The impact of the Great Recession, combined with insights from their parents, play a significant role in how Millennials manage their own financial lives, according to the Bank of America Year-End Millennial Snapshot.
Outside influences had a direct impact on this generation’s financial behaviors and attitudes, which could dampen their chances for a secure retirement. Almost a third say the Great Recession affected them personally. Nearly half (46%) say the financial crisis made it difficult to find work, and one out of five (21%) report it was impossible. Nearly half said it also changed the way they think about saving, investing and spending (49%), making them more hesitant to invest in the stock market (40%), buy a house (36%) or put money into a retirement savings account (19%).
While only 21% of Millennial small-business owners reported six months ago that their company had completely recovered from the Great Recession, optimism has remained strong throughout the year despite the slow recovery. Data from November proves optimism is not only strong, but showing major growth—with 88% of Millennial entrepreneurs expecting their business to grow over the next five years (compared with just 56% of Baby Boomers who expect the same), and 80% expecting a revenue increase (compared with 60% of Boomers). Confidence in the economy is also up, and 74% think their local economies will improve in the next 12 months.
Their own parents have influenced Millennials’ financial behaviors. Forty percent admit the successes and failures of their parents drove them to make a positive financial decision; in comparison, just 12% of Gen Xers, Boomers and seniors had this experience.
Millennials also say that even if they grew up being financially dependent on their parents, financial advice wasn’t always offered. For example, nearly half (44%) reported their parents didn’t talk to them about the impact paying for college might have on their future finances. Just one-quarter of Millennials’ parents started talking to their children about good financial habits before they turned 10 years old. Almost twice as many Millennials (43%) believe this discussion should take place earlier.
“The events taking place when Millennials were coming of age are visibly impacting their financial decisions and behaviors,” says John Jordan, client experience and programs executive for preferred and small business banking at Bank of America. “This will be especially apparent as they become the money managers for their households.”
The Year-end Millennial Snapshot was created through an analysis of 2015 Bank of America studies, conducted in August and September, focusing solely on data about Millennials.