The Financial Behaviors of Millennials

July 4, 2020

The oldest millennials are turning 40 this year, and their habits and priorities regarding where and how they choose to spend (or not spend) their money is reshaping our world–financial and otherwise.

Photo by Micheile Henderson on Unsplash

Millennials, also referred to as Generation Y, were born between the years 1981 and 2000. They account for a major chunk of the population, about a quarter of the total US population, at around 84 million people. For reference, the total US population on census.gov on July 19, 2020 was 329,976,227.

You know–one of those numbers that’s so long you don’t actually say it the way your elementary school teachers taught you to, you just call out each individual number. Or estimate and say “almost 300 million.”

Without a doubt, millennials have to be the largest-spanning generation, and in 2020, are the largest living generation.

Over the last decade, millennials have been blamed, pitied, and reprimanded for many of their unique preferences and other generational stereotypes:

  • They’re overly reliant on technology and social media
  • They love their damn avocados (guilty 🤚🏼)
  • They are lazy and entitled – the trophy generation
  • They’re obsessed with being politically correct (PC), and
  • They’re killing industries left and right


There are, of course, some major differences between millennials and other generations, and while they will throw down $10 for a latte, they are also more educated, focused on health and wellness, and saving more money than Gen X and Baby Boomers before them.

To Have and to Hold… Onto Their Money

Given that the fallout from the Great Recession continues to impact the economic future of millennials, it’s understandable that they worry about not being able to pay off student-loan debt, save for retirement, or even buy a home.

It’s often cited that millennials are waiting until later in life to marry and just aren’t as interested in getting married at a young age. In 2012, only 23% of people between the ages of 18-31 were married; however, 63% of millennials are actively saving and 54% even follow a household budget.

According to Forbes, millennials have

  • Lower employment rates than previous generations
  • Lower incomes than Baby Boomers had when they were young adults,
  • and declining median assets, in particular those with student-loan debt


While these statistics might not be super glamorous, millennials have proven stereotypes wrong time and again:

  • Many actually don’t lack budgets. Of the 64% of millennials that are saving, 67% of those with savings goals are meeting them.
  • They have developed disciplined financial habits: 94% use coupons, 40% refer to online reviews and testimonials before purchasing a product.
  • The Bank of America also reported that 47% of millennials have $15,000 or more in savings; 16% have $100,000 or more.


The same Bank of America survey found that top financial priorities for millennials include:

  • Building an emergency fund
  • Saving for retirement
  • Buying a house


In fact, the typical millennial defines financial success not as being rich and indulging in material possessions and luxury vacations, but being debt-free.

What’s Actually True About Most Millennials

I’ve mentioned the significant difference in attitude towards money that millennials have from previous generations, but there are several other characteristics and behaviors that make them such a unique group.

1. Millennials value personal connections–especially with those who handle their money


Millennials hold distinct ideals regarding money and employment. In the workplace, they have higher expectations of their employers than previous generations, seeking autonomy, respect, and fair treatment in the workplace.

They also cite an importance in giving back to the community and expect brands they follow and support to do the same. The COVID-19 pandemic has resulted in the rise of “cancel culture,” with companies who have made a public commitment to charitable causes and citizenship being favored, and organizations and brands who took out excessive funds in Paycheck Protection Program (PPP) loans and others associated with the Care Act – ridiculed across the Internet.

Millennials are known for having a general dislike of big banks, favoring community banks (and brands in general) that offer a unique experience, great customer service, and an overall value for their money.

2. Millennials are more educated than any other generation


See guys, there is a bright side: 36% of millennials have bachelor’s degrees or higher, and (girl power ✌🏼) millennial women are four times as likely as their Silent Generation counterparts to have completed as much education by the same age. In fact, the number of millennial women with bachelor’s degrees is higher than that of men.

More educated is supposed to translate into higher earning potential–if the return on investment in education holds up. Unfortunately, recent Pew data indicates that 57% of Americans believe that the US higher education system does not yield value for the money.

3. Millennials emphasize spending and investment philosophies that enrich both themselves and the world around them


When spending money, millennials deeply value experience and aren’t as likely to spend on materials. They prefer attending live events and cooking at home, giving rise to subscription services, and they are more likely to favor generic items over brand-name if it means saving money. Although they don’t miss out on the latest technology, they prefer to spend on new experiences, adventures, and initiatives that focus on social responsibility.

This is evident in successful marketing tactics of recent years: millennials admit that in-feed ads that are relevant and not intrusive are indeed effective in getting their attention (and money), and that mobile and online technology has a lot to do with their financial decisions, including advertisements and testimonials.

As a tech-savvy generation, they have immediate access to product information, peer reviews, and price comparisons. Social media also influences them to compare (and often conform) to the financial habits and milestones of their peers.

4. Millennials are riddled with student-loan debt and are fiscally risk-averse


In the US, education doesn’t come cheap, so many millennials have student-loan debt, as well as an inability to pay them off due to skyrocketing living costs that are outpacing wages, a broken economy, and a fear of making financial mistakes.

As a result, a lot of them live with their parents; in fact, this is the most common living scenario for the first time on record. Many of them have side gigs, but few have delved into entrepreneurship. Interestingly, credit card debt is lower than average–an example of the effects of financial trauma.

Millennials are also more concerned with their own health and wellness, as well as that of the environment, oping to spend on fresh fruit, organic foods, and natural products. Then again, poor health can become very expensive.

What This Means for the Future and Economy of the United States

Millennials are and (unfortunately will continue to be) in a situation as unique as they are, and there is a lot riding on their success: the fiscal decisions made during the current global pandemic (COVID-19), the levels of tax revenue right now and in the future, the state of and demand for public assistance, the rate of economic growth, and our ability to to maintain the social safety net.

At local and federal levels, trend analysis dictates that the problems afflicting millennials now–prolonged unemployment and underemployment–could cause not only a lost generation financially, but could also become the impetus for future generations of poor academic performers, children and adults who partake in risky behaviors, and long-term impairment in social relationships.

Policy Changes


As the world changes for everyone, it’s also important to adjust for future success–and survival. A lot of the problems that millennials are facing will inevitably create a domino effect on the economy and future generations, and thus impact our current policies.

As a result, economists and analysts are working to develop pathways with growth outcomes, some of which include:

  • Youth employment programs: government and corporate programs that allow young people to receive benefits like housing, living expense allowances, or education vouchers, in exchange for jobs and services
  • Microcredit opportunities for young entrepreneurs: community banks in partnership with incubators, universities, and other lenders providing micro-loans for millennial businesses
  • Major changes to the student loan system: streamlining and simplifying the whole student loan process and putting policies in place to reduce delinquency and default rates
  • Child-bearing benefits: offering generous parental leave policies, child-care assistance policies, and more child-bearing tax incentives
  • Encouraging industry, academic, and government partnerships: working together to find solutions to financial problems within communities without federal intervention, including the growth of online education


There are several cultural norms that contribute to the setbacks millennials are facing. Just as the rest of the animal kingdom evolves and adapts, the government and policies of the US will need to, as well, in order to mitigate some of these difficulties.

It would be great to change the current scenario so that millennials can survive without becoming the lost generation. It would be just as well to clean up some of the mess for future generations.


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