Millennials are currently in that much coveted marketing sweet spot of 18 to 34-year olds, but they may be one of the most misunderstood generations in years — especially when it comes to money.
Older generations are quick to point fingers, calling Millennials the “laziest generation” and griping about their lack of work ethic. But it may be that they’re just misunderstood. It seems as though Millennials just have different goals than their Baby Boomer parents, valuing freedom, creativity, and choice over the corner office or a retirement gold watch.
And nowhere is this more true than in their financial goals. A couple of surveys have come out recently showing that Millennials in the U.S. and the U.K. have more in common with their grandparents when it comes to their financial goals.
These surveys point show that Millennials are surprisingly conservative when it comes to their financial decisions:
- According to a survey by T. Rowe Price, 18- to 34-year-olds are better about tracking their spending and sticking to a budget than Baby Boomers.
- More Millennials have increased their 401(k) contributions in the past year than Baby Boomers, too. (Granted, Boomers may already be saving more aggressively.)
- In the same survey, 88% of Millennials said they are “pretty good” at living within their means, and 67% said they save “by any means necessary.”
- According to a survey done by creative agency Rufus Leonard, 72% of millennials believe real estate and savings are the best investments.
- Around 50% trust banks with their money, but 99% say they are ready to switch banks with very little incentive needed. They display very little brand loyalty when it comes to financial institutions!
- 33% say they most value sustainability in a financial brand, with many surprisingly placing this above a good digital experience.
“When [Millennials] have the means to do the right thing, it appears that they often do. They are exhibiting financial discipline in managing their spending and are defying stereotypes that this generation is prone to spend-thrift, short-sighted thinking,” said Anne Coveney, a senior manager at T. Rowe Price, in a statement.
Your parents don’t get to tell you how to spend your money.
This is significant, because it shows that Millennials really aren’t lazy or short-sighted, but rather, they maybe just aren’t as interested in the material indicators of the American Dream as their parents were. They aren’t as interested in owning STUFF — like a big house or an expensive car. (Hence the growing popularity of the sharing economy.)
Understanding your own personal goals (as opposed to the goals society says you “ought” to have) is a big part of developing a conscious spending plan — and a really big part of what I talk about in my new book, “Personal Finance that Doesn’t Suck.”
If you are a Millennial with different investment goals than your parents (or your fogey financial advisor) that’s OK. You have to take your own style and preferences into account when building a conscious spending plans that fits your life, your goals, and your needs.
Are you a Millennial? Do you feel like you are misunderstood by people in older generations, especially when it comes to your finances or goals? I’d love to hear your thoughts, just tag me on my Facebook page.
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