SYDNEY, Australia – A new study shows that millennials are better at handling personal finances and handling their savings accounts compared to their older counterparts.
Based on the research conducted by Klarna, a Stockholm-based company that provides online financial services and payment solutions, millennials are far better and more responsible with handling personal finances compared to the older generation. The study surveyed over 20,000 people from 10 different countries.
The findings of the research show that Australian millennials are way above and beyond compared to their counterparts from other parts of the world. Aussie millennials claim the number one spot when it comes to personal finance is putting aside enough funds into their savings accounts.
Around 50% of Aussie millennials included in the survey stated that they have money they regularly set aside for a rainy-day fund. Meanwhile, according to the same study, there are only less than half at 47% of older Australians at the age of 55-years-old and above who sets aside money for the same purpose.
Furthermore, the study also found out that the highest number of Australians who set aside some money into an emergency fund is in New South Wales, which accounted for around 55% of the total number of savers in the area. The savers in Queensland and Victoria followed at 47%. Meanwhile, those in South Wales recorded 45% and 42% for those in West Australia.
The way millennials look towards their finances and experience money management is changing at a faster pace. Responsibility towards managing their finances has rapidly become a significant priority for a lot in the younger generation, according to the new research. Based on the results, 42% or two in every five Australian millennials consider themselves more responsible when it comes to money than the credit that most people give them.
Viveka Soderback, the consumer behavior professional at Klarna, commented and explained the results of the research. According to Ms. Soderback, millennials in the country, in particular, have become more conscious and mindful of managing their money than what the popular culture makes most people believe.
She stated that pop culture is one of the primary drivers that caused most people to believe that millennials are being irresponsible, especially about their finances. Most say they are overly fond of making unnecessary spending and purchases, wasting their money on avocado toast. Many also believe the younger generation to be unable to prioritize when it comes to their spending habits, said Ms. Soderback.
However, based on the results from the recent study conducted by Klarna, it shows the opposite of what the world believes about millennials financially. The new research shows that a lot of millennials, around 58% of those part of the survey, are setting aside money for their savings accounts for long-term goals. That includes saving to provide for their families or for buying a house.
Also, based on the findings of the survey, there are around 65% of millennials who sais that they are financially responsible. However, despite that promising figure, about 46% of them believe that they are currently financially stable. The number is slightly lower compared to 50% of the global average of millennials who feel they possess financial stability.
However, Fran Ereira, the general manager of Klarna for Australia and New Zealand, said that most Aussie millennials are gaining more optimism towards their financial ability compared to their counterparts from other parts of the world.
Ms. Ereira said that, generally, millennials are highly optimistic when it comes to their ability to manage their finances properly. She said that around two-thirds of Australians from the younger generation already have plans in place about saving funds for their future, which accounts for a much higher rate compared to the global average.
She also stated that based on the findings from the research conducted by their team at Klarna, the ways of Australian millennials when it comes to managing their finances is very different compared to the older generation. Ms. Ereira pointed out that younger Australians are conscientious and conscious when it comes to the goings of their money. A lot of them are turning and taking advantage of new technologies as well as other millennials to stay on track when it comes to their finances, she added.
According to the study, millennials are leveraging on the advantages of new technology when it comes to managing their finances. The study showed 86% of the younger generation in the country said that the above statement is the case for them, while around 57% of them said that they are using technology to help track with all the spendings and purchases they are making.
There are also more than half of Australian millennials who said that technology provides them with knowledge and access when it comes to getting a much better look at their finances and their standing financially.
Meanwhile, the rapidly increasing popularity of Buy-Now-Pay-Later services like Klarna offers was also evident in the survey. Around 30% of millennials stated that they favor using BNPL services compared to other payment options.
Based on the same research, the younger generation is becoming less dependent on traditional banks compared to older Australians. The study shows less than half at 47% of millennials who are bank customers.
The survey also shows that millennials are less likely going to be a customer of a traditional bank, accounting for 17% in the study. Meanwhile, 25% of them said that they are more likely to go towards a BNPL platform for their purchases.
Further, the study found that among the main drivers for the younger generation when it comes to selecting where to put their funds is good branding. Around 21% of them said they are likely to put trust in a platform if their brand is relevant to the challenges that the younger generation is facing.
Millennials also said they put a high value on the terms and conditions from providers. Around 27% of them said they are likely to place the trust of personal finances towards providers who offer transparent terms and conditions.