The ‘millennial dilemmial’

Some millennials are burdened with student loan debts and earn less than expected, but enough of them are doing well to keep the industry’s boat sales prospects bright.
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We’re excited that we’re having another grandchild any day now. Our daughter and son-in-law are in their 30s, squarely in the millennial age range commonly pegged at 20 to 38. They should be thinking about buying a boat. They should be recalling how great boating was when they were growing up on the water.

And they might be, but a boat isn’t in the cards for these parents — because they’re textbook examples of what I call the “millennial dilemmial.” They both have good jobs. But the truth is having another kid is going to add to the money woes commonly facing most millennials these days, rendering our industry’s hope of getting them into boats about as sure as dispensing bibles to ISIS!

Like it or not, there’s an overabundance of surveys that document millennials owe too much … make too little … can’t save anything … must live in their parents’ basement too long … and are not even matching their parents’ living standards at the comparable age.

It seems they can’t get a break. Housing costs, whether renting or owning, have escalated. It’s reported the old rule about allocating no more than 30 percent of income to housing is only in history books. And while millennials are generally better educated than their parents, they graduated with heavy student loan debts and landed jobs that pay less than expected and may not even offer good career prospects.

Further, the amounts owed on student loans leave many millennials unable to buy a home and take on a weighty mortgage. And buying a home is pretty much a move taken before a boat would be considered.

But back to having kids. Millennials are in those child-bearing years. According to the U.S. Department of Agriculture, when it comes to having kids, we’re not talking cheap here!

The department’s latest study shows that millennials who have an income that ranges from $59,000 to $107,000 and have a child born in 2015 will spend, on average, over $250,000 to raise the child to age 18. Lower-income families will spend over $212,000, and higher-income parents will shell out more than $450,000, or over $25,000 a year.

The spending, the USDA study found, is for housing, food, education (but nothing saved for college), health care, clothing, child care and transportation. So it’s clear that the direct and indirect costs of raising a child will consume a major share of the household budget.

Other recent analyses of millennials’ financial picture might be discouraging, too. Some 64 percent of millennials with a job believe they will never accumulate $1 million in savings over their lifetime. That same Wells Fargo study also discovered 74 percent don’t think Social Security will be there for their retirement.

These and other findings certainly raise the question: If millennials, now the largest generation in America, feel so financially stressed, how can they afford kids, much less homes and boats? Is the future of our boat sales good or bad?

The simple answer is, good. Here’s why. A 2016 study examining the state of the American Dream found that half of the millennials born in the 1980s actually do make more than their parents. So much for doomsayers. Even at half, with the total millennial population at about 74 million, there’s a lot of people earning more and doing well.

Further, even greater financial stability will come as the millennials age. The leading edge of millennials is now approaching 40 and will soon enter their prime earnings years. Moreover, the great wealth currently held by boomers is already passing down to GenXers and is likely to be increasingly shared with millennials.

So, although the whole millennial generation may not be our prospective customers, we really only need to reach a tiny fraction of this population going forward, just as the current 12 million U.S. boat owners of all generations represent less than 4 percent of the population.

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