Millennials,
those born between the years 1981 – 1996, is the much-maligned generation of
our society. But I think that it just become a habit for many loving to hate
millennials just because it’s fun to do so. But it cannot be denied that millennials have
become a force to reckon with and that they have affected every corner of our
society through their sheer size. What is amazing is that they have departed
from the usual tradition and is doing everything their parents weren’t able to
do. What more they are changing lives whether we admit it or not.
With this
brazenness never before seen from other generation, millennials are often
labeled as being financially irresponsible and spending too much on frivolous
things or experiences but it isn’t so and this is not the case according to the
Generations Ahead Study from Allianz. What we perceived is not the reality but
that this generation are actually positioning themselves to be in better
financial shape than other generations.
Results from the study found that 77% of
millennials feel financially confident (compared to only 64% of Gen Xers).
Further supporting this financial progress, 41% of millennials reported they
always set aside money each month for saving (compared to only 36% of Gen Xers)
and 58% believe saving for retirement is a basic necessity, like food or
housing. Many millennials (71%) also use “tricks” to make saving money easier.
For example, the majority of them use several different accounts to
automatically save their money for specific purposes (one for everyday
expenses, one for a particular loan, one for a special trip, etc.).
Social media
dangers
As their financial strength builds,
however, social media has become the millennials’ financial Achilles’ heel.
More than half (55%) reported experiencing a fear of missing out (FOMO) and 57%
spent money they hadn’t planned to because of what they saw on their social
media feeds. The vast majority (88%) of millennial respondents also
believe social media creates more of a tendency to compare one’s
wealth/lifestyle with others (versus 71% of Gen Xers and 54% of boomers).
Sixty-one percent feel inadequate about their own life and what they have
because of social media. And perhaps due to this FOMO, half also claim they
spend more money going out than they do on rent or mortgage.
Learning from
the past, seeking help for the future
Recent financial traumas witnessed by
millennials have also had a profound effect. Nearly a quarter (24%) of
millennials saw their parents suffer a major financial setback during the
recession of 2008-2009 and possibly because of this, 57% said they are unlikely
to ever invest in the stock market. Additionally, 65% are uncomfortable with
too much debt because they saw their parents struggle with it.
The study also found that this
generation is the most open to getting help. While the vast majority of
millennials (70%) use online apps or tools to help them manage their money,
human support is still very valuable to them. In fact, 40% of millennials said
they have a financial professional and work closely with them (compared to only
25% of Gen Xers). They also prefer to communicate in person with a financial
professional (42% ranked it as their first choice with phone communication
coming in second at 19%). Many millennials believe having a financial
professional would give them some relief from the pressure of trying to plan
for their family’s future, as 70% are overwhelmed by the thought of how they
could provide for themselves and their family in the long term.
