Millennials: Today’s money masters
“Millennials,” also known as generation Y, are those born between 1980 and 2000. As millennials begin adjusting to their careers and adulthood and breaking into the age of responsible financial spending, research has shown their spending habits differ from their parents’ generations.
“My spending is different from my parents in the fact that I’m buying for me,” said Dustin Fleming, accounting major. “My parents were married at 18 and have had kids ever since. Their spending habits were geared towards the family. I’m single and focused on my goals. It’s also more expensive these days to obtain the same type of commodities that my parents did back in the day. My dad had a Stingray Corvette his senior year of high school and bought his first house a year later. Not feasible for most 18- and 19-year-olds these days.”
For one thing, millennials are avoiding the use of credit cards. Recent surveys from creditcard.com discovered that if you are a millennial, most likely you are paying with cash or debit cards.
The Independent Community Bankers of America report nearly a quarter of millennials report carrying less than $5 per day, seven days a week.
Although millennials are not charging on credit cards or carrying large amounts of cash, it does not mean that they are not spending.
“I absolutely think the millennial generation spend more than previous generations,” said Bonnie Nelson, vice president of marketing at PMD Marketing Inc. “Discretionary income is higher, especially with people spending longer living at home, taking longer to graduate college, putting off home buying, and getting married and having kids. That gives more spending money.”
In 2013 results from a survey by economist Jed Kolko of Trulia Trends found that 55 percent of 18- to 24-year-olds still live with their parents.
Research from the Intelligence group tracked the shopping trends of 1,300 people ages 18 to 34. More than a third of the millennials in the study purchased only “necessary” items such as work/school clothing, food and home toiletries.
“Before I make any expensive or high-quality item purchase, I try to do as much research as possible so that I get my money’s worth,” said Justin Ehrhardt, business management major. “When I spend money, it’s typically a blend of material items and in-the-moment experiences.”
Ehrhardt’s stance is not unusual among his generation. Nelson said millennials have an unprecedented level of control over their own lives.
“Millennials’ mentality is very different from other generations,” Nelson said. “This group is very opinionated, confident, free spirited and will not take life sitting down. If they are not satisfied with what is going on in their life, full control is taken immediately.”
Nelson also pointed out financial success will be based on a variety of factors, including the economy and hardship.
“Many financial issues have been taught to us,” Fleming said. “The Great Depression is one, but the best is the most recent Great Recession. Not only did we learn from our parents’ mistakes but we also got to see firsthand the effect of those poor choices. We have information more readily available to us. It’s so easy to check accounts on a computer or any mobile device at any time. This allows us to have a greater degree of control over our spending habits.”
