The Truth About the Financial Habits of Gen Y


Millennials have been called many things — and lots of the labels older generations tried to stick on Gen Y conflict with what we’ve grown up to be. When the Millennial generation was still coming of age and the majority of us were 19 or younger, we were called narcissistic, selfish, and lazy.

Well, yeah. The word older generations should have used at the time to describe us? “Teenagers.”

But Millennials have grown up a bit. Thankfully, we’re less bratty and more thoughtful (for the most part). The majority of our age demographic graduated from college and moved into the workforce. And now, we’re becoming consumer cogs in the economy.

Here’s where new labels start coming in. And as it turns out, Gen Y seems to be far different, financially-speaking, than any of the older “experts” predicted us to be.

Millennials and Money: The Real Deal 

This 2012 piece from The Atlantic frets over the future of our largely mass-consumerism driven economy. Why? Because the buying habits of Millennials have been scaring companies and the marketing gurus behind them.

They just can’t seem to figure out how to deal with Gen Y. Ours is a generation that has more in common with our grandparents, who dealt with the Great Depression. We’re edging away from the financial behaviors of our parents, who put a premium on keeping up with the Joneses and taking on outsized mortgages that 2008 helped prove they could not afford.

As The Atlantic article says, Millennials might be the “cheapest generation.” If my own experiences are any indication at all, I wouldn’t disagree. We’re frugal and uninterested in picking up where our parents left off — as super-consumers of unnecessary stuff that we buy with no other purpose than to impress people we don’t like.

Gen Y is interested in innovative ways to get what we want, and only when we need it. Thus the rise of the sharing economy, where we pay to share resources only when we need them. (Think ridesharing companies like Uber and Lyft as an example, or Airbnb for accommodations.)

This isn’t just some trend. Being money-conscious is a trait of our generation.

How We Got This Way

How did Millennials end up so financially different than our parents? How did the generation once assumed to be abysmal with money management become the group that journalists now beg to spend our carefully saved dollars?


The front-row ticket to the Great Recession that none of us asked for had a strong effect.

We watched as the stock market tanked and our parent’s retirement funds went with it. We watched as the housing market collapsed and people were left with debt that dwarfed the actual value of their home. We struggled to graduate college as tuition costs rose and were greeted on the other side by a job market that was on lockdown.

And we didn’t just sit by and observe. We wanted to know what on Earth just happened. So we started asking questions, and we acted to avoid getting tripped up by the same financial pitfalls that engulfed the Baby Boomers.

Millennials became debt- and risk-averse while becoming big fans of saving (even when we find it hard to do). We focused on what we could experience rather than what we could own. And we developed a deep dislike, even mistrust, of giant consumer industries that still fail to understand why traditional marketing and advertising just doesn’t work on Gen Y.

That distrust bleeds over into the financial services industry, too. Nearly one in four Millennials “trusts no one” for financial advice.

While Millennials understand the importance of saving and living beneath our means, this is where we start getting tripped up on our own set of obstacles and challenges. We learned many lessons from coming of age during the Great Recession, but were we also left too scared to act?

Not only are we less interested in buying stuff, to the dismay of countless consumer companies, but we’re also less interested in doing anything with our money beyond (figuratively) stuffing it into a mattress.

This will be our generation’s challenge: to continue to improve our financial literacy, to seek out trusted professionals who work as fiduciaries when we need help, and to make our money work for us by investing it rather than just saving it.

Ultimately, There’s No Mystery Behind the Financial Behaviors of the Millennial Generation

Millennials are different than our parents, and have more in common with our grandparents — who, like us, experienced and dealt with growing up during and after a huge economic shock. While marketers and consumer-driven companies may struggle to “figure out” Gen Y, there’s really no mystery here.

Students of history will notice that we simply follow a pattern that repeats endlessly throughout the course of human experience. Though we experience time in a linear way, human behavior tends to be cyclical. History doesn’t repeat itself exactly, but things do tend to move in cycles.


Millennials are a cheap, frugal generation and if we can overcome the unique set of challenges that seem to face us now — namely, our fear of the stock market and investing in financial assets beyond liquid savings accounts — we may just become a financially wise and savvy generation too.

But the generations that come after us won’t be shaped by the same experiences that we dealt with as we became adults. It stands to reason that within the next few generations, as the economy recovers and we move back into “booming” and “abundance” mindsets, another group of super consumers will emerge.

Gen Y’s frugality won’t tank the economy. The cycle will undoubtedly continue and those marketers that seemed so flummoxed by Millennials today will get their wave of mass consumerism back one day.

It’s just not going to come from us.

About the author: Kali Hawlk is the founder of Common Sense Millennial, a resource for members of Gen Y who want to do more with their money. She works as a writer and content manager, and is passionate about personal finance and business. You can connect with her on Twitter @KaliHawlk.

  • Show Comments Hide Comments