Recently on the Van Wie Financial Hour radio program, we discussed the Millennial Generation (a/k/a/ “Generation Y”) and their relationship with money and financial planning. The results were very interesting, and most everyone came away with a better understanding of this very large demographic.
Millennials are roughly described as people born between 1981 and 1996. They are often grandchildren of Baby Boomers, and their numbers are staggering. In fact, they have now replaced (remaining) Baby Boomers as the largest group of Americans. That alone is a Godsend, as that very fact gives Social Security a desperately needed financial boost. The sheer quantity of Millennials will not save Social Security, but it is a huge step in the right direction.
In order to shore up the failing Social Security System, Millennials need to work and pay into Social Security. Sadly for them, the percentage they will have to pay into the System is about to go up, whether or not anyone in Washington wants to admit that inevitability.
For meaningful numbers of Millennials to be employed, they must have a growing economy, fair and free trade, education, training, and a solid work ethic. That is a tall order in today’s Socialist-leaning America. Hopefully, as Millennials get older, they will develop a strong sense of responsibility and purpose, which generally accompanies the aging process. There is hope in the statistics.
Homeownership has become important to Millennials, although they tend to buy later in life than did previous generations. Unfortunately, affordable housing is in scarcity mode at this time, and prices are on the rise. Offsetting pricing somewhat (but also contributing to the problem) is our historically low-interest-rate environment.
Consumer preferences among Millennials are skewed toward experiences over material goods. Travel and leisure are high priorities for the group as a whole. Here again, there is good news, as many are blending experiences with assets, in the form of RVs, campers, boats, etc.
Where Millennials need to play “catch-up” is in the arena of Personal Finance. Only 24% of this huge (72 million+) demographic display any substantial knowledge of finance. Parents and grandparents of Millennials have been enormously successful, and will eventually be passing along trillions of dollars of wealth to Millennials. It would benefit them to understand more about money and investing before that happens.
It is true that Millennials are leaning very heavily on their families for support, especially in housing, but there appears to be light at the end of the tunnel. As much as Millennials have been maligned, large numbers of them are turning to more traditional values and priorities. For their sake, we hope they include having children and growing families.
Finally, the name of this Blog is “Dogs and Cats.” It turns out that Millennials own 35% of the nation’s pets. Good for them, as pet ownership fosters a sense of responsibility. Getting some professional financial planning assistance would be immensely helpful, as well.
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