Affluent Millennials Are Going Above And Beyond To Look Rich. Here’s What You Can Do Instead
Status plays a massive part in defining ourselves, especially with social media giving us FOMO whenever we look at our friend’s recent trips.
And this couldn’t be any truer when it comes to our finances.
It’s normal to want to splurge on a trip or the occasional nice top. But many affluent millennials are feeling the pressure to “prove” they’re rich, even if it means saddling up with debt most of them don’t even want.
But why is this happening to so many people in the first place?
Let’s explore why this group is trying so hard to flex their money and what you can do to build sustainable wealth instead!
Why Are Millennials So Pressured To Look Wealthy?
Millennials became adults during massive societal changes, from new tech to economic recessions. Because of this, they face unique pressures that impact their perceptions of wealth and success.
Just take a look at platforms like TikTok or Instagram. You’ll see many friends or influencers showing off their latest trip, fancy car, or anything else that makes them look like they’re living their best life.
Seeing that constantly creates a sense of pressure or FOMO that can drive you to keep up with appearances, even if it means living beyond your means.
This brings us to our current situation: a shocking 41% of affluent millennials openly admit to funding their lifestyles through credit cards to keep up.
The Impact of Post-Pandemic Spending Habits
Besides peer pressure, the pandemic changed how we spent our money, at least for a while.
Some people used this time to save and become more financially prudent.
However, the opposite happened with many affluent millennials. Months of lockdowns and restrictions gave way to vacations, dining out, and simply making up for lost time.
The remote work explosion also motivated many well-off millennials to invest in renovations to boost their productivity. On average, high-end home offices could average $5,000 or more.
These expenses seem reasonable, especially with stimulus checks and other government support during this time. However, as pandemic savings dried up last year, many Americans (including millennials) had to go into debt again to maintain their lifestyle.
The Cost of Keeping Up Appearances
While showing off how rich you are might win you some connections, it’ll ultimately take a toll on your overall wealth.
For starters, the pressure to look good forces many people to inflate their lifestyles to keep up with appearances. And when you’re constantly going over budget, chances are you’ll end up in an unhealthy cycle of debt traps, overspending, and constant financial stress, a significant problem in the US today.
Remember, you might feel good about spending a lot when doing it. But once you realize you’re neck deep in debt, it might be too late to get back on track.
How Millennials Can Really Build Wealth
Building real wealth takes planning, discipline, and self-awareness. Here are some practical steps you can take to make your financial goals come true:
1. Build Emergency Savings
Before anything, create an emergency fund to cover any unexpected expenses. Aim for at least three months’ living expenses in a separate high-yield savings or money market account.
2. Set Financial Goals
Don’t let FOMO distract you from your long-term goals. Set clear financial goals based on your values and priorities. Whether saving for retirement or buying a new home, knowing what you want will help you get to where you want to be.
3. Live Below Your Means
While not the most glamorous way to live, staying below your means helps you achieve your goals much faster. Think twice before a large purchase, avoid impulse, and prioritize your needs.
4. Invest Wisely
When building your investment or retirement portfolio, spread it across different asset classes like stocks, real estate, and alternative investments. If you can, working with a financial advisor to develop a strategy that aligns with long-term objectives will help you stay on track.
The Bottom Line
While going on an expensive trip or buying a new phone might make your friends jealous, pretending to have money and being wealthy are two different things.
True wealth is built on financial stability, discipline, and long-term planning.
By cutting back on spending and focusing on long-term financial goals, millennials can create a prosperous life for themselves and their families.
Remember, it’s not about what you’re wearing but how much you actually have in the bank that matters!
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