Millennials are facing an uncertain economic future, and between the Great Recession and decades of stagnant wages, this has greatly influenced their habits when it comes to money. Often labeled as materialistic and spoiled, the reality is that many Millennials feel that they are unable to achieve the same material goals as previous generations until much later in life, if at all. Unemployment and low-paying jobs have made repaying student loan debt difficult.
There are a few things that frequently play a key role in where Millennials place their money, such as a global mindset, the environment, and a sense of social responsibility. These factors stem from the economic fallout that followed 9/11 and the market crash of 2008. When it comes to investments, many of them are following their own instincts or their peers rather than trusting the financial advice given to them by their parents or financial professionals. Despite being a rather tech-savvy generation Millennials are more interested in having a personal connection with those who manage their money.
A survey from the American Institute of Certified Public Accountants shows that over three-quarters of Millennials desire the same material goods as their peers, but that around half use a credit card to pay for daily necessities like food and utilities. Over 25% of the Millennials surveyed had late payments or were dealing with billing collectors, and over half were receiving some kind of financial assistance from their parents. A key finding from this study was that seven out of ten Millennials defined financial stability as being able to pay off all their bills each month. The study also highlights a few differences in money habits between the genders, where women tend to put a higher emphasis on saving money when compared to men.
The pressure to conform is attributed to social media, and this applies to financial habits as well. Interestingly, a 2012 study by Towers Watson revealed some noteworthy trends in Millennial spending, such as the tendency to purchase designer clothes at discount stores or buying cheaper bears while investing in finer wine.
Ultimately, Millennials face a unique set of challenges that might only be understood in retrospect. Their future is more uncertain compared to their predecessors, and their ability to succeed financially depends on both economic and political conditions.
Originally published on AmbrosioBlackwell.net