Most Millennial Women Suffer Financial Hardship, Study Shows

Nearly half of millennials are living pay cheque to pay cheque, particularly young women, according to a new survey. 

The study, carried out Georgetown University’s Business for Impact’s AgingWell Hub, revealed that 48% of millennials are struggling to make ends meet; 6% more than the previous 2020 survey. Worryingly, less than one-third (28%) believe that they could handle an unexpected major expense; a 4% drop from 2020. Additionally, less than one-third (30%) reported taking steps to save for retirement despite 43% citing it as a top financial goal in 2020. However, millennials did report making some progress on paying off debt (44%); creating and sticking to a budget (33%); and improving their credit score (43%). 

Millennial women expressed a worse financial position and more negative outlook than their male counterparts. In fact, only 21% of women reported being able to handle an unexpected major expense and 29% reported having money left over at the end of the month; compared to 35% and 42% of men, respectively. In addition, only 27% of women agreed they are securing their financial future, compared to 40% of men. 

FINANCIAL OUTLOOK FOR MARGINALISED GROUPS

Black/African American and Hispanic/Latino millennials are more optimistic about their financial future than other millennials surveyed. Around 52% of Black/African Americans and 47% of Hispanics/Latinos believe they will have a better life than their parents; compared to 39% overall. Additionally, 44% of Black/African Americans and 36% of Hispanics/Latinos report being able to enjoy life because of the way they are managing money, compared to 32% overall. 

The “Gen Z and Millennial Survey: The Pandemic Perfect Storm – One Year Later,” which is a follow-up to the one conducted back in 2020, carried out in partnership with Bank of America, found that 56% will prioritise flexibility, (such as time, working hours, comfort, etc) in their next job. Additionally 63% said that employee benefits (like retirement plans, health care, time off) are more important than ever; consistent with last year’s survey. Furthermore, 51% want their employer to support working from home, even after the pandemic restrictions subside; an 8% decline from last year. 

“More than ever, young adults are prioritising workplace benefits when considering an employer. A more diverse labour market and competition for talent makes it vital for employers to offer strong benefits that cater to the needs of their Gen Z and millennial employees,” stated Kevin Crain, Head of Retirement Research & Insights at Bank of America. “Millennials face particular challenges in managing their personal finances, including paying down debt, creating a budget and saving for retirement, with nearly half saying that they are living from pay cheque to pay cheque. This also shows the need for access to sound financial wellness programmes in the workplace.” 

FINANCIAL LITERACY & ADVICE

The survey also found that millennials prefer to receive financial advice and make financial decisions in a variety of ways; with family continuing to be the top source of advice at 40%. Again, differences exist among demographic cohorts. For example, women are more likely to rely on family members as the preferred sources of financial advice (44%); while Black/African Americans are less likely to do so (34%). In addition, more women prefer to receive financial advice through asynchronous channels such as email (38% of women compared to 24% of men) and mobile apps (32% of women compared to 32% of men); while Black/African Americans report the phone is their preferred channel for financial advice (27% compared to 18% overall). 

“Understanding the financial literacy, attitudes, challenges, goals, and decision-making behaviours of millennials is important to helping them improve their financial wellbeing. Decisions regarding financial matters can lead to a sound short-and long-term financial plan or exacerbate financial challenges and that can lead to significant financial insecurity and stress,” said Jeanne de Cervens, Director of the AgingWell Hub. 

For more information about the report click here.

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