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Why millennials say they need $525,000 a year to be happy

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Millennials said they need to earn $525,000 a year to be happy in a recent survey.Oscar Wong/GettyImages
  • Millennials said in a recent survey that they need $525,000 a year to be happy.

  • That amount was more than double what other generations said they needed.

  • It's likely due to high debt loads millennials hold, along with childcare and housing costs.

Millennials want half a million dollars annually to be happy. But that's a lot higher than what both older and younger generations want, per a recent survey.

In mid-November, financial services company Empower released the results of a survey conducted by The Harris Poll in August that asked 2,034 Americans aged 18 and over if they think there is a price ot happiness. The average respondent said they think they need a $284,167 annual salary to be happy, and for millennials, that amount was much higher at $525,000.

Meanwhile, Gen Z said it would take a $128,000 salary for them to be happy, Gen X said they would be happy with $130,000, and boomers estimated the amount at $124,000.

While each person might have a different idea of the true price of happiness, there's no argument that it's a difficult time for many Americans — and millennials in particular — in the current economy.

Starting off with inflation: the US has made strides in its pandemic recovery, and the Federal Reserve is confident the country is moving in the right direction toward meeting the central bank's 2% inflation target. Most recently, the Consumer Price Index, which measures inflation, increased 3.2% year-over-year in October, a decrease from the 3.7% reading a month prior.

But inflation cooling off isn't enough for consumers to feel relief in their wallets. As Business Insider recently reported, millennials' financial well-being has plummeted, according to Morning Consult's latest iteration of its well-being index. While baby boomers' well-being score rose to 4.04 from August 2022 to August 2023, millennials' score declined to .94, the biggest decline across all age groups. The index is based on a scale from the Consumer Financial Protection Bureau from 0 to 100. A one-point jump is associated with things like credit scores going up, which happened four-fold for boomers.

Big debt loads are a contributor to millennials' financial well-being right now. Federal student-loan payments resumed in October after an over three-year pause, and millennials hold the most student debt out of every generation, with the average amount for a millennial totaling $42,637 — above the $35,000 average for all borrowers.

Additionally, a recent survey from the New York Federal Reserve found that millennials are the only generation with credit card delinquencies exceeding pre-pandemic levels, with their transition rate into delinquency 0.4 percentage points higher than in the third quarter of 2019.

Consumer debt isn't the only thing constraining millennials right now. The cost of childcare has tripled since 1991, according to Bureau of Labor Statistics data, and the price of baby food and formula has more than doubled since 1997, per NielsenIQ data. On top of that, high housing costs pose an additional strain — over 75% of homes on the market are too expensive for middle-class buyers, per a June study from the National Association of Realtors, and a record 85% of Americans surveyed by Fannie Mae in October said it's a bad time to buy a home.

"That means less money for a 401(k), savings, college, starting a small business, repairs to your house. Just the basic stuff becomes more and more difficult," millennial Rep. Jimmy Gomez previously told Business Insider. "So the stress is real, especially for Gen Z and millennials."

So while it's a rough time for many Americans' finances right now, millennials are being hit with high costs from all sides, and it's unclear how soon their consumer sentiment will improve — and whether their salary expectations will change.

President Joe Biden acknowledged economic strains in a Thursday statement: "Our actions have mended supply chains and helped bring inflation down to its lowest level in two years. But we still have more work to do: prices are still too high for too many families."

Read the original article on Business Insider