Millennials’ comfort level with technology touches every aspect of their lives, including their finances. These young adults are extremely adept at using apps to connect with each other and exchange goods and services, which is a great way to save money. Millennials are using technology to buy less, spend less, make money, and save for the future.
They Embrace The Sharing Economy
When this generation wants to travel, they rent rooms from each other on Airbnb instead of paying for hotels. When they need a ride, they turn to their Uber or Lyft app instead of calling a taxi. They also use apps to find rideshares for long drives, tour guides for travel, and to swap used furnishings and appliances. Not only are they saving money by avoiding corporate overhead, they are also picking up extra cash when they need it by stepping into the selling side of the equation. That’s a win-win for this generation.
They Share Expenses, Too
Studies show that millennials are inclined to treat themselves to indulgences like nice meals or bottles of wine, even though they’re often living on tight budgets. The way that they achieve this is by having roommates or at least sharing their basic living expenses as much as possible. They sign up with friends for group deals like family phone plans from T-Mobile. Another hack they often use is splitting the cost of streaming services for music, movies, and TV shows and share their accounts with friends.
They Bank More Efficiently
Many young adults almost never see the inside of a bank branch. They open their accounts online and bank using a mobile app. Their paychecks are direct deposited, their bills are on auto-pay, and if they need to deposit a check, they just photograph it with their phone. Instead of balancing a checkbook monthly, they track their balance in the app, which is always up to date. All this automation, when done properly, means late fees and overdrafts are virtually impossible.
They Have FinTech Apps
Financial technology (FinTech) apps like Mint and Checkbook create detailed budgets, track goal progress, and recalculate to your net worth daily. That means millennials have an unprecedented amount of data at their fingertips that helps them make good decisions. Even wealthy individuals who employed personal accountants never had so many colorful charts and graphs communicating the impact of every decision they made on a daily basis.
They Buy Less Stuff
Millennials are less inclined to buy durable goods like printers, lawn care equipment, or even cars than earlier generations. Instead, they use online printing services, hire people to help around the house via apps like TaskRabbit, and get around town using Uber and Lyft. In general, their generation values experiences over things and tends to spend money on consumables like food, beverages, travel, and event tickets. They also place a lot of emphasis on green living, so they prefer not to create demand for production. Their buying habits are so radically different from previous generations that whole industries are expected to feel the impact soon.
They Invest Differently
What about saving for retirement? It turns out there’s an app for that. Baby boomers paid a stockbroker to manage their investments for them, while Gen-X and Y learned to make their own investment decisions and used discount brokers online. But millennials are trusting automated investment apps called “Robo-Advisors” to balance their portfolios and direct their investment decisions. These apps, with names like Betterment and Personal Capital, help users create customized portfolios and provide wealth-management services that used to be available only to customers with large accounts.
Millennials are operating in a completely different financial reality than previous generations. The sharing economy lets them hire each other for simple services instead of paying corporate pricing and also lets them pick up extra cash when they need it by renting out a room, selling used goods, or driving others around on weekends. Their comfort level with mobile apps gives them unprecedented access to financial information, and puts unparalleled support, advice, and investing power in their pockets.