Millennials Need Advice…Financial Advice
The pandemic hurt the wallets of Americans, but in the case of many millennials, the exact opposite happened to their finances. Due to the deferments in student loan payments during the height of the pandemic, along with choosing to live with their parents and having fewer daily expenses to deal with, millennials were able to save up their cash. Now, as the world is gradually opening up and consumers are beginning to spend again, the younger generations are looking for guidance on how to best use their money to reach their financial goals.
How Much Have Millennials Saved?
According to a poll from New York Life, 29% of millennials have built up a nest egg, saving an average of $4,241.21. The poll also found that 61% of millennials took advantage of pandemic-related deferred payments, which led to the previously mentioned increased savings among this generation. Among that group, 48% were able to save toward their financial goals over the past 18 months. While many of those deferred expenses are beginning to return now, with student loan payments resuming on February 1, 2022, the break gave them a chance to build themselves up financially after having lived through the Great Recession and the initial impacts and shocks of COVID-19. Now, there are more millennials ready and able to work toward those long-term financial goals, such as paying off debt and saving for retirement.
A New-Found Openness To Advice
Thanks to this renewed focus on finances, the younger generations with a sizeable nest egg are more likely to seek out financial advice. It’s not just the amount of money they’ve saved up that’s driving them: Many millennials are concerned their financial goals are out of reach or don’t know what steps to take. A study from Broadridge found that 65% of millennials who don’t work with a financial adviser said they are likely to begin working with an adviser over the next two years. Of that group, 53% said that the reason they were likely to work with an adviser was because they’re not on track to meet financial goals, and 46% said the reason was to reduce financial stress. For millennials, working alongside an expert can provide a big confidence boost, and your credit union can give them that confidence with the right approach.
How Can Credit Unions Advise Millennials?
Millennials are a generation that grew up with financial hardship and the rapid growth of technology. Given these past experiences, credit unions need to have a full understanding of where millennials are coming from and what goals they hope to achieve. Keep these few things in mind as your credit union works to provide financial advice to millennials:
1. Leverage social media- If there’s one place the younger generations go when looking for information and advice on anything, it’s online. Among adults between the ages of 18-29, social media websites such as YouTube, Twitter, and Instagram are a few of the most popular social media channels they use, according to Pew Research Center. Create posts on these social media platforms with helpful financial advice they can easily apply. Doing this not only allows you to reach millennials searching for financial expertise, but it also serves as an introduction to your credit union and the services you provide.
2. Be Realistic- As financial experts, giving advice on finances generally comes naturally at your credit union. When it comes to millennials (and any individual member of your credit union), however, it’s vital that you give them realistic advice. Financial-sounding fluff or tone-deaf phrases are only going to make people lose trust in you and run toward someone else’s door.
3. Preparing For Future Challenges- As stated previously, expenses that were deferred during the pandemic’s height are coming back, and it’s no surprise that millennials are starting to worry about paying those expenses again while making sure their long-term goals can still be met. Be sure to keep those returning expenses in mind as you help your millennial members make their plans as they are sure to be road bumps that they will have to face at some point in the future.
Millennials have had to endure not one, but two of the most unprecedented financial crises in recent memory, and that has had an impact on how they see finance and handle their money. Credit unions can help provide much needed security and confidence for millennials to travel down the road to zero debt and retirement, but it will require a thorough understanding of where millennials have been.