Special to the Financial Independence Hub
Millennials often get a bad rap for a lot of things. They are usually perceived as narcissistic, entitled, lazy, spoiled, and (perhaps the greatest stereotype of all) irresponsible with money. But having grown up in a sluggish economy, millennials may not be as bad with money as most people think. In fact, when it comes to personal finance, millennials are actually making some smart money moves that their older counterparts would do well to emulate.
Here are five surprisingly smart financial habits commonly used by Gen Y-ers that older generations should consider picking up.
1.) Use technology to manage finances
Millennials are a generation that grew up with technology, so it’s only natural that they would tap its power to help them with their personal finance. These days, Gen Y-ers rely on various mobile apps and tools to easily track and manage their money. Some of the most popular budgeting and finance apps today include Mint, GoodBudget, and PocketGuard. These apps are used to record and track purchases, monitor spending patterns, and even make automated, hassle-free payments.
2.) Choose experiences over material possessions
Many millennials live by the YOLO (You Only Live Once) mentality. YOLO essentially emphasizes the importance of living in the present and making the most out of it. This explains why a lot of millennials choose to spend on meaningful experiences instead of desiring and accumulating material things. Compared to older generations, most millennials aren’t usually enamored by luxury goods such as cars and houses. Instead, most of them indulge in travel, adventure, and food trips.
3.) Save aggressively
Millennials are often criticized for being careless about money. But did you know that they are actually good savers? According to a new study from Bankrate.com, millennials are saving more money today, even better compared to their older counterparts. Sixty-two percent of the surveyed participants are setting aside money that’s more than 5% of their salary for various reasons such as emergencies, big purchases, as well as retirement. According to the study, the biggest motivator for millennials’ aggressive saving could be the fact that they grew up during the recession and saw their parents struggle financially.
4.) Ask for help
Another surprisingly smart financial habit of millennials is their willingness to talk about finances. Compared to older generations, millennials are more open to ask for professional advice or seek the help of their parents regarding financial matters.
5.) Embrace the sharing economy
Some of today’s most popular services such as Uber, Lyft and Airbnb are built around one philosophy: sharing. Uber and Lyft let people share their ride with others; Airbnb meanwhile lets people rent out or share their spaces to travelers. These services allow people to save on costs as well as earn extra money from side-hustle – and guess which generation is driving the growth of this type of business model? Millennials, of course! Coming of age during a recession, millennials are finding creative ways to cut on costs and financially thrive – and sharing is definitely one of the best examples for this.
Millennials are usually judged and underestimated, often unfairly by their predecessors. With their surprisingly smart money habits, it’s safe to say that millennials are definitely changing the status quo – for the better.
Mari Bunal writes for Loansolutions to help educate people in making informed-decisions on taking out loans and becoming responsible borrowers. Being the COO, she feels it is her social responsibility to do so. Learn more from her as she shares tips, advises and stories on finance.