Many from the Millennial generation have learnt from their parents’ mistakes when it comes to their finances, it has emerged.
New research from our Millennial Me & My Money report, reveals nearly half that (45%) of Millennials (18-34 year olds) manage to save at least a quarter of their disposable income every month – compared to just a third (34%) of their parents’ generation (35-55-year-olds). At the same time, Millennials who believe their parents had a positive influence on their money habits, have almost double the savings of those who say their parents had a negative impact.
Those who have benefitted from their parents’ first-hand financial experiences are far savvier when it comes to managing credit.
It’s an approach that is likely to shape their future finances by helping them get their hands on better borrowing rates and more competitive purchasing power. Our research shows Millennials who have picked up bad money management habits from their parents often resulted in one or all of the following:
• More than twice as likely to have missed an agreed credit repayment (17% vs. 7%).
• More likely to have gone into an unplanned overdraft (33% vs. 19%).
• Twice as likely to have run out of money before payday in the past (44% vs. 21%).
• Twice as likely to have been refused credit (20% vs. 10%).
• More than twice as likely to have defaulted on a credit account (10% vs. 4%).
• Five times more likely to have a County Court Judgment in their name (5% vs. 1%).
It’s striking to see just how much of an impact parental influence can have on the financial wellbeing of Millennials in adulthood.
The research highlights the importance of laying down financial foundations early on by helping our children learn from both our experiences and our mistakes in managing money, as well of enjoying the advantages it might bring them later in life.
But as it stands, it appears that Millennials already surpass older generations when it comes to money management.
Of course, there as ever are still a few lessons to be learnt.
Many are still making crucial errors such as not even regularly keeping an eye on their own credit reports which can have a far-reaching impact on their financial future. There’s also a surprising level of apathy shown towards bargain hunting and shopping around which is more consistent with older generations.
The findings are simply a snapshot of just some of the highlights and insight in our Millennial Me & My Money report. To read it in full, simply click here.