This is the season of taxes, of NCAA basketball championship office pools and of surveys showing how clueless Americans are about managing their finances.
April is National Financial Literacy month—the U.S. Senate made it official in 2004—and how millennials spend their money is the hot topic in the financial services world. They are, after all, the next gigantic wave of customers. Two surveys released today show that young people often turn to friends and family for money advice, rather than financial advisers. That’s a habit financial firms need to change if they want to survive.
Americans between 18 and 34 are a mix of pragmatism and optimism, according to a survey of about 5,500 American adults done by Harris Poll for Northwestern Mutual. (The 158-year-old company just acquired LearnVest, an online financial adviser founded in 2009 that’s geared to millennials.) While younger workers figure they’ll lack the corporate pensions and social safety nets their parents may have, the survey shows they’re confident in their ability to improve their financial future. More than 70 percent feel secure or very secure that they’ll meet their financial goals.
Being optimistic doesn’t mean expecting everything to be great. Seeing their parents lose money right around retirement age made many millennials risk-averse, says Chantel Bonneau, a 26-year-old Northwestern Mutual adviser. “While a lot of baby boomers plan for a best-case situation, millennials tend to plan for a worst-case situation,” she says.
More than half of younger workers surveyed said they have financial goals, compared with 38 percent of those over the age of 35. Those goals may not be backed up by concrete plans for achieving them, though. In the “Millennial Money Mindset Report,” a 500-person survey by online adviser iQuantifi, an even higher percentage of millennials—72 percent—said they have financial goals. At the same time, only 20 percent said they had a comprehensive plan in place to achieve those goals. Twelve percent said they “have no idea where to start and how to get my finances in order.”