I’ve spent over 200 hours talking to millennials about money

Turns out my generation isn’t great with our finances.

It wasn’t until I was 22 that I started to plan my spending. Over the last couple of months at Spaceship, I’ve spoken to hundreds of millennials about their relationship with money.

Alarmingly, I’ve begun to realize that I fair significantly above average in terms of long-term thinking and have uncovered some valuable insights along the way.

Looking past personal finances, millennials are accused of delaying adulthood across the board.

Millennials can earn a higher salary, find a better cultural fit, and further their career as they switch careers more frequently — however this can become a barrier to mastering defensible skills. These are the type of skills we acquire through years of deep work on a subject.

Deep work refers to the deliberate and focused mastery of complex skills and knowledge that differentiate you from the rest of the noise.

Complex skills prove invaluable when taking the next steps towards your goals. Lacking complex skills makes it much harder to build a solid career in a saturated job market, especially when you’re jumping across multiple career ladders.

In November 2016, I joined the Spaceship team to tackle a near impossible task — getting millennials excited about Superannuation and their personal finance goals. What followed was plenty of deep work, a steep learning curve, and countless hours diving deep on the spending and saving habits of the millennial demographic in Australia.

We’ve had an overwhelming response during our beta launch and I’ve found myself completely reassessing all of my assumptions about my generation and our relationship with money.

The Big Takeaway

It’s not necessarily that young Australians don’t want to become financially savvy, but often that we lack the financial literacy and/or discipline to get there.

I know what you’re thinking — another millennials vs. baby-boomers article.

But this isn’t the AFR or The Australian, and I want to have a different conversation — a real one. I hate this intergenerational inequality garbage as much you do, but reality is that it’s much harder for our generation to build wealth and get ahead.

Simply put, we live in a different world to our parents. We’re deferring the milestones laid out by the baby-boomers in both our careers and lives — owning a home, marriage, parenthood. This really hits home when I speak to dozens of millennials everyday who lack the motivation and financial literacy they need to achieve these goals. A social and societal paradigm shift is underway and financial industries are having a hard time connecting with young Australians.

Becoming financially savvy is more important today than it has ever been if you want to get ahead.

So, what have I taken from ~6 months chatting to millennials and our relationship with money?

1. We want to become financially savvy — and should be credited for taking steps in the right direction when we don’t learn the basics at school. Some of the 20-something professionals I speak to are so disillusioned about their personal finances and lack of financial literacy, that they become defensive towards the subject, often embarrassed or even aggressive.
2. We prefer instant gratification and real-time convenience — this is not to be confused with laziness. Millennials need to access financial services and information on a real-time basis. We’d cartwheel under a bus to avoid paper forms and bricks-and-mortar branches. Not because we’re lazy, but because the technology is already here to do away with archaic processes that waste our time. We want our entire banking experience to happen at a few taps on our phones. If (and only if) we need face-to-face help, we’ll ask for it.
3. Simplicity is the key — one of the most disillusioning things about financial services and banking is the overwhelming complexity that comes with traditional offerings. Millennials want financial services to be straight-forward and easy-to-understand. If we want to dive deep on the finer details and the jargon, we will. Complexity and confusion leads to mistrust. As one millennial described it to me — “most of the time, I don’t get it but I know that underneath all the numbers, I’m probably getting screwed over.”
4. We’re ready for a change in financial services — so underwhelmed by the current offerings, we’re welcoming a new breed of financial services built on the passion and ingenuity of Silicon Valley. If there is a faster, simpler, more efficient alternative, we’re ready to be Australia’s early adopters.
5. We’re becoming absolutely intolerant of archaic financial technologies — it’s a double-edge sword. Some millennials I’ve spoken to have switched banking institutions simply because they were asked to visit a branch to fill in a form. That’s not as outrageous as it sounds and creates a clear choice — one institution that is wasting out time, and one that isn’t. This is becoming a recurring theme. In an industry that is hosting extravagant three-day summits to discuss how to engage the younger generation, innovative FinTech startups are actually doing just that. The success of any evolving industry depends on its ability to innovate, adapt, and adopt new technologies. With our attention spans shortened and exhausted elsewhere, millennials are destroying archaic traditional banks — and, in most cases, it’s the banks’ fault.
6. Millennials are less susceptible to advertising for financial services, and prefer referrals from a trusted friend or source — about one-third of our new customers come directly from referrals. Advertising is a fickle industry at best, and traditional banking institutions fail to connect with millennials because their underlying services and thinking are flawed. Another successful channel for Spaceship has been outreach, which involves our team hosting, speaking at, and attending millennial-focused events. This creates real advocates for our brand and allows us to connect with millennials on a personal level. The numbers don’t lie — not only do millennials we meet at outreach events sign up, but they voluntarily leverage their own networks to refer up to 112 people. Excluding our team, our top 10 referrers have signed up over 600 friends). How often to do you hear a friend raving about their banking experience to a friend?
7. Millennials have entirely different life and financial goals — most mid-twenties millennials I speak to aren’t even thinking about owning a house. At least not yet. Our parents were able to purchase a home for only three times their salary in the 80’s. For our generation, the typical Sydney house costs more than $1 million — this equates to a median multiple of 12.2 times what the middle-income household in the city earns in a year. For two years running, Sydney is the second least affordable market in the world (according to Demographia’s 2017 annual survey). Melbourne isn’t far behind at 9.5x.
8. Millennials can be loyal — we get a bad wrap for switching brands, jobs and our loyalties more rapidly than our predecessors. My dad has been drinking the same beer for 30 years. In contrast, our generation is fiercely loyal to companies that deserve loyalty, and quick to leave when our trust is lost. When there are now hundreds of alternatives out there to chose from, why stick with a brand that doesn’t share our values or connect with us on a personal level?
9. Lastly, and most importantly, there is no financial brand for our generation — what is your favourite financial brand? I ask millennials the same question and their answers reveals an compelling truth — this is the gaping hole in financial services.

This last point reveals the true underlying public disquiet that traditional financial services and banking institutions have been unable (or unwilling) to address. This is the new paradigm in banking — the ground is shifting underneath the industry and to truly connect with millennials means to truly focus on the customer. Bill was onto something way back in 1994, when he stated:

“Banking is necessary, but banks are not.” — Bill Gates

At Spaceship, we’re working hard to fill this void by becoming the brand that young Australians trust and feel comfortable connecting with and one that they can grow with. We’ll nurture your financial capital so you can focus on the important stuff — growing your human capital instead. In doing so, we want to foster the same 30-year relationships that have been lost in the previous generation and take you on this journey with us.

Recommended reading — Deep Work: Rules for Focused Success in a Distracted World, Cal Newport

“One of the most valuable skills in our economy is becoming increasingly rare. If you master this skill, you’ll achieve extraordinary results.”

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