Millennials have a complicated relationship with money. They came of age during the Great Recession of 2008, and saw their parents’ retirement savings evaporate in an instant. Their generation will graduate with crushing student loan debt, and famously live with their parents longer post-graduation. Despite this, millennials set lofty financial goals for themselves and are laser-focused on meeting them. Case in point: Over 72 percent of millennials start saving for retirement by the time they are 22. Millennials have learned a few financial lessons, and have a few tips to share with the generations that came before.
Find New Ways to Save Money
One of the best millennial spending habits is their proclivity for comparison shopping. Millennials are price-conscious, and will work to find the best deals possible when making purchases. In fact, 57 percent of millennials admit to comparing prices online while shopping at brick and mortar stores. An even greater 90 percent use coupons to get the best deal on what they are buying. They may not be clipping coupons from the local paper, but they are taking advantage of deals in digital forms. A few popular apps to check out to save big like a millennial: SnipSnap, Checkout51, and GroceryiQ.
Spend on Experiences
Consistently labeled “materialistic,” millennials are anything but. Rather than buying things, many millennials prefer to spend money on travel, concerts, and movie tickets. They value experience over material things. Unlike generations before them, millennials are less likely to finance their vacations using a credit card. They save up between trips, and look for cost-savings when traveling (think: AirBNB instead of traditional hotels to find and finance a more authentic experience).
Start Investing Early
Millennial investing habits are ideal. Sixty nine percent of millennials believe that a 401(k) is a sound way to save for retirement, and by doing so are taking advantage of employer-matching resources. By investing early, they have the opportunity to take advantage of compounding interest over time. They’re more actively involved in the process; 57 percent of millennials feel “in control” of their financial future, compared to 41 percent of Baby Boomers.
Micro Investing Can Have a Big Impact
Investing has changed over time – millennials understand you no longer need to save up to start investing. With apps like Stash and Acorn, investors can start with as little as $5 and build wealth over time. Users can set investing goals and monitor stock performance right from the app. And because it is app-based, any time they make a smart financial decision (like foregoing the morning coffee shop run), they can invest those savings into their portfolio.
Millennials have changed the way we think about money, from saving to investing. They have invented and embraced tools to make financial planning easier and more accessible, no matter what stage of life you are in. Despite this, millennials and boomers (and everyone in between) can agree that a sound financial plan is essential to protecting livelihoods and futures. Contact your Farm Bureau agent to do a SuperCheck®, and ensure you are on the right path to a secure future.