If your small business is struggling to win customers from the so-called Millennial Generation, new research from Bank of America might shed light on why it’s so tough. Millennials are protecting their finances, saving for emergencies, and already anticipating that they won’t be able to fund their own retirements.
The bank combed data on more than 3,500 millennials that it gathered in 2015 for 7 different consumer research reports to try to get a grip on how this generation’s relationships to money will impact the economy. Many millennials are now in their late 20s to mid-30s–getting married, having children, and making major purchases like homes and cars. And “millennials’ constant connections to technology and to their parents – and their goals for parenting and settling down – will shape our businesses and communities in the years to come,” the Bank of America White Paper states.
Despite financial burdens and obstacles such as student debt and impacts from the Great Recession, BofA research finds that millennials are eager to pursue financial independence and achieve milestones of adulthood. And yet, as consumers, millennials are conservative.
- Eighty percent recently decided not to make a purchase simply to protect their finances.
- Sixty percent said it’s very challenging for their generation to live within their means and not overspend.
- Almost half report they are spending less money now to ensure a stress-free retirement.
- Those millennials who do have savings are more likely to be saving for emergencies (61 percent) than for retirement (35 percent).
- Fifty-five percent say that being prepared for financial changes is a priority for them right now.
- More millennials prioritize being able to travel often (66 percent) and live near loved ones (54 percent) than more fiscally focused factors like having disposable income (38 percent) in their ideal retirement.
- Fifty-five percent of millennials saving for retirement today are doing so to improve their standard of living down the road, and not just to afford the basics when they reach their golden years.
In fact, BofA research found that Millennials don’t believe they will even be able to afford retirement on their own. More than 40 percent intend to lean on their loved ones for financial help in retirement. (Just 9 percent of members of older generations share this plan.)
Bottom line? If your business’s long-term growth plan is dependent on big spending from the Millennial Generation, it might be time for a new strategy.