Surprise (or not)—what Millennials say isn’t what they necessarily do. A generation that claims money isn’t as important as quality of life is nonetheless lying awake and staring at the ceiling over financial woes.
A new report from BMO Wealth Management, succinctly titled “Generation Why!” claims the generation benefits from at least the beginning of widespread financial wellness and education, but it’s not reaching everyone.
It finds that millennials are better equipped to make what it calls “positive changes by virtue of their skills and education, which exceed those of any previous generation at the starting point of their careers.”
However, when respondents were asked what personal matters concerned them the most, 65 percent cited their current financial situation as their most concerning personal matter—over personal relationships and jobs.
Reasons and preferred methods for saving
Millennials are generally found to be very conservative with saving. When it comes to saving for major purchases such as buying a home, Millennials favor the following methods:
- Savings account (42 percent)
- IRA or 401K (13 percent)
- Roth IRA (6 percent)
Millennials do not view saving for retirement as an immediate priority.
While 25 percent said they are worried about their ability to ever afford to retire, only 10 percent named saving for retirement their top priority. Thirty-seven percent indicated that retirement is simply too far off and that they have more immediate priorities. In addition, 22 percent of respondents said they would rather pay off their accumulated debts first before starting to save for retirement.
Concerns about the present and future
The survey also found that both millennial men (37 percent) and women (29 percent) are concerned about their lack of financial literacy. The lack of financial expertise may have an impact on Millennial future financial outcomes.
When asked to name their highest financial priority, respondents cited:
- Paying down accumulated debt (25 percent)
- Finding meaningful/better paying work (17 percent)
- Purchasing or upgrading for a new home (15 percent)
“As millennials’ incomes grow, financial planning and literacy will become even more important in order for them to achieve their financial goals,” Stephen Williams, Senior Vice President of Wealth Planning of BMO Wealth Management, said in a statement. “It is imperative for millennials to engage advisors as they start to map out their financial plans, in order to maximize their financial potential in a way that suits their current lifestyle and helps accomplish their aspirations.”