SAN FRANCISCO — According to the Bank of the West 2017 Millennial Study released today, Millennials imagine themselves untethered and without boundaries, yet their actions tell a very different story of stability. Like previous generations, Millennials want to achieve the classic American Dream of owning a home, paying off debt, and someday retiring from a fulfilling career, but they also have a desire to travel, to live abroad, and to pursue their passions. This study explores the contrasts between how Millennials think of themselves and how they’re actually living, and reveals Millennials’ new American Dream and their plans to finance it.
“Millennials dream of living abroad, moving to a new city and switching careers, but in reality they are quite satisfied with stability,” said Paul Appleton, executive vice president, Consumer Payments & Product, Bank of the West. “It’s an interesting dichotomy that doesn’t appear with Gen-Xers or Boomers. This generation is dreaming bigger and better, and while they are confident they’ll fulfill their dreams, they need help figuring out how to fund them.”
More than six in 10 Millennials believe the American Dream is still alive today. In fact, they even agree with Gen Xers and Boomers, calling out being happy (70%), owning a home (60%), being debt-free (55%), and retiring comfortably (51%) as the top four ingredients of their American Dream. However, for this youngest working generation, there is a difference between the lives they say they want and the lives they actually lead.
The Conflicting Millennial Perspective: Home, Career, and Family
When considering where to call home, the overwhelming majority of Millennials (85%) say it’s important to have the flexibility to move when they want. Most Millennials (67%) even say they would like to live abroad at some point in their lives, and nearly a third of this group can see themselves building a life in another country for the long haul. However, this perspective is very different from how they’re actually living. On average, they only envision themselves packing up and moving to a new city, state or country fewer than two more times in their lives, and most (68%) even say they would prefer to build a life in one community, rather than live and work in multiple geographies. This is evidenced by some Millennials’ decision to buy their homes (43%)—a purchase that can make relocation more challenging. At odds with their reputation for being the renting generation, for those Millennials who are not yet home owners, three in four say they could be motivated to buy a house.
The misalignment between Millennials’ dreams and actions is evident in their career paths as well. Nearly half (48%) agree that they would need to switch employers every few years to be paid what they feel they’re worth. In practice, however, most Millennials (65%) are happy working for their current company, while 79 percent say they wouldn’t quit their current jobs to pursue another career and 62 percent would not move cross-country without a new job offer in hand.
Millennials are also focused on building a family, which makes uprooting their lives at a moment’s notice more challenging — and when asked whether they’d prefer a fulfilling family life or a fulfilling professional life, more than three-quarters (78%) of Millennials would put their family life first. If given the choice between moving closer or farther away from their families, eight in 10 would move closer.
This struggle between imagining their lives with no limits, while wanting to put down roots, may be taking an emotional toll on Millennials: the majority (64%) say they sometimes feel stuck in the life they have.
A Goal-Oriented Generation Needs a Plan
Millennials are a generation of optimists. Even with such a lengthy list of dreams to chase, the vast majority (85%) say they are confident that they will attain their American Dream.
Millennials in particular believe they have been granted the chance to achieve their goals: 67 percent agree that they have more opportunity to be successful than their parents had. When it comes to making their dreams a reality, all respondents overwhelmingly felt that having the opportunity (80%), not innate ability (20%), is the key to reaching their goals.
Despite this optimism, only half of Millennials (49%) have a plan in place to finance their American Dream. Without a roadmap to guide them, Millennials’ savings habits do not align with their goals for the future. They prioritize one day owning a home and saving for retirement—and yet in practice, more Millennials are saving to travel than for either of these two goals.
“Millennials have high expectations for their personal and professional lives, and are driven and able to accomplish the goals that they’ve set out for themselves,” Appleton added. “They want the choice and flexibility to make their own decisions — whether it is to build a new life in a foreign country, navigate a career change to pursue their passions, or buy a home and raise a family. By putting a financial plan in place, Millennials can ensure they have the means to build the life they want to lead.”
Making Dreams a Reality
Millennials are more likely than older generations to say that budgeting tips and free financial education would most help them to reach their American Dream.
One behavior that could hold Millennials back is a preference to save cash for a rainy day rather than invest for the future. Having come of age during the volatility of the Great Recession, Millennials gravitate toward low-risk strategies, with most (76%) saving in cash or checking and saving accounts. Only 17 percent say they were investing on their own and less than one in 10 (7%) were leveraging the help of an advisor or robo-advisor.
For those looking to make their financial goals a reality, here are three steps to keep in mind:
- Set a Budget: A helpful first step may be to make a budget. Consider taking advantage of free personal financial management tools and apps to track spending and form good habits.
- Think Long-Term: Incorporate long-term goals when thinking about budgeting for today. Make investing for retirement a line item next to rent/mortgage payments, transportation costs, entertainment and other monthly expenses. Taking a few simple steps today can help prepare for the future.
- Move from Saver to Investor: Each month think about taking some of your savings and invest that for an opportunity to generate a return. One way to make investing a habit that’s difficult to break is to set up automatic transfers and automatic investments, putting funds to work for the future right away.
Bank of the West offers an array of resources for customers who want to learn more about how to manage their finances. Check out the Bank of the West blog’s “Your Finances” channel for tips to curb spending, save more, protect identity, and help to reach financial goals for the future.
About the Study
Data was collected in an online survey by Maru|Matchbox on behalf of Bank of the West from January 17th – 23rd, 2017. The sample was United States based among 1,010 members of its proprietary Springboard America panel consisting of 80% Millennials (Ages 21-34), 10% Generation X (Ages 35-51), and 10% Baby Boomers (Ages 52-70). Of the 1,010 respondents, 201 individuals were from California, eighty-six percent of which were Millennials.
Source: Bank of the West