Gen Y gets a bad reputation for being too hedonistic and not planning for what or where they will be doing tomorrow. But, according to the Connecting with Millennials study, which was commissioned by Visa this is all hearsay. Here are five truths about Gen Y.
A survey commissioned by Visa called ‚”Connecting with the Millennials‚” in South Africa, Asia Pacific, UAE, and Russia, Gen Yers – or young adults 18-28 years of age, are turning these stereotypes on their heads. Here are five surprising truths about millennials that are guaranteed to make you tweet in an instant.
1. Gen Y Dollar Clout on the Rise
They may already have some serious Klout scores in the digital world, but Gen Y’s purchasing power is poised to wield some serious monetary clout as well. With 20 percent of higher income millennials in urban areas worth a total annual disposable income of US$907 billion, we’re talking about purchasing power equivalent to the 16th largest economy in the world. That’s more than just petty change! Nearly 30 percent of this wealth (US$ 270.7 million) resides in China, followed by Japan (US$ 174.3 million) and India (US$139 million). So it’s no surprise that many business plans these days are being written with this demographic as a prime audience.
2. Family comes First
Contrary to the wide-spread belief that Gen Y are caught up in their own lives and interests, the youth of today are extremely family-centric. Holding family values in high regard is a trait especially widespread among South African, Indian and UAE millennials. Social networking sites and access to fast information hasn’t made them forget about what really matters to them, they just like to share it on Facebook a bit more!
According to the Visa Millennials study, 78 percent of Gen Y will take their family into consideration for all major decisions. With 78 percent of these young ones determined to provide for the elders in the family, the future seems shiny. And for all those sceptics out there, here’s another news flash- over 70 percent of working young adults are already contributing an average of 14 percent of monthly income to their parents. This generation puts its money where its mouth is.
3. Sensible Savers
So, are Gen Yers are more sensible than their grandparents? Quite possibly. Living in the moment clearly does not mean living beyond one’s means for this young generation. While 73 percent of young adults view money as the ticket to enjoy life, 83 percent of millennials save every month. When it comes to managing their expenses, Gen Y is putting aside up to 32 percent of their monthly income, while 58 percent are living loan free. Amongst those that are living in Africa, Asia Pacific, Central Europe and Middle East, on average that adds up to US$363 per month. In one year that adds to US $4,351. Not bad considering it’s the equivalent of a third of their income.
4. Cash is so yesterday
When we asked Gen Y to envision the future, almost three quarters of them believed that electronic payments will displace cash and we will become a cashless society. Right now 41 percent already prefer to spend with their cards compared to only 20 percent favouring cash. South Africans, along with Koreans, are the top cards over cash adopters in the world with 61 percent of Millennials in both countries preferring to use their cards instead of cash.
They prefer cards because they don’t want to carry cash and it’s convenient for everyday purchases. It also gives them access to online shopping so they can visit their favorite blog shops or the latest fashion trends before they even arrive in-store.
Clearly this is a new generation of smart money managers with 80 percent already possessing a debit card. Electronic payments, and in particular debit, allow them to stay in control of their money but have access to their accounts at any time. Debit is a more convenient payment option as it allows them to make transactions on multiple platforms and provides the freedom to make day-to-day purchases with ease and convenience, without the hassle and worries of carrying cash.
5. Multitasking beyond 24 hours a day
This is not science fiction. Gen Yers literally eke out ‚”longer‚” days than previous generations with their multi-tasking abilities. On average, these young adults spend 4.9 hours a day multi-tasking during the weekdays and as many as 7 hours on the weekend. Multi-tasking makes their weekdays 28.9 hours long while 31 hours are clocked on the weekend. As bizarre as that sounds, this is the new reality.
What that means is that they are able to chat with friends and family on social networks, make online payments and do their homework all at the same time. Almost a third of these digital natives access social networking sites over five times a day.
So in a nutshell, these multi-tasking, financially savvy, morally responsible young adults no longer seem to be fitting into the irresponsible stereotype and is in fact putting some of the previous generations to shame! They want convenience, they want to live in the moment and they want to be able to enjoy their money – but not at the expense of their financial security. They deserve more credit as smart money managers. They like the convenience they get with their debit card, but it also helps them stay financially on track spending within their means with money they already have in their account.
While their parents still rival them when it comes to purchasing power, as more of them complete their studies and move-up the corporate ladder, they will be the demographic to watch. They want to explore the world and not be weighed down by cash. Choices are important and they like the freedom to pull out bills from their wallet or flash their card for unexpected purchases. They’re working, tweeting and ready for the next adventure!