Millennials have, quite unfairly, gained something of a reputation for being self-obsessed. In being judged as such, there’s a persisting misconception that millennials partake in reckless behaviour (including reckless spending) more so than was typical of the past generation. Yet nothing could be further from the truth, as proven time and time again by studies conducted by the likes of Forbes and Business Insider. Not so surprising, when you consider the mantras that influence millennials’ spending and saving habits…
“All in good time”
The last decade has seen young people choosing to live with their parents increasingly later into their adulthood – with many not leaving home until between 25 and 30 years old. Previously, the decision to opt for rent-free accommodation and free meals instead of independent living might have been deemed lazy or immature. On the contrary, the decision of young people to stay at home for longer is now seen as responsible and financially wise, considering the current economy. Many choose to stay at home whilst paying off their student debt, or whilst saving for a house or business investment.
Similarly, young people are waiting longer before having kids of their own. The average woman nowadays is just as interested in having children as women of her mother’s generation but, unlike the previous generation, today’s youth want to wait until at least 30 before venturing into parenthood. By postponing the life-changing (and expensive) decisions of moving out from a parent’s home and having children, millennials are saving some much-needed money in a market where house prices are at an all-time high and parenthood costs a fortune.
“Clubs are overrated”
Millennials have become known as the ‘stay in’ generation. That’s not to say they don’t like a party – but expensive clubs and rising student debts have led to a bigger trend of house parties and home-made cocktails. Furthermore, millennials are apparently more introverted than their preceding generation – or at least more likely to channel their extraversion online. Not surprising, perhaps, that millennials are content spending Friday nights indoors, with Netflix, video games and Tumblr all providing hours of entertainment at low cost. The internet has facilitated a lot of cheaper options for the average millennial, who can now get takeaway without having to step outside of their home, do shopping without having to trawl through overcrowded stores, and play real poker without having to enter a casino. The luxury of staying at home and still having fun has helped millennials save money in that they avoid transport costs, impulse buys and the temptation to eat out.
As evidenced through Macklemore’s hit song, thrift shopping is as fashionable as high-end couture for today’s young people. ‘Frugal’ is not a dirty word, and second hand stores are all the rave. The internet helps out here once again, as looking online for cheaper alternatives to the high street prices has helped millennials make informed and financially wise decisions when shopping. The competitive technology industry is just one of many industries now producing high quality products at affordable prices, furthermore. In other words – the wider range of choice that has in part been made possible through the internet and globalization allows millennials to save money on their shopping – and become better savers in the process.
Times are hard for millennials. With college fees, unpaid internships and a rising house market, there’s little money leftover – and that’s before even considering a retirement plan. It’s particularly impressive, therefore, that the average millennial is better at saving money than their parents at the same age – despite the average millennial being poorer than their parents at the same age! If you’re a millennial, give yourself a pat on the back. If you’re not – take a note of Generation Y’s playbook.
It’s going to be really interesting in looking at where we (millennials) are financially in 20-30 years. I think one of the key differences between us and previous generations is the huge push towards having multiple streams of income. Thanks to the freedom created by the internet, it’s easy to start up a side hustle and earn extra money.
Plus like you mentioned, student loan debt has become a huge problem so a lot of millennials are bringing in more money out of pure necessity to be able to pay their loans each month. Great read!