7 Ways Millennials Are Better With Money Than You Are


There's a lot of eye rolling, patronizing, and dismissal of Millennials by older generations — some of which is warranted, some not. But have you ever thought about this cohort of tech-savvy professionals poised to take over the world and stopped to consider that they're spending and saving much smarter than other generations? 'Cause it's true.

What are they doing differently? Take a look at these seven ways Millennials are changing the money game entirely to forge their own path to financial success.

1. Millennials Are Quick to Adopt New Payment Technologies

There used to be only three ways to pay for purchases — cash, check, or charge. But today there are several paperless options that require neither physical money nor the prospect of accumulating debt with credit. These new mobile-based payment technologies are linked directly to a bank account for what's essentially a debit transaction without the card, and Millennials are adopting them in droves.

"Millennials are spending differently today than previous generations and it's easy to see why when you look at the banking technology and tools available to them," says Barry McCarthy, executive VP of network and security solutions at First Data, a provider of global payment solutions. "With 51% of Millennials favoring new payment technologies over cash, debit, and credit cards versus 33% of Gen X-ers and 17% of Baby Boomers, it's no surprise that money management among Millennials — whether they're just starting college or beginning to build a family nest egg — is different."

Some of the smartphone-accessible solutions that Millennials are increasingly using include:

Mobile Check Acceptance

Many Millennials favor banking apps with remote deposit features. A study by Zogby Analytics found that 54% of Millennials would use remote deposit features on their phones if their bank offered the feature. Many banks offer mobile check acceptance for Millennials to engage in on-the-go banking to fit their busy lifestyles. These services, aside from cutting out in-person branch visits, also help promote education on mobile checking, savings, and even pre-paid debit accounts, all within a secure and modern pay-by-check option.

Digital Wallets

Among other things, the digital wallet — which allows people to digitally replace physical wallet contents, including gift cards — is catching on quickly with Millennials, who often spurn cash and plastic in favor of a smartphone. Digital wallets let mobile users upload and store their credit, debit, or plastic gift card info, allowing users to have a view into all of the funds available across their cards and keep track of balances in real time. The mobile device has become an easy-to-use money management system.

Mobile Bill Pay

In a recent report, Western Union found that 38% of Millennials (Generation Y) use apps and mobile tools to make bill payments — more so than any other generation. As Millennials increasingly tap into the bill-pay solutions that companies offer, they'll gain a greater understanding of the payment options available to them to manage their financial obligations, whether using online, mobile, or recurring payments for anything from mortgages to student loans. For the roughly one-quarter of Millennials who missed a bill payment in the last year, reminders can also be scheduled to help make payments on time and avoid penalties or credit score damages.

2. They're Less Reliant on Credit

As a Millennial myself — who's on the older end of the Millennial spectrum, mind you — I know firsthand the financial devastation credit card abuse can bring. I maxed out my cards before my 19th birthday (less than six months after I received my first credit card, in fact), yet it took nearly half a decade to eliminate the accumulated debt. These days I try to live a don't-spend-what-I-don't-have kind of lifestyle, and it seems I'm not alone: According to a survey by Princeton Survey Research Associates International, an incredible 63% of Millennials ages 18 to 29 don't have a single credit card, compared to only 35% of adults age 30 and older who don't have them.

While cash, debit, and mobile pay are preferred methods of payment for Millennials, they're also using prepaid cards for purchases to keep their spending in check, according to David Smith, head of marketing for Kaiku Finance, a provider of prepaid products.

"Research has proven that the Millennial generation is opting for prepaid cards instead of credit cards and bank cards for their wealth management routines," Smith says. "Already immersed in student loans, Millennials are not interested in running up credit cards and accruing more debt. They like the convenience, the transparency regarding fees, and the predictability that prepaid cards have to offer."

