We’ve all read that headline – you know the one that claims millennials are spending all their easy cash on smashed avocado and backpacks that look like something a homeless man might own. But, is there really any substance to these claims? We decided to look beyond the headline and bust some of those avocado legends. It’s time to set the record straight on how millennials really handle money.
The great Australian dream is not lost on millennials. Despite what modern perceptions and popular culture might suggest, millennials (people born between 1981-1996) aren’t too different from other generations. Millennials now represent almost half of our workforce (44%*). So, it’s fair to say they play an important in our economy for now and years to come.
By the way, if you need quick cash loans, Nifty may have options for you.
The spending behaviours of this generation tend to be poorly misunderstood. The idea that Millennials are spending their limited disposable incomes on smashed avo and latte’s, rather than saving for a deposit is not exactly reflected in research. The common narrative that millennials are more focused on enjoying life’s greatest pleasures, living in the moment – spending money as soon as they earn it rather than saving – is also not reflected studies.
These stereotypes will have you believe an entire generation misuses and mismanages their money. This bad blood is visualised in the 35% rise* in mistrust between millennials and established institutions such as banks.
Whilst the spending habits between millennials and older generations, such as Gen X and Baby Boomers might differ significantly, their financial responsibility is very much the same. In fact, it’s been reported that millennials are adapting to increasing financial pressures. From a higher cost of living to increasing education costs, millennials are utilising products and services to effectively manage their finances, whilst avoiding potential interest repayment traps. Here are a few proven millennial spending habits to bring up the next time your uncle starts going on about the ‘good old days’.
Credit card ownership rates among young people have dropped significantly from 58% in 2002 to 41% in 2019*. Mostly, millennials tend to avoid credit cards out of choice, rather then inaccessibility. From studies, it’s evident that consumers prefer to spend their own money, rather than opt for the high-interest rates and unnecessary fees of credit cards.
Of those millennials that do own a credit card, they tend to have 45% less credit card debt than older people as a percentage of their income. Clearly, young consumers prefer to have more control over their money. When it comes to taking the rights steps towards a healthy economic and financially free future, millennials consider credit card usage a step in the wrong direction.
Afterpay is a buy now, pay later app, that challenges more traditional forms of payment such as cash or debit/card. Millennials love it and so do plenty of other consumers. Since its launch in 2015, Afterpay has been a huge hit in Australia. Today, millions of people use the app for online shopping and, in some cases, in-store purchases. With Afterpay, customers are able to pay off a purchase in 4 equal instalments, rather than pay the entire sum in one go. Millennials believe that Afterpay presents a cheaper, more convenient form of payment when compared with credit cards.
However, the jury is still out on whether Afterpay is a millennial wonderland or an avenue that encourages impulsive buying. Luxury brands top the list as most shopped on Afterpay, suggesting that the option to make smaller payments influences consumers buying decisions. As a result, it could be tempting buyers to spend more than they actually have.
So, while millennials are becoming more financially conscious and reducing their credit card usage, Afterpay could be offering them a false sense of security.
As the gap between the cost of living and wages increases, millennials’ spending habits suggest they are rising to the occasion – not shying away from it. Millennials are often tagged as lazy and entitled, relying on their parents for more serious financial commitments, like housing and transport. However, most use budgets and extensive research to empower important financial decisions. Nick Molnar, Managing Director of Afterpay, said, ‘Millennials often get a bad rap when it comes to how they spend their money, but our research and experience suggests millennial stereotypes are wrong.’
Ultimately, young people are spending less on alcohol and cigarettes compared to their parent’s generation. As these items are taxed and become increasingly expensive, millennials choose not to indulge to suit a tight budget. Instead, studies have found that these savvy spenders are choosing to spend their income on essentials such as transport and private health insurance.
It might be shocking to some, but the fact is millennials are saving more money than their parents. Research suggests young people can adapt easily to shifting economic conditions.. Young Aussies are 29%* more likely than older generations to dip into their savings if they need to, and 9%* less likely to rely on banks.
Millennials also feel obliged to adjust their lifestyle spending due to the increase in house prices and high education costs.
A report by Deloitte discovered that millennials spend their money on similar things to their parents 30 years ago. Kasey Lobaugh stated, however, Millennials are ‘dramatically financially worse off’ due to a number of ‘non-discretionary expenses and the growing divide between high and low-income groups.’
With the stress of having to repay student loans and save for a house deposit, millennials are forced to plan and budget inspiring conscious spending decisions.
