Defying the notion of the ‘financially fragile’ millennial
MANILA, Philippines – Filipino millennials get a bad rap when it comes to money.
Studies indicate that this generation – or those in their 20s and 30s – is not responsible when it comes to managing their finances.
According to a local survey conducted by the Social Enterprise Development Partnerships, Incorporated (SEDPI), they’re the least financially literate generation, behind Baby Boomers (those in their 60s) and Generation X (those in their 40s).
The same SEDPI survey also states that 8 out of 10 Filipino millennials don’t have an adequate emergency fund. Instead, they’re burdened by consumption loans, which they use to pay for various short-term needs instead of long-term investments like real estate.
If they do have savings, they’re setting it aside for travel, according to a separate survey conducted by Rappler.
Why are millennials short of cash?
They’re characterized as an entitled generation who lives in the moment. They prioritize their immediate wants, and choose to pay for experiences and material wants to enhance their present, rather than protect their future.
They’re highly educated, idealistic, and keen to innovate at the workplace. But they’re also financially fragile, according to a study by global services firm PwC. They worry about debt and whether they can ever earn enough.
They’re also pressured by social media to succeed and look good, which may lead to indulgent and impulsive spending. It does seem harder to think about retirement, when your daily social feeds show your favorite Instagram stars hitting the beach every weekend or wearing the latest slide-loafer shoe hybrid.
Time to step up
Since the millennial generation is identified as those born from the 1980s to 2000, older millennials are now in their late 20s or early 30s.
This means that some of them are already fairly senior at the workplace, running their own businesses, or starting a family. If they’re single, some of them may already be breadwinners in their households.
As they hit their adult years, millennials are starting to embrace bigger financial responsibilities.
In addition to food trips, travels, and movies, there are now bills to pay.
Working millennials also look forward to helping out their parents for household or medical expenses. It’s a common goal for Filipino youths to be able to give their parents a comfortable retirement.
Fortunately, Filipino millennials are more optimistic about their economic status compared to other millennials, according Deloitte’s 2017 survey. It would be better if this outlook is combined with better financial habits.
Because they’re digital natives, millennials are using technology to increase their financial literacy skills and choose the right products and tools.
When Rappler posted a series of questions about finances recently, netizens responded that they use debit cards in tandem with cash and credit to pay for purchases or for treats for their loved ones.
When asked about what’s the most convenient way to pay, the answers were a mix of cash, debit, and credit, with more respondents saying they pay with cash.
Millennials should not be discouraged from treating their loved ones or pursuing the things that make them happy, but it doesn't have to come at the cost of their financial well-being.
Going cashless can be seen as a way for millennials to step up in terms of financial responsibility. Using debit cards, for example, strikes the balance between convenience and staying within one’s means.
In the same set of questions, when asked if going cashless works for them, respondents said that they found it safer than carrying bills. One user said that it helped her monitor transactions through her bank’s app.
For millennials, going cashless can be the first step towards better financial management, which, in turn, is a way for them to achieve their goals on time.
Financial stability is not achieved overnight. Millennials need to adopt stricter saving habits, learn more about investing, and learn to curb their YOLO (you only live once) tendencies when it comes to food, shopping, or travels.
Once they’ve fine-tuned their money habits, they can go ahead and enjoy the fruits of their labor. It’s much more rewarding, for instance, to treat the family to a vacation without worrying about debt.
It’s also easier to indulge in new shoes or a stylish outfit knowing that there’s an emergency fund set aside for accidents, health scares, or disasters.
As their roles in life change, the challenge for millennials is to defy the notion that they’re “poor.” Information is key to overcoming this stereotype. – Rappler.com