TomorrowMakers

The digital and telecom sector boomed sharply during the lifetime of women born between the early 80s and late 90s. They are the first generation who have been brought up amidst a fast-changing society, while their predecessors had the opportunity to grasp the gradual evolution in communication and technology. In terms of education, they are generally more qualified than their previous generations. As a result, they are more likely to be employed and become financially well off. Not surprisingly, millennial households are the highest earners among all the generations in the last 50 years, as found out in a Pew Research Center study. However, in another survey done in the US by TD Ameritrade, it was revealed that a male millennial is aspiring for almost double of what is the female millennia’s aspirational pay package.

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In spite of their educational and professional supremacy, millennial women fare poorly compared to their male counterparts when it comes to financial aspirations. This trickles down to their finance too. Let's run you down through some financial subject matters that millennial women find extra complicated and why. 

1. Student debt: With their quality educational degrees comes the burden of student debt taken to cover the study costs. The burden is substantial due to the increasing cost of education. With a debt burden so early on in their professional career, it is not surprising that their financial planning gets derailed even before it is initiated.

2. Higher living costs: Millennial women are willing to pay a high price to maintain a good quality of life. They would have plenty of money left for themselves if they stopped eating out, indulging in excessive shopping and lifestyle products and spending a bomb on entertainment sources like multiplexes and Netflix.

3. Stagnating earnings: Millennial women are seen to have set the bar low when it comes to salary expectations (mentioned above in reference to the TD Ameritrade survey). This can result in a lack of drive or push towards getting due hikes regularly. This, combined with a dwindling economy, has been stagnating earnings in general – something that is bound to complicate the personal finances of millennial women worldwide. 

4. Family commitments: Pew Research Center also noted that American millennial women are marrying late and even conceiving late compared to earlier generations. This holds true in India too. However, the same cannot be said about family commitments. Millennial women have shown strong bonding and commitment towards the family. However, helping out before you are self-dependent can jeopardise your finances. It is important to help others only once you are capable of doing so. 

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5. Financial immaturity: Financial immaturity is not only specific to the millennial generation. Millennial early jobbers are likely to be prone to financial mistakes early on in their career. Tax mistakes, inadequate retirement plans, incorrect risk profiling of one’s investment portfolio etc. can complicate the finances of the millennial women. 

6. Living in the moment: While it leaves you high on your happiness quotient, living in the moment can make you miss out on the bigger financial picture. While millennial women are often busy collecting experiences rather than managing investments, realities of life (read mortgages, taxes, medical emergencies etc.) are bound to catch up on them. 

7. Lack of consistency: While earlier generations have settled into a rhythm and built a consistent financial system, millennial women leave it late when it comes to settling down. Decisions like relocation and switching financial plans are no longer unusual. However, it punctuates their life with sudden and frequent changes, which in turn affects their savings and investments.

8. Little faith in savings and budgets: General opinion among millennial is that using a financial budget feels restrictive. They are not open to the idea of putting a cap on their expenses. Budget can be used to make sure that we spend our money on our priorities, and it is not just a tool to restrict expenses. The propensity to save has also been decreasing due to a change in spending habits and lifestyle priorities.

Last words

All these factors combine to complicate the financial situation of millennial women on the personal front. It must be agreed that they are prioritising aspects whose importance cannot be denied. Millennial women are exploring new destinations with their money, experimenting with new skills and trade, taking professional risks and enjoying the feel good that comes with living in the moment. So adding a dash of financial astuteness can make them the “almost perfect” generation in modern history. Don't miss these financial tips that will help young women earners plan their finances in a better and a smarter way.