With access to free applications such as Mint or Virtual Wallet it is easier than ever for younger generations to keep track of personal finances. And to make financial matters even stronger, Generation Y is shifting its focus towards having a frugal mindset focused on budgeting.
In high school, Millennials, such as myself, witnessed older generations struggle through the financial crisis and, eventually, understood the impact of the collapse on America’s economy. Due to this crash course on the importance of making smart investments, Gen Y was especially cautious and reflective in the college search process, since opportunities to find jobs after college were particularly sparse and the cost of a college education was at an all time high. With that being said, Millennials are better equipped than any other generation to prioritize saving for the future.
Saving for the future may not be top of mind for a twenty-something who is paying off student loans, but it will likely become a priority in the next couple of years. With our generation, technology and travel expenses are top priorities when it comes to spending in the marketplace. However, USA Today released a column on the shift in the car industry entitled, “Millennials Shifting Commuter Trends.” The article focuses on the change of younger generations’ priorities with purchasing a vehicle. Perhaps it is the ever-increasing reports in the media about the issues in the car industry or the increasing reliance on public transit systems. In fact, one third of all Millennials live in cities, which increases the need for public transportation and decreases making mortgage payments.
Without the dreams of owning a home or a more luxurious car, it is understood that Millennials will eventually find themselves saving for the future. This idea may hold particular relevance since 12 million Millennials are in households that are making $100,000 each year. The aging financial planning industry is also at a turning point, towards refining their focus on younger generations. According to an article, “Aging Financial Advisors Urged to Groom Gen Y”, released last fall by Financial Advisor, “the financial industry will need to add 237,000 advisors within the next 10 years, but 11 years are needed to train the next generation to take over from aging advisors who are nearing retirement today.”
With the aging population of financial advisors, Millennials may be attracted to the idea of saving once there are financial advisors within the industry that are in their generation. Whether or not it is a direct result of working with or for the financial planning industry to save for the future, this idea may provide opportunities for financial planning organizations to focus on attracting the younger populations. Only time will tell.
Bravo Group, Wayne Intern