Millennials need to be money-savvy

Millennials are probably the besteducated generation in history, but their level of financial literacy is low, they are prone to getting into debt, and they are mistrustful of financial institutions. reports

MILLENNIALS are highly techsavvy, but they need to become more money-savvy if they want the financial freedom they strive for, according to recent surveys of South African millennials by two big life assurance companies.

Are you a millennial? There is some disagreement about the exact start and cut-off ages of the millennial generation (also known as Generation Y), but there is general consensus that the term applies to young people in their late teens or early 20s who are entering the job market through to those in their mid-30s, many of whom are already well established in their careers and have young families.

Much has been written about you, often with sweeping assertions about what makes you tick. What is sometimes lost is the distinction between characteristics specific to millennials and those applicable to the young generally. Rebelliousness, impulsiveness, idealism, a carefree attitude to ageing and death, a certain recklessness with money, a lack of planning for the future – these traits are shared by young people across generations.

What distinguishes you, as a millennial, from young adults of previous generations? The answer, in one word, is technology. Technology has opened up a world of information, communication and life opportunities that was not available to your parents when they were your age. Your character has been moulded by this new world.

YOU AND YOUR MONEY

Your generation constitutes almost half of South Africa’s labour force. So you are formidable group.

The established financial services industry wants your patronage, but it faces strong competition from fintech start-ups, which appeal to your tech-savvy nature.

Traditional players, such as Sanlam and Old Mutual, are researching your generation, eager to understand your money habits and finding out how best to engage with you.

The research shows that, while you may generally be better educated than your parents, you have a relatively low level of financial literacy, and prone to getting into debt. It also shows you aren’t entirely trustful of big financial institutions, perhaps because your parents had bad experiences with such institutions.

The Old Mutual Millennial Survey, released recently, was commissioned to understand better the financial behaviour of employed millennials, versus older generations surveyed in the 2017 Old Mutual Saving and Investment Monitor.

The survey showed that an alarming 47% of millennials polled – nearly half – did not know what a unit trust was and 76% did not invest in one. However, almost 61%