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COVID-19 Will Change How Millennials Save Money

The coronavirus is the latest economic retraction for Millennials who are prioritizing the next crisis over their retirement

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  • Current emergency funds are not cutting it for Millennials.
  • Office perks are no longer a priority. Potential employees want to see real benefits.
  • Advisers must adapt to cater to the changing needs of Millennials and Gen Z.

CGK President, Jason Dorsey, generations researcher and author of the forthcoming book, Zconomy, shared his thoughts with recently about how the pandemic is impacting Millennials’ savings habits. This is an incredibly important topic because Millennial savings habits will impact how they view work, education, spending, and future decisions.

The necessity of an emergency fund

Having lived through the economic downturn of 2001, the Great Recession of 2008, and the current pandemic, Millennials have experienced several periods of rapid and dramatic fiscal uncertainty. Add student debt, rising cost of housing, and childcare expenses to the mix, and it makes sense that Millennials want something different than simply saving for retirement.

As CGK President and generational speaker Jason Dorsey told PlanAdviser, “The challenge for many of these workers is that their emergency savings accounts couldn’t even cover two months of living expenses, and certainly not many months or longer. What we’ve seen is that many Millennials have drained their emergency savings accounts, and if they have retirement funds, they’re figuring out how to tap into those.”

At CGK, our research team is leading ongoing national studies into Millennials and each generation, particularly looking at the impact of the pandemic on them and their spending, work, and future. Jason frequently shares these must-know findings and strategies with leaders through customized virtual presentations, executive strategy sessions, and interactive webinar series.

Real benefits that employees need now

What Millennials want is to find financial security, especially in regard to being prepared for the next crisis—as they can’t make up for not being prepared for the current crisis. As Jason told PlanAdviser, “When people go through times of tremendous emotional, physical and financial stress, it becomes clear what’s actually important. In the long term, benefits will be a decisive characteristic of the types of companies that Millennials will want to work for.”

Snacks and extravagant holiday parties are nice perks and used to grab job seeker headlines, but now Millennials wisely appear to seek stability and benefits. In fact, what each generation now wants from an employer are core workplace benefits that truly help take care of people and their families. Crises only accentuate this fact, especially in these youngest of workers, such as Gen Z, who have not had to struggle through rough economic times before as adults. Jason and his co-author, Dr. Denise Villa, cover this topic and other important insights in their forthcoming book, Zconomy: How Gen Z Will Change the Future of Business—and What to Do About It.

Advisers must adapt to what tech-dependent investors demand

The world of investing has changed dramatically over the years and continues to do so as smartphone-based apps make financial decisions easier to research and execute. When it comes to Millennials and Gen Z, an adviser must be able to do more than set an in-person meeting or even a phone call with a client. Once that is done, the advice must meet the challenges Millennials and Gen Z face.

Jason said to PlanAdviser, “Advisers who choose to adapt to how these workers communicate, and place benefits and emergency savings accounts higher up, will likely succeed,”

Currently, there are more than 33 million Americans out of work. Without a doubt, those who are entering the workforce or who have not yet established themselves in their field may find it especially hard to find a job in their career of choice—or any job depending on where they live and their skillset. The world of work will look very different to every generation during and after the COVID-19 pandemic.

As Jason continues, “The truth is that nobody working right now has been through a situation like this before. We don’t want to just take a playbook that worked before and apply it blindly again. We need to take a step back and look at the uniqueness of the situation. Look at the uniqueness of the people going through this, and how you can best serve them.”

What are the key take-aways leaders need now?

As a leader, the pandemic has created a crucial time to take key management and insights-based actions to understand how each generation is experiencing this challenging time. Leaders need to understand what strategies and tools actually work for remote workers of every generation and how to drive sales and marketing across generations.

At CGK, we have already completed and are leading several new studies that inform our virtual presentations, interactive strategy sessions, and executive briefings. These offerings fill in the insights gaps so leaders can quickly make smart, informed, research-based decisions to come out of the pandemic with clear momentum, and with the clarity they need to succeed.

Contact our team here to learn how our COVID-19 generational research and insights can quickly help you and your organization to lead, market, sell, and innovate through this challenging time to emerge stronger.

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