Millennials mind their money

Don’t count out younger generations when it comes to saving

By: Tiffany Esshaki | Birmingham - Bloomfield Eagle | Published April 19, 2017


METRO DETROIT — If you’re over the age of 40, you’ve probably heard some nasty stereotypes about millennials. The cohort born between 1980 and 2000 is often pegged as being lazy, narcissistic and entitled.

But there’s a good chance they’re also better at handling money than you.

That’s according to several financial experts who say that growing up during the Great Recession, which yielded a weak job market and a high-debt culture, has actually served millennials well when it comes to learning good spending and saving habits.

“Many millennials definitely have traits and experiences that could serve them well when it comes to planning their finances,” Dennis Notchick, an investment adviser with Safeguard Advisory Group, said in a prepared statement.

Traci Harris, branch manager at Lake Michigan Credit Union in Troy, said she’s noticed firsthand that young generations of customers seem to be more careful and concerned about making early financial decisions.

“Despite what many people believe, they actually do have a pretty good handle on their credit score. They know what it means to have credit and how important credit is, and because of that they’re able to make better decisions,” Harris said.

Millennials are less likely, Harris said, to sign up for the first credit offer presented to them. Instead, she’s seen plenty of young people come into the bank to ask questions about which credit options are best for them and their goals.

“I’ve seen a lot of millennials who have great saving habits, and they’re making better decisions about how to get credit and how to use it,” she explained. “Some might start by becoming an authorized user on a credit card, or getting a parent to co-sign on their own credit card, and then they know to pay their bills on time. That’s really the key.”

Harris attributes the new wave of financial savviness to the Age of Information, where the internet makes tracking down information about money easy to find and understand.

“I’ve been honestly surprised at the number of people who come in, and they ask really good questions because they really want to know how credit works for when they’re ready to finance a larger purchase, like a home.”

Don’t let that savvy fool you — good spending and saving habits don’t necessarily mean millennials have money in their pockets. A struggling job market means young people are leaving high school and college and entering into entry-level careers that pay less than in previous generations.

But they know how to use what they’ve got, according to 23-year-old Taylor Harrell.

“My mother always told me it was important to save money. Do I follow all of her principles? No. Should I? Yes,” said Harrell, of Detroit.

A millennial herself working as an optician assistant, she knows money is hard to come by these days. But working several jobs is common with young people her age, and she doesn’t mind putting in a few extra hours to make ends meet.

Harrell might not be great at saving, but she certainly knows how to stick to a set budget and make sacrifices to stay on track.

“If I go over the amount I set to spend on food — which is something I really enjoy, is food — then I know that maybe I can’t go to the movies or make a quick trip to Chicago,” she said. 

Budgeting is a skill that millennials across the country seem to have mastered, according to a Deloitte study. Their ability to rein in spending and utilize the newest technology, like online banking apps, helps them monitor their finances. Combine that with their promising outlook to earn — since the group is expected to enter its prime earning years soon — and you’ve got the makings of a rosy financial future.

“Because of the size of their generation, millennials are going to have a major impact on the economy and on investing in the coming years,” Notchick said in his statement. “Don’t sell them short, because many of them are very much up to the challenge.”