The millennial generation has lived through the ups and downs of the economy, pushing them to become more financially conservative.
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Conservative probably isn’t the word you would normally associate with the millennial generation. But research from UBS has suggested that millennials have become the most financially conservative generation since the Great Depression, and it doesn’t go without reason.

The 2008 fiscal crisis

Millennials have had firsthand experience with the fiscal crisis in 2008; they have experienced the ups and downs of the market themselves, or they have watched in the background as their parents experienced the rollercoaster economy. Growing up through the fiscal crisis really shaped the minds of the millennial generation and how they spend their money. Similarly, the current changes in the economy has made them become even more cautious.

Losing trust

Because the millennial generation grew up during the fiscal crisis of 2008, they have lost a lot of trust in the financial advice given to them by financial professionals or even their parents. This has pushed many millennials to follow their gut on financial decisions, and even go along with the crowd. Also, despite being experts with online and mobile banking, millennials have become more interested in having a personal connection with whomever manages their money.

While millennials tend to follow their peers for financial advice, it hasn’t taken away their fear of unemployment and the reality that they have a lot to pay back in student debt.

Student debt and unemployment fear

The reality of their financial situations along with their fear of unemployment has pushed millennials to become intensely conservative when it comes to investing. The millennial generation has excelled at saving, but they are incredibly hesitant to make risks with their investments or even invest anything in the first place.

Many millennials tend to put their money into a bank savings account rather than investing in the stock market. On the rare occasion they decide to invest in the stock market, millennials tend to gravitate toward the less-risky investments. While savings accounts are low-risk, they don’t have anywhere near as high a return as investments could potentially have.  

Growing up through a fiscal crisis as well as living thousands of dollars in debt is a good reason to be nervous about investing your money. But while it’s important to be smart with your money, it’s also good to take some risks sometimes.

The downside to not taking risks

While playing it safe is not a bad thing, millennials aren’t taking advantage of the many opportunities for their money to grow. Saving cash in lower-risk accounts rather than taking a chance on a high-risk investment could potentially create trouble for the millennial generation and their long-term financial security; millennials may not have enough saved in their retirement accounts to retire comfortably or even to retire on time.


While the millennial generation is rightfully nervous about their finances and investing, it’s important that they try to take some risk and invest a little bit of money. If they continue to avoid investing, they will miss out on the opportunity for their money to grow faster than it would if they were just saving it in a traditional savings account.

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Header image: Getty Images


Posted 04.20.2017 - 02:43 pm EDT