Financial Traits of the Millennial Generation
July 24th, 2019
You know them as those remote working, collaboration-loving, open-space using, go-getters who love to talk about work life balance. But what about their take on money-how do millennials handle their finances? Why is this important?
Well, as small business owners you’ve no doubt encountered millennials either as staff or client base and its likely they are working their way towards being a very stable part of your business structure. A quick study in financial trends is a great way to better understand both your customer and your employees.
One of the biggest differences reported among this generation is their intent behind savings. The trend here is save to spend- less driven by long-term goals like retirement and investment portfolios. Chalk this one up to that whole work-life balance obsession!
Another major difference in millennials and their preceding generations is the automatic acquiring of debt in one specific form- student loans. College costs skyrocketed while the demand for a degree became the norm and now most millennials find themselves over $30,000 in debt overnight once they complete their college careers.
With this type of debt, any savings, earnings or sudden windfalls of cash are most typically put towards relieving this debt, rather than buying expensive or luxury items.
Another very interesting difference is what M’s tend to invest in when they do choose to go that route. Typically real estate is a popular investment but with M’s they are far more likely to seek out alternate options, one of the most trendy being cryptocurrency.
A recent survey from the American Institute of Certified Public Accountants showed:
“… that around half of them have to use a credit card to pay for basic daily necessities such as food and utilities. Over 25% of them had late payments or are dealing with bill collectors, and well over half are still receiving some form of financial aid from their parents. One of the most disturbing findings of this study reveals that seven out of 10 young people define financial stability as being able to pay all of their bills each month.” (Investopedia, 2019)
One article described the overall trend of millennials as ‘unconventional’, with diverse portfolios, creative asset management and a variety of get-rich-quick schemes; as opposed to the stable 401K, steady portfolio and standard real estate purchases of their older counterparts.