The following post is courtesy of Tina Roth, a personal finance blogger at ProFinanceBlog.com. Her finance blog covers advices and tips on investment, insurance, budget, personal finance and many more topic for leading a frugal life.
The millennials are 19-34 years of age. They are the target audiences for most digital marketing campaigns. Enlightened and tech-savvy, members belonging to this group don’t hesitate to swipe their debit cards in the terminal slot if a commodity attracts them.
In a time when the online retail vertical is overly focused on them, we cannot ignore them, their purchasing ability, their choice in electronic gadgets and fashion accessories. This article aims to explore millennials and how they manage their finances.
Preference for multimedia ads
Not surprising because the virtual world is bombarded with advertisements. Millennials frequent this world 24/7. Video and mobile ads are most likely to attract them. It’s not an unsubstantiated claim as there are surveys to back it. The result? Frequent usage of credit cards, and more debt, none of which is good. Besides, the big retail networks easily scoop most millennial shoppers because they can spend millions on ads, pushing the local stores to destruction.
Who wants to save when all voices (in and outside of your head) are insisting you to spend more money? Millennials are constantly pursued to save less and spend more. As a result, the money that makes its way into their wallets, quickly finds several leaks to ooze out.
Millennials are far from understanding the role of saving. They should because the recession wouldn’t have hit us if we have been saving money. Heaven forbids another recession, but not saving might very well lead to such a scenario.
They are irresponsible
There’s a term to sugarcoat this, which is “Delinquency.” But it’s only to make some of their behaviors acceptable, which, in reality, are not acceptable. The American Institute of CPA has recently done a study that shows millennials are late in paying out their bills. Such acts of irresponsibility hurts others around them and them the most. What follows is…
Horrible credit score
Millennials have the worst credit report. We know a credit report looks good when it has no outstanding debt, when the time gap between incurring a debt and returning it is less, when you have no outstanding dues on your credit card, etc. In short, when it shows you’ve done everything to raise your credit score. Millennials are lazy and self-absorbed (they admit this), and show no interest to work on their credit reports.
Not paying for insurance
Some of them insure their cars, but the majority are apathetic to health and disability insurance. Mortgage insurance is also not very common among them because many of them live with their parents. Experts believe this might lead to serious consequences millennials won’t remain as healthy in the future as they are now. Any accident and resulting short-term disability might require plenty of money. Not having a disability insurance may prove counter productive then.
We cannot blame the millennials for this. Many of them took student loan, which they are still paying down. A study done by Wells Fargo Management held a heavy burden of debt to be a reason that Millennials can’t save for the retired life.
But have they been saving if the scenario was favorable for them? Doesn’t seem so because they are in…
Jobs with little motivation
Millennials report they hate their jobs. They consider 9 to 5 desk jobs as their biggest financial challenges because of the lack of financial opportunities. The result of this is the lack of professional motivation. Industry experts recommend millennials to look for jobs, which not only guarantees a decent pay, but also which render long-term growth and sustainability.
In case of a stable and secure job, the employer is bound to act responsibly and he may offer voluntary benefits and insurance options to employees. Millennials, therefore, are strongly recommended to search for such a job.
Millennials are not even shortsighted as they don’t even plan for the immediate future. Many millennials are not married, and many of those who are married don’t have children. Those unmarried, don’t save for their marriage. The married ones either don’t save for their offshoots or save little money.
Nearly 68% of all millennials, who were surveyed by private sources reported saving for a vacation is their priority. Saving for such flimsy purposes, and ignoring the importance of an emergency fund might cause them financial trouble in the future.
It’s for their own good. The average debt that each of them is $47689. Unless they make it their priority to pay down all the debt in next 2-5 years, and find new professions, which could generate money, their finances may be affected big time in the future.