So many things have been talked about millennials or Generation Y across the web. This generation has seen it all – the great recession from 2007-2009, massive unemployment, economic upheaval, political unrest, attack on the World Trade Center, the advent of smartphones, the gradual development of websites, the obsession with social media, and so on.
The multitude of events had a tremendous impact on the mindset of millennials – both good and bad. They have seen their parents losing thousands of money due to stock market crash, sub prime mortgage crisis, economic uncertainty, unemployment, etc. So, they understand the value of money.
Let’s find out what millennials think about saving and investing. What is their attitude towards these 2 important aspects of finances.
What millennials think about investments
They know the risks involved in investments. They know that stock trading involves risks. They have seen people reach pinnacle of success. They have also noticed people losing their every bit of money during the economic downturn from 2007-2009.
Many millennials don’t want to take risks. They want to play safe game. They want to invest their money in bonds instead of stocks.
You can’t blame millennials for this mindset. They are very much aware of the current financial scenario. They know anything can happen anytime. There are no assurances. There is no guarantee.They would prefer to pay off their student loan debts instead of gambling in the stock market.
Millennials have learned financial lessons from their parents’ mistakes. They don’t wish to repeat the same mistakes. Rather, they want to hone their financial skills and attain financial independence as quickly as possible.
Many millennials use social media and mobile platforms to research on the investment trends. They analyze the portfolios of the baby boomers before investing. On average, millennials spend 7 hours for reviewing the portfolios instead of just 2 hours. They even exchange trading and investment tips in the social media.
My research says that millennials invested $1 billion on the tech-focused personal finance firms from 2011 to 2014. The explosion of Internet, technology and smartphones are perhaps responsible for this.
What millennials think about saving money
The golden years of life are important. Millennials have seen their grandparents and parents suffer after retirement. They have absolutely no desire to go through the same phase. This is why 70% of millennials have already joined retirement plans. In fact, they have started saving in retirement plans at a younger generation than the earlier generation.
Student loan debt is largely responsible for making millennials more saving conscious than previous generation. Since student loans can’t be discharged through bankruptcy and they have long repayment terms, so millennials are petrified of them. Most students carry a huge student loan debt after entering the workforce, which leaves a significant impact on their lives. Some postpone their wedding whereas others postpone their home buying and family plans.
All these factors force millennials to give more focus on saving money. Here are a few strategies millennials use to save money:
- They use digital wallets or cash for making payments instead of credit cards
- They prefer to live with a roommate to reduce the cost of rent
- They avoid large purchases and expensive material items
Millennials are saving more money than the other age groups. As per a survey conducted by Bankrate, almost 191 millennials save almost 6% to 10% of their income for both retirement and emergencies. Saving is also prevalent amongst younger generations. 27% of youngsters with yearly income between $30,000 and $50,000 are saving minimum 10% of their income. But having said that, there are also people who don’t save at all. It is observed that 21% of employed Americans don’t save money for emergencies or other financial goals.
Author Bio: Stacy B Miller is a content editor and writer. Reading, writing and blogging are her three passions in life. You can check out her latest articles at https://www.facebook.com/OV