Depression-Era Millennials? How Crisis Shaped Their Financial View

The millennials have a lot more in common with their grandparents that most people think – particularly when it comes to their financial behaviors.

Both the millennials and the silent generation saw their financial behavior shaped by two major events – war and economic upheaval – which led them to be conservative in their approaches to money.

That’s the word from James Scanlon, LIMRA senior research director, who is one of the presenters of “Marketing to Younger Generations” at the LIMRA Life Insurance Conference. Scanlon is joined by Emily Holbrook, director of personal markets at Northwestern Mutual.

“When we think about generations, we think about the events that tie them together. For these younger generations – the millennials – a lot of those things are not the same as what the baby boomers experienced,” Scanlon said.  “Technology is one thing. But one of the other things is war. The millennials were marked by Sept. 11 and the Middle East war. The millennials also saw how their families were hit by the recession of 2001 and the financial crisis of 2007-2009.”

These experiences were similar to those that affected the silent generation, whose lives were affected by the Great Depression and World War II, Scanlon said. As a result, the grandparents of today’s millennials adopted conservative financial behaviors that included saving money and owning life insurance.

“I think that is something we will see with the millennial generation as well,” he said.

The millennials are an important demographic group to life insurers because of its size, Scanlon said. By 2020, millennials will number about 87 million people who will be in their prime family formation and earning years.

The newest generation, dubbed Generation Z, is just about to emerge into their early working years, and they are a generation to watch, Scanlon said.

Although they are very young, members of Gen Z already have their own ideas about what their financial futures will look like, according to research.

“They are already formulating their financial goals around financial independence,” Scanlon said. “There is higher desire among members of Gen Z to start their own businesses. This makes sense with the advent of the gig economy, many traditional jobs won’t be in place by the time Gen Z moves into their working life.”

Researchers also looked at how Gen Z prefers to receive information on insurance and other financial matters.

“It may surprise you to find out that in regard to financial information, sitting in a classroom with a teacher is still the most popular learning method for members of this generation,” Scanlon said.

And the top financial concern of Generation Z? No surprise there – this generation is most worried about student debt, he added.

Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at Susan.Rupe@innfeedback.com. Follow her on Twitter @INNsusan.

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