Millennials are the “most entrepreneurial generation” yet: How do they save, spend, and invest their money?

Millennials, born between 1981 and 1996 (current age 24-39), are often stereotyped as a generation of narcissistic, self-centered, and entitled young people, earning the title of “Generation Me.” But there is definitely more to this group than meets the eye. Some of the most successful startups that redefined the 21st century were developed by millennials: Facebook, Pinterest, Uber, Shopify, Airbnb, among others. Studies have shown that millennials are the most entrepreneurial generation yet.

In this blog post, we’ll see how this generation is dominating the modern investment race. Let’s discuss about how they save, spend, and invest their money.

On Savings

Apparently, millennials are generally good financial planners, thinking about retirement even at a young age. There is a movement called FIRE, or Financial Independence Retire Early. By taking control of their finances at an early age, the FIRE movement has the millennial generation aiming to retire as young as 30 or 40.

Money, Bills, Calculator, Save, Savings, Taxes

Some interesting statistics compiled by the Security Bank Team:

  • Millennials are more likely to save for retirement 4 to 8 years earlier than the Gen X or Baby Boomers group. (CSMonitor, 2017)
  • 72% of millennials are retirement savers, with 40% savings rate increase among millennials, which means they’re saving a lot more every year. (Nasdaq, 2017)
  • 49% of millennials identify themselves as savers, while 25% consider themselves as spenders. (Experian, 2016)
  • 75% of millennials are actively tracking their expenses (Forbes, 2015)
  • 67% of millennials are sticking to a fixed budget. (Forbes, 2015)

On Investing

Data shows that more Filipino millennials are investing in stock market (Rappler, 2019). In the PSE’s 2018 stock market investor profile report, total accounts broke past the one-million mark, which is 25.4% higher than in 2017. Investors aged 18 to 29 comprised 21.5% of the total stock market account holders. Those in the 30-to-44 age range accounted for 43.1%, while 45 to 59 had 21.6%, and 60 and above for 13.9%. The increase in the number of younger people getting into the stock market was due to the growing popularity of online trading.

Some more interesting statistics on millennials’ investment habit:

  • Almost 8 out of 10 millennials prioritize socially responsible and impactful investing (deVere Group, 2020)
  • 74% of millennials find investing an attractive deal because they can grow their money manifold over time. (Forbes, 2015)
  • Millennials allocate about 25% of their income to investments. (Wall Street Survivor, 2015)

The best investment options for millennials include:

  • For Short-Term Goals
    • Time Deposit
    • Money Market Funds
  • For Medium-Term Goals
    • Balanced Funds
    • Equity UITFs
    • Pag-IBIG MP2
  • For Long-Term Goals
    • Stocks
    • Real Estate

READ: 3 Ways Millennials Can Invest in Real Estate

On Spending

Millennials are said to often splurge on travel, gadgets, numerous cups of coffee, and avocado toasts, a study conducted by Nielsen Holdings, Inc. reported that this generation are actually very careful about their financial future. Despite their social media accounts showing their “extra” lifestyle, millennials are more likely to plan their spending, compared to the older generation.

Millennials tend to spend on real-life experiences that allow them to bond with family and friends. Shelling out cash on holidays or culinary classes is about experiencing life and pursuing passions.

  • 72% of millennials prefer to spend more money on experiences than on material things according to a Harris Group study. (CNBC, 2016)
  • 55% of millennials are willing to spend more on events like concerts, music festivals, and fun runs. (Eventbrite, 2014)

Bottomline is: This generation spend their money as they see fit. They save and investment to secure their future, while experiencing the world and making the most of their youth.