Oh, Millennial, also known as Generation Y, you have been put under a microscope for your entire life!
As a result, you have been loved, spoiled, hated, made fun of, poked and prodded, researched, dissected, erased, and rewritten. In fact, a simple Google search about you yielded 3,830,000 results. Why? Well, because you are young, and everything about you is fascinating.
According to Forbes, younger Millennials, or those born between 1990 and 1996, are less likely to identify with being Caucasian or white, and more likely to fear the economy, believe their jobs are temporary, and don’t believe in organized religion. And 24 to 13 percent also identify with being either gay or lesbian, bisexual or transgender, according to Forbes. On the other hand, 35 to 27 percent of older Millennials, or those born between 1979 and 1989, are more likely to be tied down with children and frequent Wal-Mart. And those are just some basic realities.
But one of the most interesting facts about your generation, according to The Atlantic, is that you are “cheap.” The following are the top three reasons why Millennials have become known as the “Penny-Pinching" generation.
See also: How to Talk to Millennials About Money
1. Why Buy?
That’s it, in a nutshell, a retailer’s longstanding slogan: “Why buy when you can rent?” And most Millennials are taking notice. According to the U.S. Census Bureau’s Housing Vacancy Survey, Gen Yers’ homeownership rate has dropped to the lowest level in “recently recorded” history, reports U.S. News and World Report. The survey found that homeownership for Americans 35 and under declined to 36.2 percent during the first quarter of 2014, a decrease from 36.8 percent in 2013.
“What’s fascinating is they have come of age during two huge bubbles,” CBS News senior business analyst Jill Schlesinger said on CBS This Morning: Saturday. “You had the tech boom and bust; and the recent housing boom and the financial crisis.”
So, Millennials most closely resemble the attitudes of “children during the Depression Era,” Schlesinger added. And that’s why they are a bit anxious about being locked down in a mortgage.
2. Sharing Isn’t Caring
With the rise of 80 million Millennials born after 1980 and before the early 2000s, so has the sharing economy which, in turn, has impacted auto sales.
“Companies are taking advantage of that,” said Schlesinger. “Look at places like Uber. I don’t need to buy a car. I can get an Uber or a ZipCar.”
According to The Atlantic, Gen Yers between the ages of 21 and 34 only bought a little over 25 percent of all new vehicles sold in the U.S. in 2010, a decrease from the peak of 38 percent in 1985. And that’s why automakers are getting more creative. For example, General Motors hired the youth brand consultants at MTV Scratch—a corporate cousin of the TV network responsible for Jersey Shore—in order to establish a connection with Millennials.
“I don’t believe that young buyers don’t care about owning a car,” John McFarland, GM’s 31-year-old manager of global strategic marketing, told The Atlantic. “We just think nobody truly understands them yet.”
3. Not Betting on the Horses
MarketWatch reporter, Jill Berman said that “The kids are scared of the stock market.”
She cited a recent survey by Bankrate, a personal finance site, that found only 26 percent of people under 30 are investing in stocks, compared with 58 percent of people between the ages of 50 and 64. So, why are Millennials afraid to invest? Well, it’s because they often lack the money and knowledge.
“It’s indicative of the financial education issue we have in the United States,” Claes Bell, a banking analyst at Bankrate, told MarketWatch. “People aren’t coming into their careers and in their earning years with the practical knowledge to invest.”
Only 17 states in the U.S. offer financial literacy education in high school, according to MarketWatch.
But, despite all of the stereotypes and statistics about you, your parents will be happy to know that you are saving money. According to CBS News, on average, Millennials ages 21 to 36, have 52 percent of their savings in cash. The question is: do you keep it under your mattress? Now that would be more intriguing.