Why Millennials’ Financial Outlook is Misguided
A new survey has found that two-thirds (66%) of millennials (aged 25 to 38) believe they’ll be wealthy one day (Business Insider, 2019), despite their low net worth, crippling student loan debts and stagnant wages. There’s an opportunity here for brands to help these confident yet potentially misguided consumers untangle money woes and maximise their financial future.
A survey from US financial advice service MagnifyMoney revealed that US millennials are the most financially confident of the generations polled, ahead of 49% of Gen X (aged 39 to 54) and 25% of baby boomers (aged 55 to 73) who expect to be wealthy in the future. However, their current situation suggests a more challenging reality.
Although positive about their economic future, US millennials owed over $445bn in student loans at the end of 2018 (Student Aid, 2019) – around a quarter of all student debt in America (Federal Reserve Bank, 2019). The repayment of this debt is leading to these young consumers postponing life milestones. Some 61% of US millennials have put off buying a home and 35% have delayed starting a family in favour of paying down debt (SoFi, 2019).
There is a rich opportunity here for brands to boost consumers’ financial literacy by providing accessible information and prompting behavioural change with new apps and services – as discussed in Bespoke Banking.
For example, new app GradJoy empowers millennials to manage student loan debt and reach a more comfortable financial future. Launched in May 2019, the US start-up provides personalised repayment plans for users, which can be edited to suit individual goals. The app displays how long it will take the user to be debt-free, helping to incentivise repayment.
For more on the innovative new ways that brands are helping consumers understand and manage their money, see The Future of Money Spotlight Trend.