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It’s hard to imagine, but millennials are finally starting to get older. While you may have never thought this day would come, millennials are now beginning to transition into their 30s. With this group becoming older, it’s interesting to see how their spending habits are varying from the other generations and how millennials manage money.
Since millennials are evolving into adults, the way they spend money is becoming more and more important — and it’s intriguing to look at how differently millennials manage money compared to older generations. It may surprise you, but some of these spending habits actually involve not spending money at all.
1. Minimal Spending
Millennials tend to be a contradiction. On one hand, this generation of young adults is quite conscious of their purchases. They don’t like to just throw their money at anything they see. While older generations would be more willing to invest in a house or a car, millennials are more hesitant to pull the trigger on the deal.
Instead of outright buying expensive things, this group would much rather lease the car instead of buying it. However, millennials will also justify a grand purchase under one condition: the purchase is something that will generate lasting memories. It seems that experiences garnered from the objects are more important to millennials than the actual objects themselves.
2. Lack of Investing
Putting faith in the future is quite difficult for younger generations. With a wave of “fake news” and the general distrust of almost everything, it’s hard for millennials to trust the future. With this frame of mind, it’s not hard to believe that millennials don’t like to invest in stocks. In fact, 80% of millennials don’t invest in the stock market.
While it’s easy to understand this risk aversion, millennials should know that with no risk, there is no reward. Stocks rely on this method of trading, and it all flows back to millennials’ lack of trust in both society and people.
3. Not Saving for Retirement
While millennials are saving money, they aren’t doing it for the reasons you may think. Older generations would save for retirement. They would pinch pennies and put them in the bank. Millennials, on the other hand, are saving for the present. They’re saving just to get by.
According to a survey from Wells Fargo, 74% of millennials don’t think they’ll be able to retire. They don’t think Social Security will be readily available to them and they don’t believe they’ll have a break from work. The consensus is they’ll be working until they die.
4. Wanting Personal Involvement with Banks
Once again, millennials are a swarm of contradictions. When dealing with banks, millennials generally distrust them. They had to live through the Wall Street meltdown and housing crisis of 2008 and they were observing and watching as it happened. Unlike the older generations, who wholeheartedly gave their money to the banks, millennials would rather deal with regional banks and credit unions.
Millennials will bank their money if they feel a personal connection to the bank — and it’s not just the banks they feel this connection with. Rather, millennials love policies such as loyalty programs. It all comes back to trust with them. If you can earn their trust, it will go a long way toward helping your business.
5. Millennials Manage Money by Also Focusing on Themselves
While it’s true that millennials don’t invest in stocks or even in others, it’s not true that millennials invest in nothing. In fact, since they don’t trust anyone, they have to look inward to find that trust. It’s been questioned whether millennials can put money into something meaningful and in large chunks. They do. They invest in themselves.
Young startups are a part of this equation. Although many may fail, they still pick themselves up and keep investing in their own future. And they don’t earn the wealth and bank it away — instead, they take the capital they’ve earned and use it to keep furthering their success. Millennials keep an ongoing cycle of money flowing into their interests instead of just earning and saving.
6. Looking for Opportunities Instead of Money
When a millennial is looking for a job, money isn’t always the central focus for them. Instead of trying to find a job that makes a specific amount of money, millennials hunt for jobs that give them opportunities for growth. After all, millennials respect experiences more than they respect material objects.
If they can snag a job in a field in which they can evolve, they’ll be delighted. More importantly, they’ll be happy if they can find a job they enjoy indulging in.
If you’re a millennial, it’s important to understand that trust can be earned. However, you must be willing to give it. Take some time and learn to trust again. Markets ebb and flow. Try to understand this and learn from it.
If you’re not a millennial, try to understand where they’re coming from. If you can understand where people are coming from and why millennials manage money like they do, you'll have a better opportunity of working with them. Moreover, you’ll have a better chance of success with them.
Lastly, have faith in yourself. No matter your age or generation, self-confidence is one of the qualities that can take you farther than you ever imagined. But success comes from hard work — and motivation from that success stems from confidence that what you’re doing is going to do some good in the world. What you’re doing is important. Always remember that.