Millennials Not Interested in Money Advice from Those Most Impacted by Great Recession
Inside Subprime: Nov 21, 2018
By Holly Kane
Millennials, it would seem, have trust issues.
When it comes to financial advice, a good chunk of Millennials say they don’t seek out the counsel of anyone, according to Fidelity Investments’ Millennial Money Study, which examined this generation’s attitudes about money and finances in comparison with Baby Boomers and other, older generations.
“When asked who they trust most for information on money matters … almost one in four (23 percent) indicate they trust ‘no one’ when it comes to advice about money,” the study found.
In a study titled, “Millennials in Adulthood,” the Pew Research Center found that, unlike their parents, Millennials (approximately those aged 18 to 33) do not align themselves with religious or political institutions. Instead, they’ve formed digital connections on social media, ascribing to carefully curated digital networks to form and reinforce their identities. Rather than seeking guidance from a religious leader or family member, it seems Millennials are more likely to survey their personalized groups of like-minded friends.
That connection to all things digital can backfire. The Fidelity study found that 63 percent of Millennials think social media – one of the defining characteristics of their generation – harms their financial health. One CNBC article said Millennials are going into debt to keep up with their social media feeds, where personal friends and large-living celebrities can show off their most recent – and most unattainable – purchases. Even though these self-made networks feel more relatable, Business Wire advises young people to look to their in-person network, those friends and family members who are in similar economic situations.
“It’s not that your network can’t be a support system or a positive influence on money habits,” Business Wire said. “But it’s more likely to be people with whom you have closer, personal relationships.”
Closer, personal relationships could still be weakened by a lack of relatability between Millennials and their parents, whose own early adulthood likely looked entirely different.
Millennials are known for entering the traditional constructs of adulthood slightly later than their parents or other previous generations. At the age Millennials are now, half of all Baby Boomers were married, compared to a quarter of Millennials, although their avoidance of marriage may have more to do with a lack of financial security rather than emotional issues. A U.S. Census Bureau study found that Millennials with steady incomes who own their homes are more likely to enter into marriage.
Millennials are more educated than their parents, and as digital natives – those who did not have to adapt to rapidly changing technology – their knowledge and experience has left them with a more cynical but possibly more accurate view of U.S. politics than their parents, which could be why Pew found that only 19 percent of Millennials said people could be trusted, compared to 40 percent of Boomers.
A 2017 report prepared by Merrill Lynch that looked at the financial habits of Millennials found that this economic insecurity, in part due to living through the recession of 2008, found this generation’s goals to be geared more toward independence and less toward following in anyone’s footsteps.
“Uniquely shaped by their coming of age during the Great Recession, millennials appear determined to achieve their future goals with their ‘do-it-myself’ attitude,” the report said.
Having watched their parents’ retirement accounts drained and steady jobs lost as a result of traditional financial actions, Millennials were left with a sense “economic pessimism,” said Eric Uslaner, a professor and expert on trust, in a Washington Post guest article.
The Merrill Lynch study found that 85 percent of Millennials said they will “play it safe” when it comes to financial and investment decisions “after witnessing how the recession affected their older counterparts.” Their economic experience also influenced their decisions to buy real estate, start a family and pursue an education – all of which they plan to do once financially stable. Most indicative of the generational difference and gloomy economic outlook is Millennials’ top response when asked what they are most likely to rely on in 20 years was their own savings account – self-funded and self-maintained – compared to seniors, whose top response was their pension.