Why Millennials Are Struggling With Money [+ Solution]

by Tanya October 04, 2022

If you’re a Millennial, chances are you’ve struggled with money at some point in your life.

Why are so many of us struggling financially?

Here are 5 reasons:

1. The gig economy is keeping us behind

One of the reasons that millennials struggle with money is because of the gig economy.

The ‘gig economy’, often called the ‘sharing economy’ became popular after the financial crisis in 2008, when new business structures emerged due to the Great Recession.

Redundancies and lack of work forced people to find alternative ways to make money.

Gig economy was born out of financial desperation (not desire or opportunism) during 2008/2009.

The gig economy is when people sell their services/products for a quick buck. This can include things like driving for Uber, working as a dog walker, or being a freelance writer.

While the gig economy offers some flexibility and freedom, it also comes with some financial risks. For example, people in the gig economy may not have traditional employment benefits like health insurance or paid time off.

More and more Millennials are working freelance jobs or “gigs” instead of full-time jobs with benefits.

While this arrangement gives them more flexibility, it also makes it harder to save money and plan for the future.


Use these platforms if you must, but don’t rely your whole livelihood on them.

2. Student loan debt (in the U.S)

A recent study in the U.S showed that Millennials are struggling with money because of student loan debt.

In fact, the average U.S graduate has over $37,000 in student loans. This debt can make it difficult to buy a house, get the best auto loan rates, start a family, or even save for retirement. 

Student loan debt is also a major financial stressor. Millennials with student loan debt are more likely to experience anxiety and depression than those without debt.

They are also more likely to report financial worries to their doctor. 


Create a budget and stick to it. Make extra payments when possible. Work with a financial planner to create a plan to pay off your loan. 

3. Financial illiteracy

Many Millennials struggle with money because they are financially illiterate. They don’t understand compound interest or how to invest in stocks and shares.

The problem is exacerbated by the fact that most schools do not teach personal finance. As a result, Millennials are ill-equipped to make sound financial decisions.

This has had a devastating impact on their ability to build wealth. In order to close the financial literacy gap, it is essential that we provide more education on personal finance. 

We need to have the knowledge and tools they to make smart financial decisions. 


Pay yourself first.

What do I mean by that?

By “paying yourself first” I mean that on a payday, immediately transfer 10-50% of your income straight into my savings account, as opposed to saving what is left over from spending. This strategy limits your monthly spending money and forces you to be mindful.

I would also split my cash into different accounts:

1. Emergency account
2. Savings account
3. Investing portfolio (if you want)

Read more about the basics of personal finance here.

4. Credit card debt

Unlike student loans, which have fixed interest rates, credit card debt comes with sky-high interest rates that can quickly spiral out of control. 

What’s worse, credit card companies often target Millennials with aggressive marketing campaigns that promote “buy now, pay later” mentalities.

As a result, millennials are more likely to carry balances on their credit cards from month to month, paying hundreds or even thousands of dollars in interest. 


If you’re a Millennial struggling with money, the first step is to create a budget and make a plan to pay off your credit card debt.

Paying off your credit card debt should be your number one priority before you start saving and investing.

5. Underemployment

A big part of Millennials is struggling with underemployment.

Underemployment is the underuse of a worker because a job does not use the worker’s skills, is part-time, or leaves the worker idle.

For example, an individual with an engineering degree working as a pizza delivery man as his main source of income is considered to be underemployed. Also, an individual who is working part-time at an office job but would prefer to instead work full-time is considered underemployed.

As a result, they may find themselves juggling multiple jobs just to make ends meet. This can be extremely stressful and make it difficult to save for the future. 

Additionally, underemployed Millennials may have trouble qualifying for loans or credit cards, which can make it even harder to get ahead financially.


Budget carefully and build up an emergency fund, so you can make sure that you’re prepared for any financial surprises that come your way. 

If you are stuck in a job in which you are overqualified, you may need to think about creating the right job. That is, you could start your own business.

Talk to a career coach, a family member, or a friend.

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The first Millennial blogger in the UK. Twitter @_luckyattitude

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