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Millennials, the generation born between 1981 and 1996, have been the subject of many headlines over the years. The media in the past dubbed them “the avocado toast generation” for their spending habits, but how much is the average millennial actually worth? With the oldest of millennials now past the age of 40, things have changed since the 2008 financial crisis and COVID-19.
Millennials’ net worth doubles
The U.S. economy has been fundamentally transformed by the COVID-19 pandemic in recent years. By providing significant government relief and lowering interest rates, households have been able to accumulate wealth despite the impact of inflation. In fact, the net worth of U.S. households rose by 40% from $103.99 trillion in Q1 2020 to $141.10 trillion in Q1 2022.
Millennials have also experienced significant financial benefits as a result of the pandemic, with their net worth more than doubling. According to MagnifyMoney’s latest study, the average net worth of millennials surged to $127,793 in the first quarter of 2022. Compared to the pre-COVID figure of $62,758, it has increased by a staggering 103.2%.
Much of this growth is from real estate, government initiatives such as extended unemployment benefits and loan forbearance, as well as higher income.
However, despite this growth, their net worth still trails behind that of older generations. The average net worth of a millennial surpasses only that of Gen Z. On average, millennials under 35 years old have a net worth of $76,000, while those over 35 have over $400,000.
Gen X has an average net worth ranging from $400,000 to $833,000, whereas the older generations, comprised of baby boomers and the Silent Generation, boast an average net worth of more than $1 million.
Over half of millennials now own a home
In 2022, a significant event occurred for the millennial generation, as more than half of them (about 51.5%) became homeowners. This milestone reflects the trend of millennials increasingly investing in real estate.
According to RentCafe, out of the 10.8 million new millennial homeowners gained over the past decade, 7 million of them acquired their homes in the last five years. This surge in home buying has been driven by the availability of low mortgage rates.
While there was a prime opportunity for millennials to purchase homes at the start of the pandemic, the Federal Reserve has since increased rates in response to rising inflation. As a result, those who did not participate in the home-buying trend may have missed out.
Millennials’ average salary also increased
According to the Bureau of Labor Statistics, those aged 25-34 earn a median salary of $1,003 per week or $52,156 annually, which is considerably higher than those aged 20-24. This increase is expected as young professionals begin to rise through the ranks.
Moreover, this demographic includes many who have completed graduate programs, leading to higher salaries. Meanwhile, those aged 35-44 have a median salary of $1,197 per week or $62,244 per year — providing a glimpse of the financial growth to come.
How to increase your net worth
There’s no denying that increasing your net worth can improve your financial stability and provide greater peace of mind. The good news is that there are steps you can take to make this a reality. One way to increase your net worth is to prioritize saving and investing.
By cutting back on unnecessary expenses and consistently investing a portion of your income, you can steadily grow your wealth over time. Another approach is to focus on boosting your income through furthering your education, pursuing new job opportunities, or starting a side hustle.
Regardless of your individual circumstances, the key is to remain disciplined in your financial habits and make a conscious effort to prioritize long-term financial growth. By taking consistent action towards increasing your net worth, you can achieve your goals and improve your overall personal finances.
It’s remarkable to see how much millennials have achieved in such a short period of time. It’s clear that the average net worth of millennials is on the rise and is expected to keep rising in the next few years. Overall, this tells us one thing: It’s never too late for people to take their financial destiny into their own hands and strive towards success. With clever budgeting, proper planning, and the support of friends and family, any generation will be able to further their financial wellbeing and build a strong foundation for their future.
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