According to a study by Forbes and Elite Daily, Millennials are coming into their own. This demographic comprises 80 Million Americans, a fourth of our entire population. They wield $200 billion in annual buying power. Many of my clients fall into this group and I find they embody many characteristics that I admire. It got me thinking about this generation — dubbed the Me Me Me Generation and the Next Greatest Generation — and their habits and attitude about money. My research led me to have an interesting conversation with my 21-year old son.
Paying for TV & Entertainment
Only 46% of Millennials consume media via television. Like most adults aged 14 to 24, my son uses his phone, tablet or computer to tune in. Millions of Americans, fed up with the high cost of traditional cable TV packages, have opted to cut the cord; they are sourcing their TV programming via streaming devices like Roku and Chromecast or via gaming systems like Xbox or PlayStation.
Money Management Tip: Ditching Comcast for a streaming service (like Hulu and Netflix) may initially appear like you’re saving oodles money. However, you may need to subscribe to multiple services to get your favorite programs. Be aware that those monthly subscription and movie download fees can add up. It may still be a better deal to cut the cable TV cord but the savings may be less than you originally thought.
Investing for the Future
Millennials experienced the Great Recession, mostly by seeing the direct effect it had on their parents; it colored their view on money management and investing. Now that they are entering the workforce, earning salaries that enable them to save for retirement, many are skittish about investing in the stock market and are distrustful of banks. It’s not uncommon for this age group to keep a significant percentage of their money liquid.
This generation is also saddled with student loans. According to Inc., two-thirds of Millennials have at least one source of long-term debt, averaging $40,000. Student debt is the U.S. is now more than $1.2 trillion!
Money Management Tip: Find a financial advisor that is open to having open and frank conversations about money. Seek out information from credible sources to become more educated. Once you are more confident about your options, you can best decide how to work through your debt obligations and plan for your future including purchasing a car and/or home and saving for retirement.
Millennial Views on Marriage & Children
The Greatest Generation married early. Of course, their lives were shaped by the Great Depression and World War II. Shaped by the Great Recession, Millennials are waiting to get married; my own son included. Only 26% get married between the ages of 18 to 32. One of the major reasons to wait? The desire to become more financially stable. And even then, only 42% indicated they plan on having children.
Money Management Tip: Before tying the knot or having a child, talk about your money attitudes and habits with your partner. Working together, rather than at cross-purposes, will help you achieve your goals faster and have more fun in the process.
Are you a Millennial or have one in your life? What are their attitudes about money management?