Money and the Millennial Mind
My son is a Millennial—he is 28 and lives in Washington DC. He has a good job at a software company and makes a decent living. But money is always on his mind—is he saving enough? Will he ever have enough to buy a home? How can he get a foothold in this economy with soaring housing and rental prices, and high cost of living in DC?
He’s not alone. Money is on young people’s mind a lot these days. In fact, Millennials and Gen Z have a heightened awareness of their situation and are famously frugally about their spending patterns. Evidence abounds—from the website aptly named The Frugal Millennial to the zillion apps to help them manage their money.
The study by TD Ameritrade, the “Young Money Survey,” was released this summer. It studied the financial habits of young adults and their (and their parents’) attitudes toward money. The “Young Money Survey” revealed that 91 percent of Americans ages 15 to 21 (Gen Z members) expect that they’ll be financially independent by the time they are 25. Their parents are on board: 91 percent of parents surveyed also expect children to be financially independent by age 25.
Money and Stress
With financial challenges from crushing student loan debt to unaffordable housing, young professionals are finding themselves asking for money from mommy and daddy into their late 20s and beyond. Emergency funds are nonexistent. Financial plans are a pipe dream.
And it’s taking a toll at work. ADP reported that at least 40 percent of employees are living paycheck-to-paycheck and money is a top source of stress. That stress isn’t left at home – PricewaterhouseCooper studies reveal that almost half of employees are distracted by finances for at least three hours per week. Financial stress has negative effects on health, time management and concentration. Anxiety about money has been called a “happiness killer” – and it hurts their productivity in the office.
What Smart Companies Do
Smart companies are in tune with Millennials’ money priorities, and it is not all about paying higher salaries, although it can’t hurt. In search of a higher salary and faster promotions – and more money – many young professionals change jobs frequently and take side gigs to make ends meet.
To help reduce employee turnover, forward-thinking companies are offering unique benefits—in the form of coaching and education to help their youngest team members worry less about money. This includes free access to a financial adviser, online education and even in-office lunch-and-learn seminars about budgeting. Larger companies are setting up a pre-tax savings plans to assistance paying off student loan debt.
It turns out, this works: The companies that offer these services are seeing a reduction in employee turnover and a decrease in the number of team members who are distracted by side hustles that take time and energy away from their primary job.
ADP’s study revealed more than half of employees say they would welcome help managing their finances. And, by giving employees the tools they need to stop stressing about money, they can make better choices, be more productive at work, and be less likely to job hop.
Their parents will thank you.