Thursday, March 2, 2017

How Millennials Are Changing The Way We Handle Money

How Millennials are Changing the Way We Handle Money

The following is a guest post authored by Jessica Cooper.

Born from the 1980s to the turn of the century, Millennials are careful with their money, but unlike their baby boomer parents, they're had to manage their money in tough economic times. Many of them put off marriage because they can't cope with the expense of a wedding - they also can't bear to be seen to be doing anything in half measures.

They're Doing the Best They Can

There are mixed opinions about who these millennials really are. They actually take quite a bit of flak. Some see them as young people who have found it difficult to break free from their parents while others see them as managing the difficult financial challenges typical to the times they're living in as commendable. They see millennials as those who are at least taking effective steps to find a path toward a more secure financial future.

Their Tech Knowledge Opens other Doors

For all the hassle that millennials take, one thing you can't criticize them for and that's their tech knowledge. They are seriously clued up on technology, and this unusual knowledge has allowed them to secure some pretty well-paying jobs.

It's also created an interest in the stock market and millennials are signing up with  brokers platforms like CMC Markets. They make use of the broker's advanced technology to make some serious side-money. How cool it is for them to suddenly have more money available to pay off those college fees of yesteryear and to get their finances back under control.

It's safe to say that technology is ingrained into the millennial culture, and they've been able to create their own jobs and save the money they earn. Millennials set aside money for a rainy day and make use of advanced apps and tools such as Digit and Acorns to keep track of their spending habits as well as their investments. More than 70% of millennials make use of mobile banking and you can go into the banks on any day, and you won't find many millennials queued there.

Millennials have different financial goals than their parents, and while this could be the result of the 2008 economic downturn, they have managed to make smart financial decisions. They'll have to in the future because their baby boomer parents are going to be passing down assets worth trillions of dollars to them. Millennials won't waste the money for sure, but they do believe in finding fun ways to use the money in ways their parents would never have.

We can take a leaf from millennials' books because their sensible money decisions have been documented. They make smart money moves -
  • They don't wait till they can put away a substantial amount - they save every penny they have
  • Millennials do budget - they save for a goal and not just for retirement. They keep track of their financial goals on their computers and smart phones
  • Millennials may come across as frivolous but they've taught us that you can actually spend your money. They don't want to be like most baby-boomers whose main focus was always on home ownership. They've discovered that putting money into physical things doesn’t alway pay off. The global recession changed millennials attitude to money and to life, and they reject materialism in favour of experiences which they say are far more enriching.
  • They play the stock market because they see it is brimming with various investment options. In every sector, millennials are driving change and they love taking advantage of the high-tech tools that allow them to plough some of their earnings into investment opportunities. They use their mobile apps to do everything from choosing online stock brokers to following stock-picking tips. Millennials don't pick up the phone to buy shares, just a click, while they're on the golf course, is all a millennial requires to make an investment.
The biggest thing millennials are teaching the world about money is that it can be fun to use technology and the little bit of money they have to become involved in exciting investing opportunities. They're more prepared to look at investment opportunities their parents might have regarded as taboo and which can provide hours of fun and also make their money grow.

*Photo is from ITU Pictures at Flickr Creative Commons.


  1. Interesting post! I'm not sure what my generation is labeled--I think Generation X? But I can see that I am much less at ease with using mobile technology than the Millenials. ANy other Xers feel the same way?

    1. I'm right on the cusp, born in 1980. So I'm either a very young Gen Xer, or a very old Millennial.

      And like you, I am not as skilled with my phone as my younger friends. I type texts so terribly that I just speak into the phone now. Oh, and I use it to "call" my "friends", like in olden days.

  2. "They don't want to be like most baby-boomers whose main focus was always on home ownership. "

    Oh how I wish that were true:

    Maybe the Millennials in this article aren't house horny Canadian Millennials?

    *rolls up sleeves* Looks like we've still got work to do...

    1. Yeah, I'd say that the Millennial's desire for home ownership may just be deferred, due to the impacts of the last recession. But they're still there.

      We differ on whether home ownership is generally good or bad -- my stock advice is to tell people just to run the numbers. Home ownership is often a good motivator to get people to dip their toes into personal finance for the first time: learn to budget so you can finally save for a downpayment, learn to run a break even analysis to see when (or if) you come out ahead in owning vs. renting, etc.

      Different story up in Van or GTA, of course, but down here in the States many cities point people to own, rather than rent.

  3. I love how comfortable millennials are with technology and the FinTech revolution that is sweeping through. Hopefully they can continue to innovate and break down the barriers are finance and money.

    1. True, FinTech is getting crazy good these days. I am always impressed by how people can come up with new innovations for optimizing our finances.

  4. I think that depends a bit. I have been teaching millennials at the collegiate level for almost two decades and I do think that technologically they open doors, but most of them are financially illiterate on some of the basic things. One thing that is true is that for the most part my students aren't frivolous. In fact, most of them work to pay partly for school. I guess that is the privilege of teaching higher education in a public setting. But I do think they will be better than the boomers.

    1. You've been teaching over a pretty interesting time. Lots of changes in the classroom and in universities over that stretch (online education, computers & the internet making their way into the classroom, rising tuition costs due to states sending less to their campuses, etc.)

      I agree that most Americans, no matter what age, do lack a lot of basic financial literacy. Luckily, this is not rocket science. Track what you spend, spend less than you earn, invest the difference. That's kind of it.

  5. Being born in 1986, I would consider myself a millennial based on the definition above - even though that term is relatively new to me. Most of the people I know my age are terrible with their personal finance. Most carry debt and live paycheck to paycheck. Maybe it's just the group of people I associate with? One thing I do see quite a bit is how often millennials have a sense of entitlement to things. Perhaps this entitlement is part of the reason why they finance a new car, get mortgages that stretch them and overspend on uneeded things? Just some thoughts.