Millennials & Money: One Generation, Many Goals & Values

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In the 2016 Millennials & Money research, the Edelman Financial Services Sector and Edelman Intelligence teams explored the role of money and financial services in the lives of Millennials throughout the U.S. The research revealed their beliefs and attitudes towards money and uncovered how their goals and values differ based on ethnic and cultural backgrounds.

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  • During the Financial Services Trust breakfast in Chicago last year, several of our clients asked us what more we could tell them about millennials. Brands and marketers have been trying to crack the Millennial code years now, so there is tons of research out there on this audiences, as everyone here knows.

    After looking hard for the white space in this category — we commissioned a study designed to examine how millennials view money and how they feel money helps them achieve their goals and live their values. We took the study a step further to uncover how these views differ based on ethnic and cultural backgrounds, which is what sets it a part from other research that’s out there.

    The goal of the study is to help our clients better understand the nuances among this audience, so they can engage millennials on a deeper, more meaningful level and become trusted partners to this generation.
  • IMPORTANT: The chart on the right-hand side are the statistics from this survey. While it’s generally a reflection of the U.S. as a whole, these charts are not numbers gleaned from any government agency.

    Who are U.S. Millennials? Too often this generation is referred to as one homogenous group, but they’re anything but. They’re diverse in age (age groups range from 20 – 35), gender and have different values and perspectives that have been shaped by their cultural background and how they grew up.

    (Walk through stats.)

    Because they are such a diverse and complex group, a one-size-fits-all marketing approach isn’t going to work. It’s imperative that you first understand who they are and what’s important to them in order to effectively engage with them. It’s important to note that approximately $30 trillion of wealth will transfer from baby boomers to Generation X and Generation Y (Millennials) in the next 10-40 years. So, this group may not have assets today, but they will tomorrow. Partner with them now and educate them on the importance of money management and you’ll set yourself up to have loyal, long-term customers.

    Also, we noted that this research differs from other studies on U.S. Millennials and money because it provides a deeper dive into the variances in feelings about money based on ethnicities. Nearly 50% of children in the country today are of diverse backgrounds according to the [INSERT SOURCE]. Understanding their needs and values based on their cultural nuances will be key in engaging these future customers.
  • The objective of this study is two-fold: 1) To understand the beliefs and attitudes towards money and financial services and 2) to help the financial services industry partner with this group to help them understand and use money as a tool for achieving personal and societal success.

    (Walk through each section. Call out that the ethnic differences highlighted throughout the research are quotas defined by the U.S. Census Bureau.)
  • We know that Millennials are not only the largest generation, but the most diverse. Yet, marketers often target and speak to this audience as if they are a homogenous group. In order to reach them, we have to understand their goals and values, which are shaped by where they’ve been and where they’re going.
  • As mentioned, becoming a trusted partner is key in understanding who U.S. Millennials are and how to help them

    Data from the 2016 Edelman Trust Barometer – Edelman’s annual study that measures trust in institutions – revealed that Millennials are more trusting in financial services and offerings than the general U.S. population is. (Call out stats.)

    Through this new research, we will dive deeper to understand how to leverage what is a tremendous opportunity for the Financial Services industry.
  • Here is a snapshot of the key insights uncovered through the research. (Read Stats)
    The most important thing to note is that there are key variations in each of these insights based on their ethnicities, which we’ll explore.
  • Millennials are frequently described as the “me generation.” BUT…when we asked them to describe their definition of the modern American Dream…some very traditional and substantive concepts surfaced. We also asked those surveyed whether or not they thought their modern day American Dream was achievable. And Insight #1 says that they do. But, it’s important to note that their definition of success and the modern day American Dream is about much more than money…

  • And when we dug a little deeper to understand what they believe make them successful, a concept that is often synonymous with having a lot of money, we discovered that their definition of success is about much more than that. For this group, the top four indicators of success were family (80%), education (35%) and health/wellness (35%) and faith (25%). Things like being able to travel and go on vacations, owning a car and having luxury items ranked the lowest at 9%, 6% and 3% respectively.

    When you look at the ethnic breakdown, family was at the top of the list for White-American Millennials (55%) and African-Americans value faith (55%) and education (43%). Faith and education also ranked the highest for Hispanic and Latino American Millennials (39%) and (39%) respectively. [INSERT ASIAN AMERICAN STAT.]

    ::

    NOTES:
    Supporting stats from study:
    Q20. Looking at the list below, which of the following do you believe make you successful? 
    Percentages from all. Not broken down by ethnicity.
    Family – 80%
    Education – 35%
    Health/wellness – 33%
    Faith – 25%
    Financial wealth – 23%
    Children – 20%
    Friends – 18%
    Owning a home – 15%
    Social life – 9%
    Travel/vacations – 6%
    Car – 6%
    Community – 6%
    Having luxury items – 3%
  • As a whole, Millennials in the U.S. are extremely positive and optimistic about their financial and personal futures, which we gleaned from their definitions of success and feelings about achieving their American Dream. Across the board, more than half believe they will be more successful than their parents are, and this is especially true among Hispanic/Latino and African Americans (63% and 61% respectively).

    What’s even more telling, is that an even higher percentage believe their children will be more successful than they are – 6 in 10. Again, African Americans and Hispanic/Latino-Americans were the most likely to believe their children's futures would be even brighter than theirs that White and Asian-American Millennials (73% and 75% respectively).
  • We also asked the group how they define financial stability. Again, we’re seeing things like “being able to provide for my family,” “not having to live pay check to pay check” and “being able to help others in my family if necessary” beat out things like “buying what I want” across the board.

