Are $19 Avocados the Reason Millennials Struggle Financially?

CareersPersonal Finance
Posted By Terri Williams on June 7, 2017 at 7:31 am
Are $19 Avocados the Reason Millennials Struggle Financially?

In an interview with the Australian version of 60 Minutes, Tim Gurner, a 35-year-old Aussie multimillionaire had some harsh words for young adults: “When I was trying to buy my first home, I wasn’t buying smashed avocados for $19 and four coffees at $4 each.” But he didn’t stop there in identifying the reasons millennials struggle to get ahead:

  • “The expectations of younger people are very, very high. They want to eat out every day, they want travel to Europe every year.”
  • “This generation is watching the Kardashians and thinking that’s normal – thinking owning a Bentley is normal.”

The real estate mogul, worth $46 million, was criticized for his comments because it was rumored that his first real estate investment property was the result of a $34,000 loan from his grandfather. However, Gurner says his boss purchased the property, and he worked to renovate it: “I spent every night on my hands and knees sanding back the floors, painting, renovating and working on the house. When we sold it, I used the small profits of $12,000 (combined with the $34,000 loan from his grandfather) to purchase my next property and it all grew from there.”

Gurner may be splitting hairs over his grandfather’s role in his success, but how valid are his points about the spending habits of young adults being a prime reason millennials struggle financially?

Imitating lifestyles of the rich and famous?

Jake Serfas, lead financial strategist at wealth management firm O’Dell, Winkfield, Roseman and Shipp in Washington D.C., believes that there’s more than just a grain of truth in Gurner’s comments. “The millennial generation has a serious problem with living above their means, and the majority are living lifestyles they can’t afford and many are only living in the moment.” Also, he says typical millennials only save 3-5% of their paycheck.

“Tack that on top of massive amounts of student loans, and it’s very challenging for them to get ahead and purchase their first home.”

Serfas believes that millennials need to change their mindset. “Get more excited about saving money and planning for the future versus spending money on lavish apartments, cars and vacations.”

While he says it important for young adults to enjoy life, Serfas also warns that fulfilling short-term desires could result in struggles and failures that could last a long time – even a lifetime. “If millennials could just save 10% of what they make, it would make a serious positive impact as they get older.”

Do millennials struggle with extravagance? What the numbers show

Angelo DeCandia, professor of business at Touro College in NYC, believes that millennials struggle when it comes to spending wisely, and he has the data to back up his theory. “According to the U.S. Bureau of Labor Statistics, when comparing the spending habits of millennials and Generation X (closest in age and income), the data shows that on average they spend $16,500 per year vs $22,000 for their older peers on housing.”

DeCandia says millennials are more likely to rent than purchase a home. But this may not be a result of frivolous spending. DeCandia points out two other interesting facts:

  • Millennials spend $1,700 on clothing versus $2,400 for Gen-X.
  • Millennials spend $2,900 eating out versus $3,900 for Gen-X.

“While it’s true that Generation X is earning higher salaries, given that they are further along in their careers, the differences between the two generations cannot be completely explained away by wages, and in fact shows millennials lagging disproportionately,” DeCandia says.

Ian Atkins, a financial analyst at, agrees and says, “While avocado toast and tickets to Fyre Festival might be buzzworthy, they are not to blame for why millennials are struggling financially.”

Economic factors and a generation

Atkins points to other factors, such as entering the workforce during the Great Recession. “This has both an immediate impact on the ability to find work with a good salary, as well as long-term impacts on earning potential and net worth.” Also, at most colleges, the sticker price is spiraling out of control, resulting in the need for increased student loan amounts, Atkins explains that it is millennials who are bearing the brunt of the impact. “But it doesn’t stop with student loan debt, which has relatively low-interest rates and generous repayment terms.”

Atkins says household credit card debt has also increased at alarming rates. “The surge in the cost of a college degree came when millennials and their families could least afford it, leaving an entire generation playing financial catch-up.”

About that college degree

While the country may be recovering from the Recession, it should be noted that millennials are also subject to a different set of work obstacles. “Younger generations are facing a progressively more competitive world where the very nature of employment has changed radically, and unlike earlier times, where a college education guaranteed a secure future, today’s economy is saturated with college degrees,” DeCandia says.

True, college grads fare better than those without such credentials, but supply far exceeds demand. According to DeCandia, “It is no surprise that both Mark Zuckerberg and Bill Gates have recently sounded the alarm that the future job picture is bleak due to automation and technology, and they both cautioned the current crop of graduates that they are going to have to create their own jobs, not a surprising view from two of the greatest entrepreneurs of all time.”

All of this might sound exciting, but is it realistic? “How many of us have achieved anything near these two titans?” DeCandia asks. “Is it fair to expect more from the millennial generation?”

With such stiff competition, you would expect job candidates to put their best foot forward. But DeCandia says this is not always the case. “There are countless stories of millennials showing up to job interviews inappropriately dressed, or communicating in email-ese (gr8 to have met you).”

And he says employers frequently complain that candidates are not prepared and haven’t researched the prospective company or the role. “But the casual approach of millennials was formulated through internet culture and employers rarely accuse this generation of being unfamiliar with technology.” In this respect, do millennials struggle because they’re being held to a double standard?

They’re expected to be hip, cool, and cutting-edge but also to conform to the standards and practices of previous generations. “The world is a much more casual place than it was just a few decades ago and we can’t blame just millennials for this development,” DeCandia says.

Terri Williams
Terri Williams graduated with a B.A. in English from the University of Alabama at Birmingham. Her education, career, and business articles have been featured on Yahoo! Education, U.S. News & World Report, The Houston Chronicle, and in the print edition of USA Today Special Edition. Terri is also a contributing author to "A Practical Guide to Digital Journalism Ethics," a book published by the Center for Digital Ethics and Policy at Loyola University Chicago.

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