If you’re in your 20s or 30s, you’ll be able to connect to what I’m trying to say. You’ve undoubtedly heard your parents tell you that when they were young (in the 1970s or 1980s), they used to go to school only with a penny and with lots of hardship, they have bought the house or feed you.
Yes, our predecessors had to do a lot of hard work on their own since there was no Internet back then, so they had to rely on newspapers and conversations with other people to find out what was going on across the world and to know how and where they can invest money.
Before the era of smartphones and online banking, the only way to keep track of finances was by balancing a passbook to make sure you could save for that dream house and contribute to the retirement plan.
Millennials, on the other hand, have the advantage of the digital world, through this they can educate themselves about finance and can save more money efficiently than their predecessors.
Why Millennials save money
Back then, pre-millennials used to save money for children's education, dream house, dream car, and retirement, but Millennials have changed that way of thinking exponentially in themselves.
1. Travel
It’s not like the pre-millennials, who merely wanted a home and a good education for their children; this generation is hooked to traveling the globe and experiencing life to its utmost.
Destination weddings, graduation vacations, and bachelor/bachelorette parties overseas have become part of the culture and need some significant financial planning.
2. Education
Even though elementary and secondary school education is largely paid for by parents, millennials are preparing themselves for the hefty cost of higher education.
Postgraduate or management degrees, as well as summer school programs and professional courses, are becoming increasingly popular after several years of work experience.
3. Real Estate
At the very least, everyone on the globe wants a location they can name “Home.” A new generation of Real Estate professionals is emerging, and it’s because it is a never-ending industry, as the Stock Market. Everyone wants to own a home or rent a home. Many Millennials are coming into this business and investing in real estate.
Millennials who aren’t interested in settling down in one area or city. Millennials, who are constantly on the move for their employment, dislike paying EMIs on large loans, therefore they choose to rent rather than buy. To avoid long trips and traffic, they might also rent near their workplace.
4. Invest
Pre-Millennials were not well-versed in financial matters, and they didn’t make enough money to save. Back then, gold and real estate were the only two assets that were known for investment purposes.
Millennials nowadays believe they should invest to preserve money and to protect themselves from inflation. Currently, young people invest in a variety of assets, ranging from high-risk to low-risk investments. Those investments might be in Cryptocurrencies, Stocks, Hedge Funds, Bonds, Real Estate, or a basic Fixed Deposit (FD) account.
5. Using Credit Cards
Pre-Millennials used to believe that using a credit card was getting into debt and that it would destroy their credit score. They believed it was better to use a debit card and utilize the money that they owed, rather than using credit cards and earning credit points.
Millennials understand the value of credit cards and prefer them over debit cards because they know how credit cards operate, they know not to spend more than they can afford, and they know that by paying their bills on time, they may avoid incurring interest and earn credit points on their cards.
They make money by making payments on their credit cards, which the older generation couldn’t since they weren’t financially educated.
6. Health
Millennials know that apart from all saving and investing, they should invest in their body as well. Many have started investing in gym memberships, health supplements, insurance plans, organic food, and Yoga classes.
7. Retirement
Pre-millennials are more conservative and save more for retirement than millennials. But that doesn’t mean millennials don't plan for retirement. They do, but they do less thinking about that, they mostly invest their money and mostly save for money for houses and cars.
Some thoughts to share
Millennials are more financially literate than their predecessors, but it doesn’t mean they don’t want to be. Simply put, there is a generational divide. Every generation has a different set of goals and demands than the previous one.
As a result of online markets, savings, and investment programs, millennials have a wide range of options to select from, when it comes to spending and saving, health, and vacation, millennials seek to strike a balance between them.
While pre-millennials were conscious of their requirements, such as having a roof over their heads, millennials struggle to distinguish between their needs and their wants.
There are more alternatives for millennials now, which is why their saving habits differ from their parents'.
