It’s my pleasure to have guest blogger Tansley Stearns, Chief Impact Officer, Filene Research Institute, share her thoughts on Millennials and personal finances in a pair of special blog posts. The first post appeared last week. -Stephen
It’s hard to overlook over 75 million consumers. That’s the size of the Millennial generation, and it’s a critical customer segment for financial institutions, now and in the future. As covered in our previous post, Millennials talk and think about money in very different ways from other generations, and financial institution marketers need to be on the same wavelength if you want to attract their business.
Let’s continue our look at what makes this generation tick when it comes to money matters, and how you can benefit. Although Millennials may have a reputation for leaping before they look, i.e., experiencing life without the financial means to pay for it, this is not a universal attitude.
They are not all pie in the sky, ne’er-do-wells. Millennials do understand that saving money is essential if they are to reach their financial goals. They are thrifty, but struggling. The need to budget and to stop making impulse decisions is top of mind. Where do you think the term ‘staycation’ originated? Born out of the Great Recession, it included many Millennials who decided they couldn’t afford to bust their budget on a getaway vacation, and decided to stay close to home to keep from draining their wallet.
What do these attitudes mean for your financial institution? The simple answer: one size does not fit all for the Millennial market, in a generation that spans the late 1970s through the early 1990s.
While college loan debt may be hanging over their heads for years, they also want to live life now, and not miss out on all that life has to offer. This financial insecurity, countered by a desire to experience and participate, can be addressed by financial institutions in how they communicate with Millennials about new and existing products and services.
Millennials are uncertain about the future. What are their job prospects? How will their careers proceed? Will incomes rise, fall, stagnate? Looking at the future can be overwhelming. Will student debt forestall their financial goals, including their retirement prospects?
Financial institutions can give Millennials peace of mind by showing them a better path to follow to reach their financial goals. By focusing on the moment-by-moment experience, stepping stone by stepping stone, Millennials can work to overcome their financial challenges. A message that focuses on taking things day by day and choice by choice will resonate.
For example, messaging can encourage a stop to impulse purchases and a start to making mindful decisions to achieve financial goals. Focus communications on mindfulness and minimalist goals. In other words, live in the here and now, and emphasize setting fewer and simpler goals.
In other words, support their goals, understand their insecurities, but don’t lecture about their priorities.
Create new products and services and promote existing ones that reduce financial insecurity. Promote non-exploitative financial services by comparing your offerings term by term with those offered by competitors. Communicate your offerings as grounded in the present, focused on what Millennials can do today to successfully ride the wave of uncertainty related to debt, employment and savings.
Millennials were hit hard by the Great Recession at a young age, just as they were entering adulthood and making once-in-a-lifetime transitions from home to college to professional life. That experience molded their attitudes about money and financial conversations. When financial institution marketers offer products and services that relate to Millennials’ push-pull desire to have it all now yet also build a financial future, they can attract and retain a valuable market segment.