Millennials, many of whom are active on Facebook, are smarter about money that many people from older generations probably give them credit for.
Facebook itself studied its Millennial audience through survey data and conversation analysis, and the social media giant found a generation that is well aware of the financial pitfalls to avoid, having learned from the mistakes of their parents in some cases, and having matured in the aftermath of the financial crisis in other cases. Facebook focused on working-age Millennials (ages 21–34) in the U.S.
Facebook found that 57 percent of Millennials prefer to pay primarily with cash (vs credit). And even affluent Millennials are 2.2 times more likely than affluent Gen Xers or Baby Boomers to pay primarily with cash.
“Regardless of whether they currently own a credit card, 25 percent of Millennials describe credit cards as something that worsens their financial standing,” Facebook said. “And they are 1.3X more likely than Gen Xers/Boomers to feel this way.”
Additionally, 30 percent of Millennials say that they are not sure how credit cards could be helpful.
Indeed, Millennials seem to have adopted a different view of financial success, according to Facebook. Some 46 percent believe that financial success means being debt free. Meanwhile, owning a home was considered a top priority by only 21 percent of millennials, while only 13 percent cite being able to retire are their main financial priority.
A Savings Mindset
Millennials overwhelmingly value saving, with 86 percent saying it’s important to them, Facebook said.
“And 86% say they actually are saving too—whether it’s to be responsible, start an emergency fund, buy a home or retire,” Facebook states. “Conversation analysis indicates that many may just be starting to save—but the saver’s mindset is already firmly entrenched.
And Millennial saving is driven much more by values than by specific objectives.
A majority, 54 percent, say that they save simply because they want to be responsible. Millennials are 2.7 times more likely to give that reason than the second most common reason: saving for an emergency (20 percent).
“Only 17% say the main reason they are saving is to buy a home—and retirement feels very distant at this point, with only 8% citing it as the primary reason they are saving,” Facebook says.
Read the full report here.