Recently, Bank of America released a survey of millennials (ages 23-37) stating that approximately 16% of them have saved more than $100,000.00 in their savings or checking accounts. The survey is packed with a ton of information that highlights just how different the millennials are than had been assumed by many of the “experts” in the financial services industry. In this entry, I will attempt to uncover how we can help the next generation to make appropriate choices with their money.
As a peer group “73% of millennials say their generation overspends, and 64% believe that their generation is bad at managing money” (Bank of America, 2018)
This generation has a bad reputation for refusing to operate inside the traditional confines of business, for making poor decisions about money, and how to properly manage their future. They are most assuredly not the generation of old. Millennials are a new type of individuals who place their happiness and security above the traditional belief system in having a pension/retirement savings plan in place. However, that doesn't mean that this generation doesn't care about such things. Quite the contrary, in fact, they just don't seem to communicate the same way. The advent of social media, technology, and other means of communication has led to a change of savings habits in this younger generation. They are typically frightened about the future, and don't want to become slaves to corporate America the way their parents and grandparents were. This is likely a byproduct of the financial crisis and perhaps the tragedies of terrorism.
So, one of the challenges is how do we share a message, information, and ideas with these younger people and ensure that both parties have an understanding, the proper communication methodology, and the proper tools to successfully transmit that message. The traditional methods of communication have been shown to be less than effective. The new, more effective way to reach this audience is to communicate using empirical data that can be accessed without face to face interaction. Utilizing technology is rapidly becoming the medium of choice, as each new phone application, social media platform, or keyboard tries to outdo the last.
We are in a rapidly changing environment which has become much more of an exercise in how we communicate versus what is actually being communicated.
With that said, how can we, in the ever changing financial industry, reach these 83 million+ individuals? The answer is probably simpler than originally thought. The answer, somewhat ironically, is in the delivery of the information. Empirical data, by way of new technology format may deliver the information they seek in a medium with which they feel comfortable. If we can figure how to deliver them all of the evidence they seek without direct engagement, it may create a seamless and direct line of communication. We, in the money business, like to deliver knowledge in a direct way with an emphasis on face to face interaction. If we focus on the development of technology that affords us the opportunity to freely share our knowledge without the hindrance of an actual conversation, it will make for a much brighter future for the youth of today's America. I recently heard a quote that resonated with me quite a bit.
"The world has changed more rapidly in the last 10 years than any other time in human history, and the world will never change this slowly again."
If we aren't engaged in the rapid changes taking place in society, how we can we expect the millennial generation to trust our judgement about how they should treat their finances?