Original Release Date November 1, 2024: Our US Fintech and
Payments analyst reviews a recent survey that reveals key trends
on how Gen Z and Millennials handle their personal finances.
----- Transcript -----
Welcome to Thoughts on the Market. I’m James Faucette, Morgan
Stanley’s Head of US Fintech and Payments. Today I’ll dig into
the way young people in the US approach their finances and why it
matters.
It’s Friday, November 1st, at 10am in New York.
You’d think that Millennials – also commonly known as Gen Y – and
Gen Z would come up with new ways to think about
money. After all, they live most of their
lives online, and don’t always rely on their parents for advice –
financial or otherwise. But a survey we conducted suggests the
opposite may be true.
To understand how 16 to 43 year-olds – who make up nearly 40 per
cent of the US population – view money, we ran an AlphaWise
survey of more than 4,000 US consumers.
In general, our work suggests that both Millennials and Gen Z’s
financial goals, banking preferences, and medium-term aspirations
are not much different from the priorities of previous
generations. Young consumers still believe family is the most
important aspect in life, similar to what we found in our 2018
survey. They have a positive outlook on home ownership, college
education, employment, and their personal financial situation.
28-to-43-year-olds have the second highest average annual income
among all age cohorts, earning more than $100,000. They spend an
average of $86,000 per year, of which more than a third goes
toward housing.
Gen Y and Z largely expect to live in owned homes at a greater
rate in five to 10 years, and younger Gen Y cohorts' highest
priority is starting a family and raising children in the medium
term. This should be a tailwind for many consumer-facing real
estate property sectors including retail, residential, lodging
and self-storage. However, Gen Y and Z are less mobile today than
they were pre-pandemic. Compared to their peers in 2018, they
intend to keep living in the same area they're currently living
in for the next five to 10 years.
Gen Y and Z consumers reported higher propensity for saving each
month relative to older generations, which could be a potential
tailwind for discretionary spending. And travel remains a top
priority across age cohorts, which sets the stage for ongoing
travel strength and favorable cross-border trends for the major
credit card providers.
In addition to all these findings, our analysis suggests several
surprising facts. For example, our survey results contradict the
widely accepted notion that younger generations are "credit
averse." The vast majority of Gen Z consumers have one or more
traditional credit cards – at a similar rate to Gen X and
Millennials. Although traditional credit card usage is higher
among Millennials and Gen Z than it was in 2018, data suggests
this is driven by convenience, not financing needs. Younger
people’s borrowing is primarily related to auto and home loans
from traditional lenders rather than fintechs.
Another unexpected finding is that while Gen Y and Z are more
drawn to online banking than their predecessors, about 75 per
cent acknowledge the importance of physical branch locations –
and still prefer to bank with their traditional national,
regional, and community banks over online-only providers. What’s
more, they also believe physical bank branches will be important
long-term.
Overall, our analysis suggests that generations tend to maintain
their key priorities as they age. Whether this pattern holds in
the future is something we will continue to watch.
Thanks for listening. If you enjoy the show, please leave us a
review wherever you listen and share Thoughts on the Market with
a friend or colleague today.
Kommentare (0)
Melde dich an, um einen Kommentar zu schreiben.