Though today’s 20-somethings have been dubbed the ‘me’ generation, with a reputation of being reckless and irresponsible, nothing could be further from the truth. Records indicate millennials are significantly more financially responsible than their parents were at their age – though ironically less wealthy. From house sharing to thrift shopping, Generation Y take their spending seriously, and are better at saving money.
They live with their parents for longer
Some might describe it as leeching, but others will argue it’s a well-justified means of coping with the current economic climate and, specifically, today’s house prices. Millennials are living with their parents for longer, and it’s not because they’re lazy or unsuccessful – quite the opposite. An article by Huffington Post shows how many young people are living at home whilst working full-time jobs, with the purpose of saving up for their own homes or business ventures. All in all, living with your parents can be a responsible decision for mature and hard-working young people.
They use the internet
More and more aspects of our everyday life is moving online – and becoming cheaper in the process. Whether it’s magazine subscriptions, music streaming, online stores – all have reduced or eliminated costs elsewhere. People aren’t buying albums or DVDs anymore. Books are also going digital, whilst information that once could only be acquired through consulting a specialist is now readily available online. Estate and travel agencies are becoming obsolete. Nowadays, you can buy anything from prescription glasses to furniture online for half the price of what they cost at your local store. Not to mention all the brands which are taking their promotional campaigns online, which these days includes a lot of special offers and discount codes. Whilst millennials aren’t responsible for retail and business moving online, they certainly benefit from it and are wiser spenders as a result.
They’re staying in
Millennials aren’t known for turning down a party, but the financial hardships faced by today’s students and interns have made nights-in a more common pastime amongst the age group. They’re skipping the nightclub and opting instead for homemade cocktails and party games in their own living room. This era has become famous for binge watching on-demand TV, which is enjoyed both as a social activity or as an introverted pastime. This generation would rather stay at home for a game of poker amongst friend than head to the local casino. With the countless takeaway apps now available, millennials don’t even have to step outside for food. By avoiding club admittance, overpriced alcohol, dining out and taxis – the average millennial’s typical Saturday night is significantly cheaper than what it would have been for their parents at the same age.
They’re waiting before having kids
Generation Y are just as interested in having kids as their predecessors – they’re just not in a rush about it. The average age of new parents is rising considerably and, whilst only a small percentage of women are giving birth over the age of 40, a large percentage of women are now waiting until their 30s before having kids. Being a parent is expensive, and it would be understandable to assume that millennials are waiting until they’re further along in their career and in a better financial situation before having children. The reason might also be thanks to an improvement in fertility aides, or because today’s young women are simply less interested in pursuing a traditional path of motherhood until much later in their lives. Whatever the reason – today’s 20-somethings are far less likely to be parents, avoiding the costs that come with parenthood.
They’re starting saving earlier
Millennials have demonstrated the biggest increase in savings rate compared with other generations. In 2013, the average 20-something was saving around 5.8% of their income, whilst that has risen to 7.8% today. In 2015, the number of Americans financially prepared for retirement soared to 45% from the 38% it had been at a few years ago – partly as a result of better spending habits amongst Generation Y. This would strongly seem to suggest that millennials are taking their finances seriously – and are prepared to make sacrifices for the sake of saving money. Obviously, they have had to answer the question of ira vs 401k to help get them started with investing into a pension account, but it’s great to see that the percentage has increased. I predict it will continue to rise over the years, but we will see.