We have all heard the stories about how millennials don’t value money. They just hop from job-to-job and aren’t interested in growing up, becoming homeowners or using credit cards. I’m not buying it and you shouldn’t either. In June, the U.S. Census Bureau reported that the 75.4 million millennials in America (ages 18-34) officially outnumbered the 74.9 million Baby Boomers (ages 51-69). This younger group represents a huge potential workforce armed with diverse skills and great potential for our companies. It is also one of the largest groups to come of spending age and is an active force in our communities. The better we can understand the hopes, dreams and fears of this group, the easier it will be to attract, motivate and work with them.
At Credit Karma I have been lucky enough to work with some amazing young people who are busy every day inventing new ways to do things with a focus on helping people be more efficient, happier and financially healthier. I see it in their faces and in our membership. In fact, of the more than 60 million people from all over the country who look to Credit Karma to help them make smart choices about their finances, over 27 million of those are millennials.
To even better understand what motivates this large chunk of the population, we asked them about their progress on typical “adulting” milestones. With the help of Qualtrics, we surveyed over 1,000 people between the ages of 18 and 34. It turns out they are interested in pursuing the American Dream and are motivated by a lot of the same things that their parents and their parents’ parents cared about – family, a home, a good job. The challenge is that they are trying to accomplish all of this in a post-2008 world. Here are some of the insights we found that could make working with and solving problems for millennials easier.
1. Give the post-recession generation some credit.
Older millennials were just graduating when unemployment spiked, bank lending slowed and many of their parents lost their homes in 2008. Of course it impacted them. Almost 86% said it shaped their beliefs about personal finance management at least slightly. But these consumers are still moving forward. Even in the wake of a banking crisis, many people still use credit cards to manage cash flow and get by. Our research shows that a majority of millennials have credit cards and a significant portion of them are managing them responsibly. Almost 30% of those who logged into their Credit Karma accounts in the last year had already moved into the good or excellent score range of 700 or higher. These conscientious millennials are moving on with the business of growing up.
2. The American Dream is still relevant.
As millennials marry (almost half of those surveyed were already married or living with a partner and four out of five who were unmarried hoped to get married one day) and have children (41% already had already started a family and 33% said they planned to do so in the future), they came to realize – like generations before them – that they did want a home. Nearly 88 percent who did not already own a home hoped to purchase one in the future. That is a big market for everything from welcome mats to mortgages.
3. Loyalty is earned.
When it comes to work, I can tell you firsthand that millennials want to be part of a cause they believe in. The fact that everything they do at Credit Karma can positively impact the lives of real people makes it easier for employees of all ages to get up and go to work every day. It motivates them just as it motivated me to put my name and livelihood on the line to start this company nine years ago. We all want to feel that our hard work has meaning. Our mission has allowed us to hire some of the best minds in the business and put them alongside that young energy to develop the next generation of leaders. Our mentorship programs allow us to leverage all of the skills in the building.
Once embedded in a company, our research shows that millennials are fiercely loyal. More than 70% of 29 to 34-year-olds with jobs said that, on average, they had stayed four years or longer at each job, and a quarter said they planned to stay put for eight or more years. But, we also found that millennials are strategic about making sure they get paid fairly. More than half of those surveyed changed jobs for a raise and nearly a quarter changed jobs for a promotion. The desire to try new things only accounted for one-in-four resignations.
I have learned that if you give millennials meaningful work and treat them fairly, they will stick around and grow with the company.
4. Tomorrow will come whether you are ready or not.
Millennials who watched their parents retire – or struggle to retire – are painfully aware of the importance of planning for the future. More than half of those who responded to our survey had already started saving for retirement. An even larger percentage (62%) said they were not confident that Social Security would be there for them when they retire. Those hard lessons are another reason employers may want to think about the role they can play in providing peace of mind for what many consider an uncertain future.
5. Life is lived on the go.
What millennials have changed is how they interact with their money. More and more are turning to their phones rather than going to a bank branch or even a web site on their computer. In January of 2014, the number of Credit Karma members on mobile exceeded the number accessing their financial information on a desktop. Mobile visitsto Credit Karma are now three times higher than desktop. This is a shift that is here to stay. Banks are watching closely and either developing new ways to communicate with people or buying it. That change is an opportunity for those who want to talk to this growing population of mobile-first users.
Methodology: Credit Karma, in partnership with Qualtrics, surveyed 1,016 18-34 year-olds between May 25 and June 3 to ask their opinions on 33 questions. All data was aggregated and anonymized.Tags:Category: Credit Scores