Let’s face it: we all knew that the generation who came of age during the rise of emails, texting, and cell phones would use money differently, but it wasn’t until now that we knew just how different it would be.
But since Millennials are an enormous generation, it’s nearly impossible to paint them all with the same brush when it comes to finances. You’ve got a huge percentage of them who are drowning in student loan debt, but you’ve also got some who have unparalleled spending power. Whatever the case may be, here are some notable financial trends emerging among the Millennial generation:
Affluent Millennials have unique spending habits. Whether they’ve gotten their money by landing a well-paying job, through inheritance, or anywhere in between, affluent Millennials seem to be breaking away from their parents’ way of spending. According to a recent article on The Drum, modern “freelance” culture and the emergence of young tech millionaires had an astounding affect on Millennials with money. They value experiences over products, place high value on “luxury” brands, and are highly influenced by what they see on social media, particularly Instagram.
Non-Affluent Millennials still have time to save BIG for retirement. Millennials are both mystified and terrified by the idea of retirement. In fact, a new survey from Wells Fargo shows that roughly two-thirds of Millennials don’t think they’ll have enough money to retire. This is especially relevant since 74% of respondents said that they don’t think Social Security will be available to them, as it had been for their grandparents’ generation. (Check out The Center’s research with Insured Retirement Institute for more shocking stats on Millennials and retirement here!)
The good news? Millennials have the gift of time. “If you have a workplace plan, get in it,” says Joe Ready, director of institutional retirement and trust for Wells Fargo. 401(k) plans can seem daunting to young workers, but even putting a small amount of money in each year can make a huge difference in the long run. And for Millennials who aren’t offered a retirement plan through their jobs, a good option would be to begin funding a traditional or Roth IRA. They’re easy to start, and can only help in the long run.
Millennials value personal connection when it comes to banks, but may still use technology to manage their daily finances. Millennials place great value on human connection when making a financial plan. However, when it comes to their day-to-day spending, Millennials aren’t giving up technology so soon. Smartphone apps such as Mint, Pocket Expense, Expensify and help Millennials manage their daily spending. But it’s not just the app companies that are in on it. In fact, according to American Banker, many banks are creating their own technology to help Millennials through their daily expenses.