    And even some of the definitions that didn’t rank the highest reflect the importance of “giving back” and the desire for a “freedom from worrying” about their financial situations. It’s less about materialistic things.

    (Call out what ranked highest for each ethnicity.)
  • Insight #2 reveals that despite their positive attitudes towards money, Millennials in the U.S. are facing a tough challenge. They’re reaching many of their personal goals, such as starting a family and owning a home, much faster than they’re achieving their financial goals, which is leaving them uncertain about their financial stability.
  • The reality is, Millennials are approaching a life stage where they’re starting to hit major personal milestones. For example, the study revealed that 1 in 3 are married and almost 1 in 2 have kids. (Stats not on slide.) The problem is, there’s not achieving their financial goals at the same pace, which causes a disconnect. don’t have the necessary financial acumen or knowledge base to manage the responsibilities that come with them. And there lies the opportunity for Financial Service marketers.

    ::

    NOTES:
    Statistical differences among the ethnicities we’re calling out are differences in relation to each other. For example, Asian Americans are more likely to get married relative to the other ethnicities. These scores are not in comparison to the mean, but the relationship to each other.

    Supporting stats from study:
    1 in 3 Millennials are married
    Almost 1 in 2 (45%) have children
    White-American Millennials most likely to be married (40%) than their counterparts
    Only 17% of African-American Millennials are married
    More than 50% of Hispanic/Latino-American Millennials have children
    White American Millennials are more likely to be married (40%) but African-Americans are half as likely to be single. Hispanic-American millennials are more likely to have kids, while their Asian counterparts are the least likely. So there are some big differences here.
  • And this disconnect is making them anxious about their ability to secure a strong financial foundation. Less than half feel they have the necessary tools to help them feel in control, which presents an opportunity for financial service providers to help them feel empowered and offer solutions. (READ STATS)
  • The good thing is, they know that managing their money is a responsible thing to do, but the feeling of worry and a lack of control over their financial futures persist.
  • While U.S. Millennials as a whole understand that managing their money well is important, only 4-in-10 are actively saving for the long-term. This suggests that there’s a disconnect from what they know they should be doing and taking action to secure their financial futures.
  • And there is a disconnect. There are several barriers that make long-term saving an uphill battle for them. Forty-seven percent are supporting their families financially and 39% say they have debut that keeps them from saving. Just over half say they have enough money to meet their day-to-day needs.
  • U.S. Millennials know what they want from financial services companies and how they want receive help. They are telling us how, where and with whom they want to partner for money management help. All marketers have to do is listen!
  • When asked how they would like to manage their everyday banking, and digital and mobile apps are where they want to be. The youngest groups, not surprisingly, prefer mobile, so financial institutions need to make sure they have mobile products, because they will be the best way to reach your next wave of customers.
  • Parents are at the top of the list (68%) but financial advisors (66% - although many said they don’t have one) and banks (48%) are the second and third runners up.

    Over the years, the Edelman Trust Barometer has reported a consistent decline in trust in financial institutions among the general population. However, this data shows there is an opportunity to get in front of Millennials while they are optimistic and work with them on their path to financial stability. But, marketers can’t wait until they have investable assets. The time to earn their trust is now, while they are having difficulty managing their finances and open to your help.
  • They also have requirements for their financial services partners. When choosing a bank or financial services company to work with, close to 70% say social responsibility is a key concern.

    This concern is the strongest among African-American and Hispanic/Latino U.S. Millennials. Just for context, traditionally, the sense of and an obligation to they community is very important to these two groups. [INSERTING THIRD PARTY RESARCH.]
  • Here are recommendations based on the research to help financial services institutions earn this audiences’ trust today to ensure they are your loyal, long-time customers tomorrow.
  • Millennials should not be marketed to as one homogenous group. As the research shows, they vary in their self-ascribed success metrics based on their background and cultures.
     
    Marketers should explore the values of their target audiences in order to partner with them to achieve their goals.
     
    This generation — while generally trusting of Financial Services — will not tolerate Product Marketing (as shown in Earned brand).
     
    They demand two-way communications in order to establish the relationships built through shared value and achieving positive impact. (as shown in brandshare)
     
    Financial education cannot be over looked at any income, age or education level and offers the logical entry point for growing good will and offering stability/societal impact.

  • Millennials & Money: One Generation, Many Goals & Values

    1. • • • •
    2. > >
    3. 64% 66% 57% 62% 60% 81%
    4. White Black Hispanic/Latino Asian More Success than Parents Children more successful than you
    5. 27% 61% 64% 69% 73% 74% 76% Someone else is looking after my finances I can give back (church, community) I can buy what I want Lets me do things in the spur of the moment I can do the things I want to week to week I know the value of my savings and assets Lets me help others in my family if they need it Helps protect me if I Iose my job I don’t have to worry about my next pay check Ensures you can provide for your family
    6. 76% 75% 23% 24% 46% 58% 45% 51% 53%
    7. I depend on others to pay my bills I have enough money should I lose my job… I overspend regularly I have debt that keeps me from saving I find it difficult to save for something major I am actively saving for the long-term I have successfully saved for something major I am financially independent I support my household financially I have enough money for my day-to-day needs
    8. 16% 22% 23% 24% 26% 29% 29% 31% 33% 36% 38% 45% 66% 68% Media / Sports personalities Magazines Blogs, YouTube channels or other online… Credit card companies Search engines Online financial advice app / robo-advisor Faith-based institutions Articles in business news magazines or… Articles in personal finance magazines or… Colleagues Employer Friends Banks In-person financial advisor Parents / Family
    9. 59 %
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