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Why it’s hard to feel happy in the current economy

Millennials (aged 27 to 42) are in a class all their own right now — they’re in their prime working years, but they’re also hitting that stage in life where, in older generations, their boomer parents might have purchased their first homes, gotten married and started raising kids.

But the economy doesn’t quite look the same as it did in their boomer parents’ day.

As a group, millennials have endured two financial crises during their working years so far, plus the subsequent inflation that tailed the COVID-19 pandemic. They’re saddled with hefty student loan debt during a time of high prices and interest rates, all of which could be impacting their ability to meet certain milestones, like buying their first home, or saving for their retirement years.

With mortgage rates hovering just over 7% and the typical entry-level home price soaring to record highs many have been left wondering whether they’ll ever be able to afford that first home.

In fact, the average income a buyer needs to afford the typical U.S. home has even eclipsed the six-figure mark this year, according to the National Association of Realtors.

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Is working multiple jobs really the answer?

Some millennials are doing exactly what O’Leary says — they’re working multiple jobs to make ends meet.

In fact, recent data from the Labor Department reveals the number of Americans working a second job reached a post-pandemic high of 8.5 million in October.

But for millennials who are caregivers to aging parents or who have younger children that require more care, working multiple jobs might not be a feasible solution.

Some parents can’t afford daycare prices to begin with, which can cost hundreds of dollars a week, according to a recent report from Care.com, an online marketplace for finding care. The report finds families are spending 27% of their household income on child care expenses on average.

As a frame of reference, the Department of Health and Human Services considers daycare affordable if it is below the 7% threshold.

But access to providers could become more inaccessible as well. More than 70,000 child care programs are estimated to be closing now that federal stabilization funding to child care providers has ended — which means approximately 3.2 million children could lose their spots, according to a June analysis from think tank The Century Foundation.

The report projects American families could lose $9 billion collectively each year as parents are pushed to work reduced hours or leave the workforce entirely in order to care for their kids.

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About the Author

Serah Louis

Serah Louis

Reporter

Serah Louis is a reporter with Moneywise.com. She enjoys tackling topical personal finance issues for young people and women and covering the latest in financial news.

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