10 Ways Millennials Are Smarter About Money Than Their Parents

Millennials endure a lot of negative press. Born between 1980 and 2000, millennials were the first generation to be “helicopter-parented” and the first to grow up in the digital age, where almost anything can be accessed in a few clicks. As a result, members of the so-called “Generation Me” are often labeled narcissistic and entitled.

Call them what you will, but when it comes to managing money, millennials have more than a few things figured out. Here are 10 financial metrics where millennials excel — and in some cases, might even be smarter than their parents.

1. They accumulate hard assets. The cost of living is high, especially in big cities, making it difficult for millennials who are just starting their careers to save up enough to buy property. But, Rebecca Rothstein, a Beverly Hills-based wealth advisor with Merrill Lynch, says that’s not stopping them from investing in real estate. “What we’re seeing with millennials is that they are partnering up [to buy property],” Rothstein says. “We give them guidance about how to do that safely, and how to create a partnership structure that allows for a single partner to exit.”

2. The use technology to their advantage. In addition to using apps and websites to manage their money, Rothstein says millennials also go online to research things like financial advisors’ fee structures — and use that information to make informed decisions. “This age group is so internet-savvy,” Rothstein says. “They ask about fees, and will ask, ‘What are you doing for me that I should be paying you for?’”

3. They work on their terms. The notion of wiling away the years in a cubicle is totally outdated, at least as far as millennials are concerned. “We see this recurring conversation with young clients,” Rothstein says. “They’ll say, ‘I don’t want to live the life my parents did, working 14 hours a day like my dad did.’” Instead, millennials are becoming entrepreneurs and using technology that enables them to work at anytime from anywhere — a lifestyle that affords them flexibility to travel, raise children and pursue hobbies.

4. They have a budget. Dara Luber, a retirement and long-term investing professional at TD Ameritrade says that 80 percent of millennials have a budget, according to her company’s 2016 “Millennials and Money” survey. Even more impressive is that 41 percent of them stick to it most of the time.

5. They set financial goals. Luber says millennials are aware of the importance of having financial targets and are likely to start setting personal goals by age 27. “Millennials are also surprisingly more likely than boomers to have written down their goals, independent of a financial advisor,” Luber says.

6. They start saving for retirement earlier. TD Ameritrade data shows that the average baby boomer started saving for retirement at age 31. Meanwhile, age 26 is when millennials start socking away savings. In fact, an impressive 72 percent of millennials have already started putting money aside for retirement.

7. They have an emergency fund. A full 51 percent of millennials report that they have an emergency fund, according to Luber.

8. They know how to see the world on a budget. Millennials don’t need fancy hotels and five-star restaurants to enjoy a vacation. In fact, Northwestern Mutual research shows that 68 percent of millennials said they could take a trip for less than $1,000.

9. They want their investments to have positive social impact. Millennials aren’t content to simply earn a good return on their money. They’re opting for socially conscious investment models, and putting their money into companies that are eco-conscious and give back to the community. As evidence that millennials are driving the impact-investing trend, Northwestern Mutual reports that $3.1 trillion was invested in socially conscious investment models in 2001, and by 2014 that figure jumped to $6.6 trillion.

10. They are optimistic. If you believe that putting positive energy toward something helps to make it so, then millennials have the right attitude about money. A whopping 86 percent of millennials are confident they will achieve their financial goals, according to Northwestern Mutual’s Planning and Progress Study. The study also found that Millennials are the least likely to anticipate more financial crises in the future — just 66 percent, as compared with 76 percent of Gen Xers and 80 percent of people over age 50.


More from Make It Better: