There are actually 2 types of millennials and they have very different financial traits
The younger generation is making its way into the forefront of society, rising up in the workforce and leadership roles. As they grow older, character traits that they once had begin to transform according to the ways in which they handle themselves in the ‘real world’ and what is beginning to reveal itself is that there are two types of millennials. They also have very different financial habits.
In order to properly understand the situation, we need to delve into the origins of what we call the ‘millennial generation’. A definition which describes those born between 1981 - 1996 (roughly 22 - 37-year-olds), this group was eventually divided by their age and the events that shaped their financial condition, particularly the Great Recession.
When the crisis came along, older millennials (who were over 30 at the time) took the greatest hit which in turn made it harder for them to accumulate wealth.
Younger millennials (those under 30), on the other hand, had just begun to enter fresh job markets roughly during the recovery period just after the peak of the financial storm. It was thought that they’d observed the unfolding of the financial catastrophe and were thus better prepared to make safer decisions.
Older millennials evidently suffered greater economic turmoil thanks to the recession, which meant that they dove straight into a much tougher job market, experiencing wage stagnation and student-loan debts that were becoming increasingly harder to pay.
These difficulties also led to other behavioural traits like settling down (having kids and tying the knot) later in their lives (if at all). Homeownership was also a huge issue that correlated indirectly with this fateful turn of events.
The aftermath of the recession forged an arduous path that didn't allow young workers to accumulate as much wealth as they expected. At one point, there weren't many jobs that offered sufficient wages to accommodate savings. Many older millennials had to experience a hand-to-mouth existence before seeing any semblance of financial stability and for many of them, the consequences may have been too major to overcome.
According to a 2018 report by the Federal Reserve Bank of St. Louis, millennials born in the 1980s were at greatest risk of financial turmoil, facing issues like a lack of wealth accumulation. The study revealed that they were the slowest cohort to recover from the Great Recession.
It's not all gloom and doom though. After approximately 15 to 20 years of being in the workforce, millennials have finally reached a point where they may be able to garner sufficient levels of wealth for a more secure future. This includes saving for retirement and buying homes where housing is financially attainable.
Millennials who were born later on managed to forego the brunt of the financial crisis, which meant that they were able to enter sturdier waters by the time they were ready for work. It wasn't necessarily easy since the remnants of the recession had left traces of economic difficulty.
It was, however, typically easier from an employment perspective, which meant that starting a career in your early 20s meant that you had some reassurance.
Furthermore, the younger group was able to learn from the older group's mistakes, saving them the trouble of having to go through the same economic pain as well as bad financial decisions made by their peers.
This ultimately led to a more financially practical, cautious and wealth-savvy workforce. They were able to maintain better-paying jobs, which meant better opportunities with regards to retirement.
There are many factors that dictate the overall outcome of your financial security, some of which can’t be helped. It’s in these instances that preparation and reacting well can be keys to survival. Develop the foresight to notice economic problems on the horizon and begin to prepare for the worst while consistently creating ways to build and protect your wealth. Most importantly, don’t be afraid to seek help from genuine experts that can help you achieve financial security.If you are a young adult or have young adults that are about to come out to the world and would like to know more about being financially secure and what your options are, contact us and book yourself an appointment for a video call, call, or a face to face meeting.