If Millennials had one superpower, it would be saving.
Millennials are saving way more than previous generations did at their age. It’s no wonder: millennials have witnessed tumultuous changes in their lifetime. They look at what happened during the Great Recession. They see the lives of their parents and friends changing around them and as a result many are taking steps to avoid similar outcomes.
You could call them a generation of retirement super savers. According to a survey conducted by Transamerica Center for Retirement Studies, millennials are not only saving more than other generations but they are starting earlier as well; as early as 22 compared to 35 for Baby Boomers and 27 for Gen X-ers. That’s quite a head start!
Due to the uncertainty in which millennials became contributing members of society, it really isn’t so surprising to learn of these trends. But if millennials are saving more and more it must be at the expense of something else…right? So what aren’t they spending their money on?
1. Regular TV
There once was a time when the fireplace was the focal point of American living rooms all over the country. The fireplace would go on to be replaced by the TV but now millennials are rejecting the boob tube.
There are more “zero-TV” households than ever, the majority of which are adults under 35. Millennials are increasingly consuming their entertainment on phones, tablets or computers.
They are a generation of cord-cutters. The rise of Netflix and cell phones have coincided with millennials preferring to live without cable TV subscriptions or landlines. More than half of people aged 14-25 are consuming their TV away from a regular TV set.
Strangely, while millennials are saving a bunch they are loathe to actually invest their money. The same apprehension that caused them to save is keeping them away from the markets. 30% of millennials have reported saying that they have set aside LESS than a quarter of their investable assets to equities.
It’s odd, because as a young generation, millennials have plenty of time to ride out any bumps in the road. Getting started early is half the battle!
Millennials want home ownership. A Fannie Mae survey claims that a whopping 9 out of 10 millennials eventually want to own their own home. They just aren’t able to realize that dream due to a number of factors. It’s hard to pinpoint exactly what, but there just seems to be a melange of economic and demographic reasons. Declining wages don’t help, and neither does high unemployment amongst those under 26. Throw in unprecedented levels of student debt and it doesn’t make for a pretty picture.
It means that millennials are putting off the decision to buy a home for later. Between 2006 and 2011, a time period that includes the Great Recession, the home ownership rate for young adults (under 35) fell by 12%. Another 2 million millennials were living with mom and dad – trying to save money to get themselves back on their feet.
The big car companies are scratching their heads when it comes to figuring out a way to get millennials to buy more cars.
In 1985, adults under 35 (baby boomers) bought nearly 40% of all new vehicles. In 2010, adults under 35 (millennials) accounted for only 27% of new vehicles sold. Even the number of teenagers with a license has gone down by a third since the late nineties!
Purchases of new cars and homes have really been the engine behind the American economy for decades…and millennials seem to be staying away from both (for different reasons).
While millennials strive to homeownership the same can’t be said of car ownership. Millennials just don’t appear to care much about owning a car, instead prizing access over ownership. Millennials are increasingly more likely to be a part of a car-sharing service like Zipcar or Car2Go than own a car themselves.
Think back to the picture we painted of your typical millennial. They are likely to be working hard, saving as much as they can, paying off student loans and putting off consumption of big-ticket items for the future.
Because of this financial reality, more and more millennials are choosing to put off marriage and children for later; building up their assets so they can ensure a good financial foundation. Marriage is similar to home ownership in this regard, as a large chunk of millennials reported that they would like to settle down but are waiting to be more financial stable before tying the knot.
This is borne out in the data as well. Almost HALF of baby boomers were married between the ages of 18-32. That dropped to 35% for Gen X-ers and millennials are languishing in last place; only 26% of millennials aged 18-32 are married.
6. Fast food
Millennials crave healthy choices when they decide to eat out. They want food that is healthy, high quality, free of additives and sustainable.
This dietary awareness has led to the rise of fast-casual restaurants like Chipotle, Five Guys and Panera Bread. Along the way brands like McDonalds and Burger King have suffered, leading them to reach for ways to get millennials back to their restaurants.
7. Health Insurance
Millennials are the most underinsured generation alive.
It’s tempting for younger generations, especially ones that are cash-strapped, to skip out on health coverage. Younger people are generally healthier than older generations and when you are young you can have a sort of “invincibility” mentality. Also when you are young, you typically don’t have a family yet or people that depend on you.
And it’s not just health insurance. Millennials are less likely to have auto insurance, homeowners or renter’s insurance or even disability coverage.
There is one silver lining though. Thanks to the Affordable Care Act (read: Obamacare) more millennials are insured than before. Before Obamacare was rolled out, adults aged 18-34 made up 40% of the uninsured. In 2014 alone 3.6 million millennials gained health insurance. Those are eye-opening numbers.
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