How Baby Boomers And Millennials Handle Finances Differently
Each generation views money management and understands wealth differently. Baby Boomers and Millennials are both large generations. There are 79 million Boomers and 82 million Millennials in United States. Millennials are people born between 1980 and 2000, while Baby Boomers are the generation born between 1946 and 1964.
Power of spending
According to Cara Newman, editor of Young Money, Millennials have a lot of spending power. She cites a “Generational Media Study” showing that there are 82 million Millennials compared to only 48 million Gen Xers. She suggests that this is the “largest generation of young people since the baby boomers.”
Newman explains, “They already spend $170 billion a year, of their own and their parents’ money. Whether you are interested in marketing to them, managing them or simply getting along with them, it is important to understand a few basic beliefs of the Next Generation.”
The Great Recession
Neale Godfry of Forbes agrees. She observes that the Millennial generation may have more in common with their Great Depression grandparents than meets the eye.
According to a Wells Fargo survey, the effects of the Great Recession of 2008 have affected the generation to a huge extent. Of Millennials, 80 percent say the recession has taught them that they have to save their money “now” in order to “survive” economic problems in the future. While 45 percent aren’t saving for retirement, slightly more than 50 percent are saving.
The difference varies by gender, as 61 per cent of men and 50 per cent of women reported that they were saving. The findings were a part of the “2014 Wells Fargo Millennial Study” conducted online by Harris Poll for Wells Fargo. The survey encompassed over 1,600 U.S. adults aged 22–33 (Millennials) and over 1,500 U.S. adults aged between 49 and 59 (Baby Boomers).
The social media generation
With their smartphones and tablets, Millennials are the first social media generation. They crave genuine networks and interactions with people. Aware of the problems of the Great Recession, Millennials work differently when it comes to their finances. They can build relationships via social media outlets like Facebook and Twitter to cultivate relationships and garner businesses and advice from financial experts.
Retirement
Millennials have already started planning for their retirement. According to Godfry, “If longevity studies prove accurate, [their retirement] will be a lot longer than ours. Here, teaching compound interest is a must. Just $200 US saved and invested per month at 6 percent interest, grows to half a million in 45 years.”
Diversifying your portfolio
Godfry also advises that Millennials learn to invest while they’re young. Learning how to invest also helps them invest with diligence and take calculated risks when it comes to their finances. Of India's 1.2 billion people, approximately half are under the age of 25; that is, over 250 million are categorized as Millennials. One key factor is that Indian Millennials appear to describe more feelings of positivity and neutrality when compared with the two prior generations.
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