Not your dad's pursuit of happiness: How Millennials are redefining the successful life
A new study by TD found 52 per cent of millennials are on track to complete their life goals — but not according to their plan.
Cherisse Feldberg, 31, still imagines her wedding day. She wants a mermaid-style dress, her bridesmaids will wear red and it’ll be a small affair — a crowd that can fit comfortably in her backyard.
It’s been almost six years since she got engaged, and the wedding seems increasingly out of reach.
First, her fiancé’s father got sick, then they inherited the house (and the debt) in Golden, B.C., which meant pushing off the wedding for a year. Then she had a baby, and the ceremony got bumped again. And then another baby, and again, another delay. She says she wasn’t financially prepared for the turn of events.
Feldberg is part of a growing cohort of millennials opting to undertake so-called markers of adulthood out of order.
A new study by TD found 52 per cent of millennials are on track to complete their life goals — but not according to their plan. And many are facing unexpected costs as a result.
One of the issues is millennials are still saving for these big expenses as though they were going to go about it in the traditional order (that is graduate, move out and gain financial independence, get married, buy a home, have a kid), says Lee Bennett, senior vice-president of TD’s wealth and financial planning group.
“It’s not that they have less money, they just have less time to put money away,” says Bennett. What’s more, many underestimate the cost of these life events, Bennett says.
For example, raising a child can run $13,000 a year, according to one estimate from MoneySense magazine. And as of July 2015, the average price of a Canadian home stands at $437,135, (up from about $150,00 in 2000).
Even the cost of education is rising — the Canadian Centre for Policy Alternatives found tuition has nearly tripled over the past 20 years, with average student debt hovering in the mid- to high-$20,000 range.
And millennials’ salaries haven’t kept pace, increasing only $1,000 (adjusted for inflation) when compared to their parents’ generation 30 years prior, according to a 2014 study by BMO.
The recession hasn’t helped, either: unemployment levels among 15- to 24-year-olds has hovered around 13 per cent since the 2008 financial meltdown. That statistic doesn’t take into account youth underemployment (taking jobs for which they are overqualified), which is an estimated 27 per cent. And keeping up with everyday expenses means it can be even more difficult to save for the next stage.
Feldberg says this is exactly what happened to her.
“There’s too many reasons to keep putting the wedding off,” she says. “It would have been easier to do it in (2009) when there was no house, no kids. Now there are other priorities — we needed a new kitchen, the kids have to go on a family holiday. A wedding takes last place to everything else.”
That’s not to say millennials are moping about the unexpected turn of events, says Johanna Faigelman, a cultural anthropologist who studies this cohort extensively as the president of marketing research firm Human Branding.
Adulthood, she says, is a social construct: the transition from frivolous, happiness-seeking teenager to grownup contributing member of society.
“But the transition has been stretched over time to the point where it isn’t fully happening,” says Faigelman.
As of 2011, 42 per cent of people in their 20s lived with their parents, compared to 27 per cent in 1981. And millennials are putting off marriage as well. In 2008, the average age of newlyweds was 30 compared to 23 in 1972, according to Statistics Canada.
Yet, delaying adulthood is not necessarily by choice. One study by the Pew Research Center found one-third of millennials want to get married or have a baby, but are putting it off for financial reasons. Half of the people surveyed said they work jobs that don’t appeal to them in order to pay the bills.
Psychology professor Jeffrey Arnett at Clark University in Worcester, Mass. has said changes in society (such as the need for more education, fewer entry-level jobs and a delay in having children in favour of focusing on careers) have created a new stage called “emerging adulthood.”
“‘Adulthood’ was the end of all the foolish things like living your dream, pursuing your happiness. It meant that corner office, white picket fence and two-point-five kids,” Faigelman says. But, she adds, millennials don’t want financial obligations like mortgages to stop their pursuit of happiness.
Arnett’s research backs that up, and while “emerging adults” tend to feel psychological instability and a sense of being “in-between,” there is also a focus on identity exploration and a sense of what’s possible.
One 2012 study by the Pew Research Center found 89 per cent of millennials aren’t worried about being able to afford the life they want.
Faigelman reasons this is because millennials are shifting their definitions of what they want in life; what makes for a “successful” adulthood.
“(Millennials) might see the value in owning a house, but (say) ‘Maybe it’s not for me, I’d rather pay for experiences and travel, and have that enrich my life,’” she says.
Rather than focus on the house or wedding they wanted, but can’t afford, this cohort has adapted, taking the unplanned events and making them markers of success, she says.
“I still want the wedding dress, the first dance and that memory,” says Feldberg of her far-off wedding. “But our priorities are saving up for a bigger home, and saving for our kids’ school fund, so they can do whatever they want — that’s what matters.”