3. They're Using Coupons to Try New Products

Millennials are using coupons to try new products with greater frequency than other demographic groups, according to new data from the Shopper Promotion Impact Report (available to subscribers) published by Inmar, a company that provides analytics based shopper engagement solutions for brands and retailers.

Inmar's research for the report — conducted during the first six months of 2015 — reveals several significant differences in the coupon-influenced shopping behavior of Millennials compared to other shopper segments. Specifically, Millennials use coupons to try a new brand at significantly higher rates than older shoppers do.

4. Millennials Are Active Coupon Sharers

I don't just love shopping with coupons — I won't shop without them, in fact — but I also enjoy sharing them with friends, family, and other consumers. Recently I struck up a conversation with two ladies at the Gap who were buying back-to-school clothing and I informed them about an exclusive SMS discount for that day's purchase by texting a code word to a designated number for 25% off. It's something I do often, as do other Millennials.

According to Inmar, Millennials are much more active in coupon sharing than older shoppers. Research revealed that 20% of coupons used by Millennials were acquired through sharing. By comparison, just 9% of the coupons used by older shoppers were acquired this way.

5. They Engage More With Paperless, Digital Offers

Ask a Millennial if they clip coupons and you might render them confused. That's because in their world, physical coupons rarely exist. Instead, their coupons are found on their mobile devices, many of which are preloaded into loyalty-program cards and apps, of which Millennials are accessing regularly.

According to Inmar's research, 22% of the promotions that Millennial shoppers used during the first half of 2015 were load-to-card offers.

6. They're Using E-Banking and Mobile Devices to Monitor Spending

Virtually nobody balances a checkbook anymore as paying by check becomes more and more inconvenient and, as a result, infrequent — but that's assuming you know how to balance a checkbook in the first place. For Millennials, the concept is foreign since many of them have never written a check in the lives. Rather, they've grown up with mobile banking, which keeps everything tallied and logged automatically for quick-and-easy access for up-to-the-minute banking information.

7. Millennials Are Buying Homes They Can Afford

While the rest of America is trying to keep up with the Joneses, Millennials are like, "Who are they?" — especially when it comes to home buying.

"When buying homes, Millennials take their time, more so than Boomers or Gen X-ers," says Pamela Hanson, founding partner of Downcity Home Closing in Barrington, R.I. "A trend we've noticed as a residential home closing firm is that more often than not, Millennials buy under their means. Not so with the generations that preceded them where bigger was better, and the plan was to finance as much of their home purchase as possible."

In fact, adds Hanson, "Millennials often have 20% down, which is easier because they are not buying at the top of their affordability."

"I think being raised with Internet technology as their norm, the whole process of financing is less daunting to Millennials; they are often calm and self-educated about the home buying process."

Are you a Millennial? Does this spending and saving research apply to you? How are you managing your money differently than previous generations? I'd love to hear your thoughts in the comments below.

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Guest's picture

28 year old checking in here. I don't now very many people using coupons or even talking about coupons anymore. When I've gone to look for coupons I can rarely find them for anything I actually buy, so it ends up just being a waste of time for me. A coupon to save money on something I don't need or want isn't saving any money if I buy the item.

Guest's picture
Dan Oswalt

Many millennials also use tools like Mint.com and Personal Capital to monitor their spending and investments.

Guest's picture

I use coupons, mostly the ones that are emailed to me - like Micheal's does with their email newsletters. Also, Meijer has their mPerks system, which is a digital app that you can "clip" coupons and have them automatically applied when you check out. As far as a budgeting app, I use my credit union's money management app. It automatically categorizes most transactions from all my accounts I have, like Mint does. I have credit cards, but I pay them off each month. But I have some student loan debt like whoa.

Guest's picture

I'm 29 and actually work for a credit union. A few of my older co workers always try to get on me about using a check register. I tried it for a few days... I think it lasted a few hours though. As for coupons, my sister is a big couponer and I find more and more of my friends who are mothers are getting into it. Good read, felt like I could relate to a lot of it.