Urban Micro Apartments May Offer Millennials Path Towards Wealth Creation
According to The Institute of College Access and Success report on student debt, the average student borrower has over $30,000 in student loan debt, or about $300 per month. The sinister characteristic about this debt is that it cannot be discharged in bankruptcy. That means that these borrowers will have this debt hanging over their lives for a significant time. Now couple that with the cost of owning a car, which according to AAA’s 2015 car ownership cost study is $725 per month and you start out the month with over $1,000 in the hole, and that’s after tax money. If you throw on rent, food, healthcare and other expenses, its no wonder that the average young person cannot save any money.
Micro apartments in urban areas may offer an escape from this long term debt problem.
First, micro apartment in urban areas allow its residents to live closer to the urban core where the salaries are higher on average than the suburban areas. Another factor is given that they do not have to spend time commuting to and from work, they can spend more time at work. This additional work time can be in the form of longer hours, a part time job or even freelancing.
Second, because they are in the urban core, urban micro apartment residents skip car ownership, essentially putting that $725 back in their pockets.
Finally, the inherent lower cost of smaller spaced apartments means that they are also saving on rent.
In summary, these three elements can lead to Millennials to save money and put them on a stronger financial footing to later invest in the purchase of their own home or starting a business, both excellent paths toward a better future.