If you have watched the movie Deewar, you need no introduction whatsoever to the famous dialogue delivered by Amitabh Bachchan, “Aaj mere paas bangla hai, property hai, bank balance hai, gaadi hai.” This suitably highlighted the general mind set towards financial security among the generation born between 1946 and 1964. It underscored a sense of materialistic value to money and it was considered ideal if you owned property, had a bank balance and a car.
However, among the middle-class, the focus was on the virtues of simplicity and job security. In comparison, are Gen Y, the millennials, rather lax about their approach to money? The growing trend seems to indicate that many 20-somethings today do not consider the ownership of property, automobiles, and a steadily growing bank balance of paramount importance. A stark difference from the generation born between 1965 and 1980. Many millennials gravitate towards spending money on things that offer instant gratification and possibly are loaded with unique experiences.
Let’s look at how millennials are redefining the world economy
Here we will give you a glimpse at the financial traits of millennials.
It is evident that the hierarchy of needs among millennials has changed in comparison to generations before them.
A survey by Goldman Sachs will give us some statistics and highlight the new trends. 30% of millennials do not feel they will buy a car in the future. 25% are rather indifferent to the idea and may buy a car if they really need it.
When it comes to having a roof over their head, 40% feel that it is very important to have their own house. 30% feel, although important, it is not a priority. 15% do not intend to buy a house in the near future.
Additional Reading: Money Habits Of Millennials
The rent trend
There has been a growing number of older millennials who are opting to rent homes, rather than buy one. The percentage of renters in 2005 was at 52% and this spiked to 60% in 2013.
Additional Reading: Should I Buy A House Or Continue Staying On Rent?
No hurry to get hitched
Young people today are in no apparent hurry to get married and set up their homes independently. The percentage of those willing to do this has dropped by more than 50% since the 1960s. What’s the scene with children? Oh, that can wait.
They prefer access, not ownership
Today, millennials are increasingly leaning towards getting access to services that do not include the burden of ownership. This is giving rise to a sharing economy.
The instant generation
Gen Y comprises those individuals born between 1981 and 2000 and this generation seem to live to explore, are highly driven, are open to unconventional thinking and living their passion.
Millennials are poised to reshape the economy in terms of their spending habits. Over 64% of India’s population are predicted to be between 20 and 35 years of age by the year 2021.
Many people belonging to Gen Y look forward to gaining experiences rather than focus on acquisition. Many Indian millennials pursue entrepreneurial dreams and consider a home restrictive. They prefer not to spend time on anything they consider insignificant.
Some millennials feel they could choose a fancy life now rather than live life saving for the future. This, however, does not mean that they do not save for a rainy day.
It is evident that the mind set of millennials towards finances is drastically different from earlier generations. Older generations may term this preference for the good life as being lazy about planning for the future. But, the way many millennials see it, they are too busy with living in the present.
Millennials as decision makers
The general perception about millennials is that they are more aware and are more likely to make more informed decisions about buying or investments.
Many millennials in their mid-20s are into their third or fourth jobs. If you are considering what drives them to change jobs so frequently, the answer is opportunity.
Some interesting statistics about millennials and money
A study by Deloitte and DeBeers Group found that millennials mirror a global trend.
Among millennials, 52% expect to leave their employers in the next 2 years, if given a choice. 76% of millennials expect to find new employers by 2020 if opportunity comes knocking.
About 50% of diamond jewellery sold in India was purchased by millennials in 2015. Across 19,000 millennials in 25 countries, Indians topped the charts, were working 52 hours per week, according to a global survey by Manpower Group.
Many millennials also feel that while financial security is important, living your dreams takes higher priority.
Must Read: Good Investment Options For Retirement
So what do you think? Could a trend of overspending and ignoring financial planning for the future be a hazard for the new-age generation? Leave us your thoughts in the comments.