It’s common for the previous generation to think that the younger ones are less responsible, spend more, save less, and the list goes on! In the case between the grandparents and grandchildren, or Boomers versus Millennials, the Millennials are getting it right in money management, according to Pew Research. The Millennial generation has experienced the same type of economic conditions as their great grandparents did at relatively the same age. There are differences in saving for retirement between the generations as Boomers had retirement plans and consistent employment, whereas Millennials are likely to have more than one job (part time equals full time) with no retirement plan, and inconsistent employment. Boomers entered the work force during the retirement pension era that was replaced by the 401(k) era. They were lucky in that they had retirement accounts that were automatically set up with contributions via pension money. However, they were a generation that felt satisfied by title, or entitlement and the corner office, versus work that was meaningful. This was the ‘keep up with the Joneses’ generation and their spending led to the credit card industry’s birth.
Research studies are concluding that Millennials are spending less, more financially responsible, prefer to pay in cash, and have debt related to education loans and not credit card spending.
The Millennial generation is renting versus buying due to economic insecurity in the job market. They are not able to find jobs in their profession, and are taking less paying jobs in order to make ends meet. They are not paying for items that are considered ‘extras’. Young Money Magazine wrote an article on the generational differences that includes Millennial’s parents and grandparents you may find entertaining. Here is a quick comparison of fun differences between the two generations:
Boomers:
- Land-Line & Cell Phone
- Cable/Satellite TV
- Dress up for Work
- Dining Out
- Buying With Credit
Millennials:
- Cell Phones
- Internet TV- Hulu, AppleTV
- Jeans and Casual Wear
- Eating at Home
- Paying in Cash
Additional information regarding spending and saving between the generations can be found in the 17th Annual Transamerica Retirement Survey. Regardless of your income or what generation you belong to, having a saving and spending plan is important. This goes for both Boomers who may be retired, and Millennials, who are early into their careers.
