The Thing That Millennials Are Getting Right About Money
June 02, 2017If you know me, you know that it’s no secret I have a strong dislike for breaking down financial statistics by demographics. Yes, I realize that there are some benefits to looking at trends this way, but there’s a little part of me that bristles whenever we start pointing out the differences in people, especially in today’s less than harmonious political climate.
One of my guiding life principles is that people are people, and we are largely the same regardless of our age, gender, race and other demographics. We all want to see our friends, family and loved ones succeed and we all want to enjoy our lives. And while it may seem naïve and idealistic, I’d like to see those who hold opposing points of view start from a point of commonality in their discussions rather than defending their differences.
So while it’s clear that I am not a fan of discussing differences, I’m about to…
The stereotype
One of the things I often hear is that this current generation of millennials doesn’t seem to view working and saving for retirement the same way that older generations do. A common gripe of gen Xers and baby boomers is that millennials (I really despise that label, as do most of the members of that generation whom I know) are lazy slackers who want to be paid well with fancy titles before they ever accomplish anything.
It’s easy to view the next generation as not being as hard working and ambitious as your own generation; I’ve seen that with the way my grandfather talked about my father’s generation and how my generation talks about millennials. Their music is too loud, they don’t work as hard and their standards aren’t as high. It seems like each generation has the same complaints about the succeeding generation as the prior generation had about them. There’s some beautiful irony there.
Surprise! They’re getting this one right
However, I recently came across a very interesting article about the financial behaviors of the millennial generation, which got me to thinking that maybe their bad rap is not justified. The article points out that it may be true that millennials aren’t saving as much for retirement as other generations may be, BUT – and this is a huge point – they do have a higher overall savings rate than other generations. On average, they are saving 19% of their income with over 1/3 of them saving in excess of 20% of their incomes. That’s absolutely incredible! Well done, millennials.
Saving for something else
The thing that irritates older generations though might be that the savings aren’t earmarked for retirement. The savings figures are high, and the money saved is often used for current lifestyle considerations such as travel, fitness & health, and dining out. They are spending money on experiences today rather than building up a gigantic nest egg for the future. Retirement isn’t at the top of their list of reasons to save.
The wisdom of those gone before
While older generations may view that as less than ideal, perhaps it’s just where they are considering their stage of life. And, perhaps it’s wise and it’s something learned from listening to and learning from prior generations. I have heard many older relatives say that they wish they had traveled more extensively when they were younger so that they had more energy and stamina, and their bodies didn’t rebel against long hikes through foreign cities.
A different perspective
Maybe, instead of seeing this generation as snowflake slackers, we should maybe try to see them as incorporating the wisdom of prior generations and putting it into action. Is it possible that millennials are more financially savvy and more mindful of the important things in life than they are being credited for? It’s something to consider.
If you’re a millennial reading this – great job saving so much of your income. It’s a fantastic habit that should translate to a nice bucket of money if/when you actually do retire. If you’re not a millennial and you’re reading this – I’d like to suggest that you maybe try to be more like a millennial and drive your savings rate up above 20%. As they’re learning to listen and implement wisdom from older generations, let’s learn from them as well.