Although things appear to be on the mend (economically) from where they were five short years ago, there's still been much talk of millennial spending and saving habits.
Even though it's slightly dated, I was delighted to read this article by The Guardian. The article highlights a study done by UBS on millennial's financial habits and outlook. The good news? That with access to technology and information on finance, and after experiencing extreme economic volatility and instability, we as a generation are going to be more financially savvy than our parents.
Possibly even more so than our depression-era grandparents.
And the best part of the study? It proves that millennials are more concerned about their finances than others/non-millennials could even possibly imagine. Other interesting facts from the study:
- Millennials hold more money in cash than other generations. Of our total wealth/net worth millennials (on average) hold 52% of it in cash, as compared to 23% of millennials. This shows we are interested in having a large amount in savings to weather financial emergencies.
- Millennials genuinely worry about others. Behind saving for our own retirement (39%), concern over care/financial responsibility for our aging parents was the #2 concern (30%.)
- When asked how they were going to achieve long term financial success, millennial's top answers were working hard (69%), saving/living frugally (45%) , and acquiring education (37%.) This contradicts the stereotypes that millennials are lazy or don't know the value of hard work or the meaning of money.
- Only 28% of millennials believe investing is a way to grow serious wealth. This varies staunchly from other generations, of whom 58% of respondents said investing was a way to achieve financial success.
- When asked how they would spend "found" money, top millennial answers were pay off debt (a whopping 42%), increase savings (17%), and purchase real estate (16%.)
- 78% of millennials surveyed believe healthy finances are the way to happiness. This is more than Gen-X (69%) , Boomers (65%), and WWII (66%.) I like to believe this is because we have seen first hand how quickly money can come and go, and how important it is to be financially independent and prepared for emergencies.
So with this information in mind - what are the top money moves millennials need to be making?
Use Online Banking
Gone are the days of balancing checkbooks and standing in long teller lines at the bank. Millennials have some of the best financial tech available right on their phones/tablets/laptops/etc. Online banking - whether through an online-only bank or a banking portal - has made it easier than ever to keep up with your money. You can open new accounts, transfer money from person to person, or even pay your bills right from your device!
I encourage all millennials out there to try out automating their bill pay. Nothing feels worse than realizing you're a day late on your credit card payment.
Start Saving for Retirement
I know, I know. Saving for retirement sounds super lame, especially when you could be using that extra $30 from your paycheck on drinks and food. But starting your retirement fund early will do amazing things for you in the long run.
See if your employer has a company 401k plan you can get in on and try to sock away at least 5% of your paycheck towards retirement. Since you probably don't plan on retiring until your 60's (or later), if you start saving at age 18 you have 42 years for your accounts to accrue interest. In layman's terms, that $30 from this week could boom up to thousands later in life.
Start a Side Hustle
It's no secret that millennials value work-life balance more than previous generations. We want more flexibility in hours, pay, and even employers. And that's what I love about having a side hustle.
You guys all know this. I've turned my once part-time blogging side hustle into my full-time job, (read how I did that here) meaning I am in control of how much money I make and how I make it. And guess what? You can do it too!
Side hustles give you both the personal satisfaction of doing something you love and the extra cash to use for, you know, living.
And since we live in the age of the internet, more likely than not there is someone out there that will pay you for your passion. Millennials live in a time where you can literally quit your job and run an Etsy store out of your apartment. It's amazing and it's the new gig economy. Get on board.
Another great thing about millennials is how interconnected we are. Don't know how to do your taxes? Google it and find countless articles and how-to's. Looking for a cheap way to refurbish a table? Someone out there knows how to do it, and probably made a YouTube video about it. Millennials are constantly sharing their tips, tricks, and personal experiences online. And you can tap into that collective knowledge and find just about anything.
So fall down a rabbit hole of Wikipedia articles on real estate investing, read how other millennials have bought homes, or watch a step-by-step video on how the stock market works. The point is, make the most of the resources you have right at your fingertips.
What are some of your favorite money tips for millennials?