Decoding Gen Y

How the Millennial Generation views money, wealth, philanthropy and careers

Dan Schawbel, Founder and Managing Partner, Millennial Branding

Today's twenty- and thirty-somethings often look at money — and how they earn and spend it — far differently than their parents and grandparents do. Dan Schawbel, the 30-year-old managing partner of Millennial Branding in Boston, Massachusetts, is an expert on Generation Y or the "millennials"— those born between 1982 and 1993. Regions recently spoke with Schawbel about his research.

Q: Do millennials have a different perspective on money overall than older generations do?

Schawbel: People are often surprised to learn that millennials are, generally speaking, a financially conservative generation. Many of them graduated from college during the Great Recession and had trouble finding jobs. They often turn to their parents for financial education, because they don't teach personal finance in college. So they're trying to save money, and basically their whole lives have been delayed. About 21 million are still living with their parents, and they're not buying houses. They don't reach $42,000 in income on average until age 30, and yet they're graduating college with an average of $45,000 in student debt. Much of their income goes toward paying off those loans. Many expect to work much longer than their parents' generation did, partly because they don't think Social Security will be around for them.

Q: That's very interesting. But some millennials are financially well off, right?

Schawbel: Right. It's hard to generalize across a whole generation. So yes, while many millennials have struggled financially, others are doing very well. For example, millennials already make up about 23 percent of U.S. millionaires. There will be a large wealth transfer happening over the next 10 to 20 years, which will certainly benefit many of them.

Q: For those with money to spend, do they spend it differently than their parents and grandparents do?

Schawbel: Generally speaking, they're renters, not owners. They rent apartments, lease cars. They like using services like Dropbox that let you keep files online rather than storing them on their computers. That whole idea of borrowing or sharing something versus buying it resonates with them. They're also very health conscious, and so will spend a lot of money on things like organic food and health club memberships. They care more about spending their money on experiences like travel than on material goods.

Q: Do you see this as just being a temporary shift and millennials will become more like their parents and grandparents regarding money as they get older?

Schawbel: I think we're experiencing a true generational shift. In 10 years, we might see some differences in attitudes about money and spending because, with so many baby boomers retiring, there will be more opportunities for millennials to move up at companies and earn more. At the same time, there are so many changes happening economically right now. There's been a huge rise in the number of freelancers and temp workers, and millennials aren't receiving the same level of employee benefits and job security that older generations received. Those changes will have a huge impact on their worldview.

Q: What about charitable giving? Do millennials feel differently about giving than prior generations?

Schawbel: Philanthropy is big for them, both personally and in what they expect of the brands they buy from. Compared to other generations, Gen Y believes much more that companies should stand for more than just profits — they should make a societal difference. They're forcing companies to consider how they are giving back. Programs like TOMS Shoes' One for One program that gives away shoes to people who need them when customers make purchases resonate with this generation.

Q: Much of your research focuses on how millennials approach their careers. Do you find that they're more entrepreneurial or are having a large impact on the workplace?

Schawbel: Millennials have been more entrepreneurial, but some of that has been out of necessity and their inability to find jobs. Many tried to start businesses, failed and now work for another company. We did a study two years ago with Monster Worldwide and found that baby boomers and Generation Xers are actually more entrepreneurial in spirit than the millennials. In terms of their career views, however, millennials don't believe in working for one company for life. In fact, many change jobs every two years. That's become a huge issue for employers, because it costs, on average, $20,000 to replace each worker who leaves — and it's far more expensive for managerial positions. The workplace has, overall, been challenging for millennials because baby boomers aren't retiring as fast as expected and many companies are eliminating jobs.

The millennials' impact on the business and career world is ultimately going to be huge, however. They make up 36 percent of American workers this year and that share is expected to reach 50percent by 2020. A lot of the old protocols in business are going to change. Suits and ties will be gone. People won't be nearly as confined in where or when they work.

Q: Given these generational divides, how do you suggest older family members share their values about money with their millennial offspring?

Schawbel: Family involvement is very important for the millennials. In general, they are close to their parents and have relied heavily on them, so they value their parents' views. They want, and need, guidance from older generations, so there's a real opportunity for older generations to have discussions with their younger family members and impart their financial wisdom.


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This information is general in nature and is provided for educational purposes only. Information provided and statements made by employees of Regions should not be relied on or interpreted as accounting, financial planning, investment, legal, or tax advice. Regions encourages you to consult a professional for advice applicable to your specific situation. Information provided and statements made by individuals who are not employees of Regions are the views, opinions, or positions of the individual who made the statement and do not necessarily reflect the policies, views, opinions, and positions of Regions. Regions makes no representations as to the accuracy, completeness, timeliness, suitability, or validity of any information presented.

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