How Do Millennials See Finance: An Insight View

How Do Millennials See Finance: An Insight View

Millennials have overtaken Baby Boomers as the largest generation in the US. Generally considered as the generation of individuals born between 1981 and 1997, today the group comprises over 75 million individuals, or about 25% of the total US population.

A survey conducted by Evenbrite showed that the purchasing power of millennials is about $1.3 trillion.

Businesses simply can’t afford to ignore this generation. Understanding their financial habits is important to create an effective marketing strategy.

Financial Habits of Millennials

Millennials came of age during one of the most troubling economic times in the US. The 2008 financial crisis forced many companies into foreclosures and bankruptcies.

Young millennials had experienced first-hand the devastation caused by the financial crisis. This experience has morphed the relationship with money into something that is unique as compared to the previous generations.


Millennials tend to use cash and debit cards more often than credit cards. This is because the majority of them are already overburdened by the loan. Studies have shown that the millennials own an average of $27,900 in debt.

They have taken loans since their incomes are generally not enough in maintaining their lifestyle. Most of them don’t believe in sacrificing their lifestyle to live within the means. This mindset about finances is the main reason they have overburdened themselves with loans.


Millennials are the biggest savers as compared to other generations. They may be debt ridden due to high amounts of student loans. But their financial position should not cloud you from their saving habits.

About one in three millennials in a survey had revealed that they save between 6 to 10 percent of the income. Bank of America’s 2020 Better Money Habits Millennial Report found that most had started saving for retirement earlier at 24 on average, as compared to over 30 by the previous generations.

Graph Source: Bank of America (2020)

A large number of millennials are saving for future goals and milestones such as retirement and an emergency fund. They see finance as a means to an end rather than an end itself. Most consider savings as important for achieving financial independence and meeting financial goals like owning a house or marriage expenses.


The Financial Crisis has made most millennials hesitant about investing in stocks and real estate. They don’t trust the market and prefer to spend money on far less risky platforms. The massive student also prevents them from investing in the market.

The millennial generation plays it safe when it comes to investment. They have a more conservative attitude about investing as compared to their parents and grandparents. The main reason for their conservative investment attitude is the general mistrust of the financial system. They think that the financial system is working against them rather than working for them to achieve their financial goals.


Most Millennials consider owning a house as an important milestone in life. But the high housing prices mean that most cannot afford to own a home.

House prices have skyrocketed after the 2008 financial collapse. The rents also remain high. On the other hand, wages have remained stagnant. This has made it extremely difficult for millennials to make mortgage payments.

Rigid mortgage loan standards due to the financial crisis and debt loan had made it nearly impossible for them to qualify for a mortgage.

Generational Divide Over Finances

Millennial attitudes towards finances differ across racial groups. Asian Millennials are more willing than other races to invest in stocks and other risky investment avenues. The median Asian household income is higher as compared to other groups, according to the Census Bureau.

Graph Source: Census Bureau (2017)

High incomes of Asian millennials makes them more confident about investing in risky financial assets. They also tend to have less debt as compared to other generations. This gives them more financial freedom to invest in different avenues.

Millennial in the Digital World

Millennials have grown up seeing their lives transformed by technology. They know about the value of digital technologies and are more willing to use them for improved personal and financial outcomes as compared to the previous generation.

Millennials use technology for making social connections. They consider technology as the defining characteristic of their generation. The individuals make use of technology to stay in touch with friends and family members.

Additionally, financial technology (FinTech) has become popular among this generation that has impacted how they invest and make financial decisions. Millennials are using technology for carrying out transactions and making personal financial decisions.

The generation of individuals is more willing to carry out transactions using technology. As a result, there has been a surge in online financial technologies.  Big financial companies have invested millions in FinTech to capture the target market. They have revamped their financial products offering a unique suite of digital-only products that attract millennials.

Having seen mobile technology develop before their eyes, most millennials expect financial transactions through their smartphones with minimum issues. They also don’t have much patience for bad customer experience.

Many tend to switch over to competitors if they don’t get a convenient online banking experience. They prefer financial companies that offer financial technology solutions over companies that provide non-mobile traditional experiences.

Great mobile-user experience is important to attract the attention of the millennials. Companies need to invest in FinTech technologies if they want to grab the attention of the generation.

Final Remarks

The Great Recession and high debt have made most millennials wary about the markets. Although the millennial generation has the highest purchasing power as compared to other generations today, most of the money goes towards financing debts.

Millennials tend to hold back their wealth faced with lower income mobility and rising debt. Businesses need to go at great length in calming their fears about finance. This is important to win the hearts and wallets of the millennials.

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