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Saving, spending and investing
From a Millennial perspective
“There are two kinds of spurs, my friend. Those that come in by the door; those that come in by the window.” – Tuco the Ugly
"The good, the bad and the ugly"
Saving, spending and investing. The inevitable things we have to consider when making financial decisions. As we look into the past, we can see how people react to these three different aspects of financial decisions. To summarize, here is the holy trinity of money usage simplified:
- Save money – It will probably be more useful in the future.
- Spend money – Temptation wins patience
- Invest money – Maybe I can double my savings in 20 years aka I’d rather have the most awesome retirement
Times have changed and likewise the financial decision-making of the new generation bankers, aka. Millennials. In order to understand how customer behaviour is changing, we have to look into the minds of Millennial bankers and see how they see “the good, the bad and the ugly”.
Money looks better in the bank than on your feet
Millennials are very interested in saving. Still, they are 1 trillion US dollars in debt according to the Federal Reserve Bank of New York (2019). This debt consists mostly of student loans and mortgages. Even though this might at first glance seem like a catastrophic situation, Millennials are actually more risk-averse than previous generations. Millennials are more cautious about the future, therefore living with your parents longer, marrying at a later age or delaying starting a family are quite usual decisions among millennials.