’s not surprising that while they may envision a future complete with a new American Dream, nearly half (47%) say it feels impossible to achieve.
Women especially feel the dream is far away
Interestingly, there is a sharper divide along gender lines. More than half of millennial women (51%) said they feel the new American dream is impossible, compared to 43% of men. 40% of men, however, say they feel confident that this new American dream is achievable compared to just 35% of women.
For most, the new American dream is just that—a dream. Only 7% of survey respondents said they are already living their dream.
1 in 3 too burned out to pursue the new American dream
So, what’s holding people back from their dreams? As mentioned above, we can point a finger at the debt trap. More than half (55%) say they have “way too much debt” and that’s what is getting in the way of their American dream. In fact, one in three said they’d rather be debt free than have a down payment to put on a house.
What other things did respondents say are interfering with achieving the new American dream? A lack of opportunities (50%), corrupt government and politics (41%), and, even at these younger ages, burnout (33%).
Why did the dream change?
The generational difference, millennials reported, boils down to a changing society, the crushing cost of higher education, and a more stressful job market once they graduate.
Nearly half of millennials surveyed (47%) think their American dream is different than their parents’ generation because social norms have changed. Another 43% think their generation’s preferences and desires have shifted since their parents’ early days.
Another 43% say student debt and the cost of education has upended the traditional American dream and 39% say technology’s impact on the world has contributed as well.
Both government policies and a sense of community loss were also cited, though lower on the list with 29% and 22%, respectively. Even climate change was noted, with 16% of people citing that as a reason for why their dream has changed.
But optimism remains
What hasn’t changed, however, is that these millennials have a defined view of success and, like the generations before them, they are eager to make their dreams a reality, even if their wish list looks noticeably different. Nearly half (46%) said they are hopeful and optimistic when thinking about the future. That’s something we can all hold onto as we strive to chart a brighter financial course in the years ahead.
1 2019 survey for Varo conducted by Qualtrics of 1,100 U.S. millennials
Unless otherwise noted above, opinions, advice, services, or other information or content expressed or contributed by customers or non-Varo contributors do not necessarily state or reflect those of Varo Bank, N.A. Member FDIC (“Bank”). Bank is not responsible for the accuracy of any content provided by author(s) or contributor(s) other than Varo.
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