For some millennials, struggling to save, living paycheck-to-paycheck, financial management can be the last thing on their mind and can seem overwhelming. However, since the introduction of net banking and banking apps, people can easily track and budget their spending. This overall improved experience of banking has been a huge hit with young Australians. While many older Australians prefer to work and budget on paper, 1 in 3 millennials use online banking and 7%* use online budgeting apps and websites.
These net banking and budgeting apps have categories that show where people are spending their money on a weekly, fortnightly and monthly basis. This is particularly helpful when setting budget limits. For example, you can set a fortnightly budget for transport at $350 and will be notified when you exceed that amount.
This increased use of technology ties into this new-age savvy spending, as millennials utilise technology such as search engines to research products before purchasing them. Product performance and positive reviews are thoroughly scrutinized by young consumers, as people of this generation are less likely to dip into their savings.
If it wasn’t clear before it must be abundantly clear now, the perceptions and stereotypes of millennials are for the most part, false. Millennials are different from Gen Xer’s and Baby Boomers in how they spend their money, but it’s not all smashed avo and $5 coffee, it’s thoughtful financial decisions and digital budgets. The picture that has been painted in today’s economic climate, is millennials have far less money than the generations before they did at their age and therefore must be frugal.
It’s for that reason that millennials are becoming more and more savvy with how they spend their money. Apps such as Afterpay only enhance the consumer experience and improve convenience and affordability. So, rather than lazy or narcissistic, let’s paint millennials a true portrait. One of the smart financial decision-makers that are adjusting to an ever-changing economy, increased cost of living and stagnant wages.
Now well into their 20’s and 30’s, a new generation is likely to surpass millennials as the primary focus for clickbait-y headlines. Generation Z are moving towards adulthood, and are on track to becoming the most educated generation yet. Though not so distant in age to millennials, Gen Z have buying habits of their own. Only time will tell how Gen Zer’s differ in terms of managing money and their spending habits to older generations. One thing is for sure, however: online financial services will expand and grow to capture the attention of these young people.
*Report – How Millennials Manage Money by AlphaBeta
With the introduction of online lending, many millennials have turned to non-traditional forms of credit. Online lenders offer a great deal of flexibility, and mostly, you can apply online in a matter of minutes. That means fast money when you need it the most.
The trick is finding the right lender. If you’ve been busy searching the web for a reliable lender then you’re probably aware of how difficult it can be to choose one. Some online lenders may promise instant approval and no credit checks. So, before you apply it’s important to do some research. Look for lenders that adhere to the code of responsible lending. What is responsible lending? Basically, these are the guidelines set by the government to ensure online lenders do the right thing by consumers.
At Nifty, we’re the trusted name in online lending. If you’re looking for a personal loan from a lender you can trust then you’ve come to the right place. Our team are here to make the whole process as simple as possible. Nifty is ready to give every Aussie a fair go at finding the finance they need, whether they have bad credit or receive Centrelink. We’ll look at a number of contributing factors during our loan assessment process. The good news is, you won’t be judged solely on your credit score. Our team look beyond your credit score by assessing your income and expenses. We’ll do our best to look deeper and determine whether or not you will be able to repay the loan – after all, that is the most important part!
Now you know a little more about Nifty, are you wondering, ‘can I apply?’ We like to keep our application criteria nice and simple. So, here’s what you’ll need to say ‘yes’ to if you’d like to submit an application:
In terms of documentation, the Nifty team will only ask you to provide the essentials. Our 100% online application could only take you a few minutes to complete. Here’s what you’ll need with you:
If a simple personal loan online is what you’re looking for, then Nifty could be the lender for the job! Here’s how you could get started.
Scroll up and use our loan calculator to select a loan amount and repayment period. Hit ‘apply now’ and you’ll be directed to our 100% online application. This could only take you a matter of minutes to complete and our team will only ask you to provide the basics. Once you’ve submitted your form all you’ll have to do is sit back and relax. Let Nifty do the hard work for you!
If our team has been able to match you with a suitable loan product we’ll get in touch straight away. We’ll send over a contract for you to review and sign. The Nifty team encourages you to read over your contract carefully and make yourself aware of any fees or charges you could incur for late or failed payments. If you have any questions at all we encourage you to get in touch with the team. When you’re happy, just sign and send your contract back.
Once we receive your signed contract our team will transfer the funds straight to your account. If your bank supports instant transfers then you could have the cash in just 60 seconds. Otherwise, the money will be in your account in the next round of banking. Talk about simple cash!
Got questions? Head over to our FAQ page or get in touch with the Nifty team today! We’re here to help you in whatever way we can.
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Since founding Nifty in 2016, Bell has continued to make waves within the local financial sector for his continued ambition and willingness to adopt emerging technologies.Read More