Millennials and Money: A Generation of Savers?

Money!by Vincent Diamante

The Millennial generation is earning, saving, and spending more money every year.

The oldest Millennials, now in their mid-30s, are entering their prime earning years, while younger Millennials — many of them well-educated and with high earning potential — are still joining the workforce. Millennials already account for 21 percent of consumer discretionary spending — pumping $1.3 trillion into the economy. And by 2017, the Millennial generation is projected to surpass the boomer generation in spending power — and become the most active spenders of the first half of the 21st century.

How the 80 million Millennials — soon to be the largest cohort of adults in the United States — feel about money and what they do with it will have an enormous influence on the US economy over the next half-century. And Millennials have different priorities, investing and shopping behaviors, and attitudes from those of the generations of consumers who preceded them. Deeply affected by the prolonged economic recession and shaped by the digital age, Millennials have lasting concerns about their personal finances that earlier generations did not share at their age — concerns likely to influence their attitudes about money for decades to come.


  • Millennials, very conservative in how they view (and spend) money, tend to be savers, but few are investors. They are also the most educated cohort in history, with better than one-third obtaining degrees from four-year colleges.
  • More than two-thirds (71%) of Millennials feel they face more economic challenges than older generations do. And older generations agree with this assessment: 74 percent of boomers and 66 percent of Gen Xers think so, too.
  • Despite this, and the formative experience of the Great Recession, members of this generation are very optimistic about their financial futures.
  • Millennials are more likely than older generations to rent and share rather than buy, and many spend more money on experiences than on material goods.


  • As well-educated Millennials continue flooding the workforce, they will soon earn enough to amass significant investable assets. This will open up considerable opportunities for financial planners, as Gen Y will begin to appreciate their value in managing finances, providing sound advice to budding entrepreneurs, and testing the stock market. Providers of such services, however, may need to work on developing approaches and policies that demonstrate and communicate their unwavering dedication to the client, since many Millennials view such companies as self-serving.
  • The exuberant optimism of Millennials about their financial future may serve as an indication of their need for financial education. Many may have unrealistic expectations about what the future may hold and about when they will be financially secure enough to retire.
  • Financial services companies may succeed with Millennials, particularly women, if they appeal to their desire for greater financial security. Since just 2 percent of Millennial women say they never worry about financial security, companies that convince them that they can provide such security will find an eager audience.


More than two-thirds (71%) of Millennials feel they face more economic challenges than older generations do. And older generations agree with this assessment: 74 percent of boomers and 66 percent of Gen Xers think so, too.

  • Price — and the sense that they’re getting a great deal — both matter to savvy-shopping Millennials. Retailers and manufacturers may want to step up their discount offerings, particularly those provided through mobile devices, in order to build relationships with Gen Y consumers.
  • Credit cards — Millennials who have shied away from having a credit card may need a new means to help them obtain good credit scores. This will become a more urgent need for Gen Y consumers as more and more providers of products and services — smartphone plans, insurance policies, and homes and cars (of course) — and even some job opportunities — require credit reports from consumers and applicants. Experian and TransUnion are already experimenting with adding records of rent payments to their credit reports, and Experian is reportedly considering soon adding utility payments, too.
  • Banks — Institutions will need to develop more innovative products and services in order to attract and retain Millennial consumers. Credit cards and loans have diminishing appeal to this cohort. Banks and lenders may, for example, find that Millennials have a greater need for small loans to fuel entrepreneurial ambitions than for home loans and car loans.
  • Experiential learning — The Millennial preference for having experiences is one of the reasons they enjoy brick-and-mortar stores. Retailers should play up their ability to offer Millennial consumers a shopping experience, and focus on enhancing that experience by offering distinctive and fun settings, polite and friendly face-to-face customer service, and logical and convenient layouts.
  • The home and auto ownership — Statistics show Millennial consumers will have an impact on big-box retailers such as Costco and Sam’s Club, since these consumers seldom have storage space for volume purchases and will have difficulty transporting bulk purchases to their homes. In order to remain relevant to these consumers — who will soon be the most populous adult cohort in the United State — such retailers may need to explore new innovations, particularly in customer service. Home delivery — and use of big data to anticipate consumer needs for reorders — may become increasingly important as these consumers become more numerous. Big-box retailers, for instance, may want to consider offering consumers monthly deliveries of prorated shares of their purchase when they buy a three-, six-, nine-, or 12-month supply of certain products.


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