Challenge expectations and assumptions about millennials

Challenge expectations and assumptions about millennials

How do we perceive millennials, and what do we expect of their financial behaviors?

April 27, 2016

Do you know the habits of “The Average 29-Year-Old”? Your expectations may not meet reality for many millennials.

“The impression of young people in the U.S. today is warped,” says The Atlantic. “In trend pieces, the word millennial has become shorthand for ‘a college-educated young person living in a city.’”

However, this assessment is not exactly true.

Most born from the early 80s and late 90s are not college grads, do not live in a metropolitan area, and “generally hate being called ‘millennials’”.

Rather, the average 29-year-old has taken some college, held a variety of jobs, and is not as apt to be married as their parents were at 29.

Other trends:

• Median income for a 29-year-old is $35,000. Having held more than seven jobs is the norm.

• 60% are married or co-habiting, compared to 84% of 25- to 29-year-olds in 1960 who were married.

• Only 35% are homeowners, and they tend to live in the suburbs.

As the article indicates, “‘average’ is easy. It’s a memorizable number or factoid. More important is to appreciate the diversity of experience… Nothing is ‘normal,’ really.”

This week, challenge your assumptions about millennials. Research findings reveal discrepancies. What do you know to be true in your membership?

‘Every generation laughs at the old fashions, but follows religiously the new.’ –Henry David Thoreau

How do we perceive millennials, and what do we expect of their financial behaviors?

See “Are Millennials Ignorant About Credit or Just Prudent?” at TheStreet for some perspective.

An Experian study reveals millennials lack knowledge about the workings of credit, and despite a wealth of information, they do not access it. “Perhaps it’s not as much of an area of interest,” notes Sandra Bernardo, manager of consumer education at Experian.

According to Experian:

  • 43% do not know how to apply annual percentage rates on credit card payments;
  • 38% do not have awareness of late payment penalties; and
  • 30% do not know grace period policies for their credit cards.

Part of the difficulty is the complicated nature of personal finance. Still another view is that the average millennial lacks knowledge about credit card limits because they do not intend to reach the limit.

Looking at small data points does not indicate a larger motivation. “For many millennials, learning irrelevant information just isn’t that important… This is a situation that calls for context, not a crisis.”

Can Millennials Save the U.S. Economy?” asks MarketWatch. It is speculated this cohort could be a driving force “despite many factors working against them.”

They already comprise the largest group of the U.S. workforce and within five years will represent half of it. Further, they spend about $600 billion per year, an amount that could more than double by 2020.

Even with growing wages, millennials confront large student debt and ramifications of the recession like having lower-paying jobs and less money to invest. Further, aging baby boomers will require expensive care.

Are millennials expected to carry a larger share of economic burden? Is this reasonable? How might we view the preparedness of others as a result of our expectations?

‘Leadership is not about the next election, it’s about the next generation.’ --Simon Sinek, management consultant and author

What do we assume about the reluctance of millennials to enter the housing market?

According to, the “Missing Ingredient for Millennials: Down Payment Savings.” Most consumers under age 35 do not have appropriate savings for house down payments, and are consequently delayed in acquiring a home.

A survey of renters shows 37% of millennials have nothing set aside for a down payment, yet 79% of millennials want to become homeowners, “illustrating a troublesome gap between expectations and financial realities.”

Without a 20% down payment, “some buyers are pursuing alternatives that allow substantially lower down payments,” the article notes.  This causes others to wonder, “What does that do for our financial system—especially since we had the financial crisis less than 10 years ago? Are we willing to let homebuyers be highly leveraged?”

Meanwhile, “Millennial Homebuyers: Go Big, Or Go Home,” says Apparently, affordability is not the only reason first-time buyers fail to enter the market.

“It could also be they just want more than their parents did. Three-quarters of first-time homebuyers say they are looking for a home that will serve them long term, perhaps accommodating a family,” the article notes.

Sixty-nine percent of survey respondents indicated they will wait to buy until they can afford something other than a starter home.

“A home is much more of an emotional decision and a life priority decision,” and millennials are “willing to do what it takes to afford more,” including sacrificing on travel, a car, clothes and their social lives.

Another reason for failure to buy at a lower price point is that “there are not a lot of starter homes around.”

Why do you assume millennials fail to make home purchases?

‘I’m thankful for the three-ounce Ziploc bag, so that I have somewhere to put my savings.’ --Paula Poundstone

Many views exist on the saving situation of millennials. What motivates them to save or not?

One opinion: “Millennials Struggling to Save Money,” per the Journal of Accountancy. “Millennials want to save more money but low salaries, high living expenses, and poor financial habits get in their way,” the article claims.

Thirty-four percent of millennials label saving as a top priority, and 65% admit impulse shopping is an obstacle.

Twenty-seven percent save for a house, 26% for a car, 15% to start a family, 40% to build emergency funds, and 22% for retirement.

An article at agrees “Millennials Short on Savings. In fact…they’re pretty clueless about finances,” according to results of a Harris Poll.

Still, 34% say they are hopeful when they examine their retirement accounts.

Bankrate says “Millennials Increase Their Savings but Financial Security Slips,” yet “millennials… are the age group most comfortable with their financial situation.”

The article further claims “27% of Americans with annual incomes from $30,000 to $50,000 are saving more than 10% of their incomes, outpacing the 24% of Americans with annual incomes of $50,000 to $75,000.”

A post at also remarks upon the Bankrate savings data, noting millennials are good savers as a result of watching their parents deal with the recession: “They’re a little more concerned with financial security.”

Managing student debt, too, might make millennials more inclined to save than splurge.

Finally, millennials may actually influence other generations in innovative ways to go about saving, per the CUNA Economics and Statistics blog.

Despite burdensome debt loads and low salaries, millennials are creative savers, doing so “by any means necessary,” including finding roommates to split the bills; delaying milestones like marriage and home buying; using technology to help track spending; and by reassessing financial goals.

Millennials, like every generation, confront financial challenges.

Pearl S. Buck said, “The young do not know enough to be prudent, and therefore they attempt the impossible—and achieve it, generation after generation.”

Perhaps that is an important consideration for those who hold expectations and assumptions for this important cohort.

LORA BRAY is an information research analyst for CUNA’s economics and statistics department. Follow her on Twitter via @Bray_Lora and visit the CUNA blogThe Research Roundup: Economic Perspectives.