Finance Trend: Millennials love to learn (about finance)
They’re
worried about their finances, they crave control, they’re used to
quantify their lives, and they love to learn. Add up these four
elements, and you’ll understand why financial education for Millennials
is a thing.
One third (34%) of Millennials, queried by Bank of America last year,
graded their overall understanding of personal finances a C, D or F, and
41% of Millennials confess they are “chronically stressed” about money.
Much of
the stress has to do with the friction between wanting to become and
stay financially healthy, and not knowing how to get there.
Millennials
have seen how their parents struggled when the economy went sour, and
very much want to avoid that. Lots of youngsters refrain from credit cards,
for instance, because they don’t want to endebt themselves. According
to Bank of America, Millennials prioritize saving for the future over
having enough money to live comfortably today (71% vs. 60%).
But
most Millennials simply don’t have enough money. Much of them struggle
with student loans, high rents and/or crumbling welfare systems. So it’s
muy important to get control over their finances.
Main goals to Millennials are: paying bills on time, spending less than they earn, and regularly setting money aside for savings.
In
general, Millennials crave control in all life domains, and they use a
multitude of technology (apps, wearables) to attain it (fitbits,
anyone?). Controlling their finances with the aid of technology, to
them, is self-evident. Apps, banks and fintech that help them quantify
their finances, breaking them down in clear charts, and helping them to
attain their financial goals, are key. Monzo, Simple Bank and a multitude of other fintech are catering Millennials to their needs, but adoption is rather slow.
But there’s more to it than simply showing them how much they pay for groceries and clothing, and to help them save for later.
In order to control, Millennials need to know, need to understand how the financial system works today.
The
financial recipes (e.g. letting banks invest your savings in stocks,
mortgaging the family home for the second time, owning too multiple
credit cards) from the past turned out to be disastrous for many
families, and while the economy might get along rather well today, who
says investing in bonds and putting your meager savings into market
shares might work. How does the financial system actually work? There’s a
lot of mistrust, and a lot of that comes from unawareness.
Luckily,
Millennials love to learn. Challenge them, spark their curiosity, make
them have fun, and before you know it, they’re hooked. Finimize
has understood this only too well. The company sends out one daily
email, in which they break down one financial news feat (e.g. ‘China’s
economy is showing the first signs of a mild slowdown’) in
comprehensible bits.
As the
technologically savvy, digitally centered, social media dominated
Millennial generation comes of age and begins to actively manage their
finances, it is increasingly necessary for financial institutions to
understand how best to engage with them.
Helping
them understand their own finances and/or the financial system as a
whole, in other words: helping them to learn, is a useful strategy to
gain trust and thus future clients. Go teach (in a fun, challenging and
exciting way, thank you)!
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