Millennials working out to stay in good financial shape

While millennials have been labeled the “YOLO (you only live once)” generation, and therefore characterized as being financially irresponsible and spending too much on frivolous things or experiences, a study by insurance company Allianz Life found that they are actually positioning themselves to be in better financial shape than previous generations.

According to “The Allianz Generations Ahead Study,” 77 percent of millennials feel financially confident (compared to only 64 percent of Gen Xers), while 41 percent of them reported that they always set aside money each month for saving (compared to only 36 percent of Gen Xers) and 58 percent believe saving for retirement is a basic necessity, like food or housing.

Furthermore, many millennials (71 percent) also use “tricks” to make saving money easier.

For example, the majority of them use several accounts to automatically save their money for specific purposes (one for everyday expenses, one for a particular loan, one for a special trip, etc.).

What endangers these healthy financial habits, says the study, is social media and FOMO (fear of missing out)—more than half (55 percent) reported experiencing FOMO, and 57 percent said they spent money they hadn’t planned to because of what they saw on their social media feeds.

Recent financial traumas witnessed by millennials have also had a profound effect, the study says.

Nearly a quarter (24 percent) of millennials saw their parents suffer a major financial setback during the recession of 2008-2009 and, possibly, because of this, 57 percent said they were unlikely to ever invest in the stock market. Additionally, 65 percent said they were uncomfortable with too much debt because they saw their parents struggle with it.

The study also found that this generation is the most open to getting help.

While the vast majority of millennials (70 percent) use online apps or tools to help them manage their money, human support is still very valuable to them.

Forty percent of millennials said they had a financial professional and work closely with them (compared to only 25 percent of Gen Xers).

Many millennials believe having the assistance of a financial professional would give them some relief from the pressure of trying to plan for their family’s future, as 70 percent are overwhelmed by the thought of how they could provide for themselves and their family in the long term.

The Allianz Generations Ahead Study, commissioned by Allianz Life, was conducted in May 2017 by Larson Research + Strategy via online survey among over 3,000 adults in the US ages 20-70 with a minimum household income of $30,000, and was commissioned by Allianz Life.

Taking their cue from the study’s results, local life insurance firm Allianz PNB Life took a look at Filipino millennials and found that they comprise half of the current workforce population, and that by 2025, 75 percent of the global workforce would be made up of millennials. Gae Martinez, Allianz PNB Life chief marketing officer, says that the company felt that such a large market deserves an insurance product crafted specifically for them—hence the company’s recent launch of Azpire Growth Prime, a regular pay unit-linked life insurance plan.

“[Millennials] are a segment that we can’t ignore; we need to serve them,” says Martinez. “Since they have a tendency to go ‘YOLO!’ and spend, this is a product that will encourage them to save and invest.”

Azpire Growth Prime, Martinez says, offers insurance protection while setting aside part of one’s premium as investment. It also offers insurance coverage of up to five times one’s annual premium, and gives one access to investment opportunities locally and globally through Allianz PNB Life’s wide array of expertly managed funds depending on respective risk profiles.

“We’ve all heard that millennials are known to make purchases spontaneously. Instead of spending, you may want to use that extra income for additional investment. With Azpire Growth, you can level your investments with top-ups anytime. You can invest more without having to take out another policy,” Martinez explains.

Premiums start at P30,000 a year, which one can pay annually, semi-annually, quarterly, or monthly.

Martinez says it is the first time of Allianz PNB Life to introduce a monthly payment scheme through Azpire, which they will soon be offering as well for their other products.

To further encourage millennials to be more financially responsible, Allianz PNB Life has also launched Start: The Search for Inspired Young Entrepreneurs.

The competition will award five millennials—one each from the Northern Luzon provinces, Southern Luzon provinces, Metro Manila, Visayas, and Mindanao—with seed money worth P50,000 to help them get started on their entrepreneurial venture.

Interested participants need to register on https://allianzpnblife.ph/start, and then post a video describing their business idea on Facebook, tag @AllianzPNBLifeOfficial, and include the hashtags #AllianzPH and #AllianzStartPH2018.

“Just because millennials have been associated with YOLO doesn’t mean they don’t have an entrepreneurial mindset,” says Reynulfo Abrazaldo, brand communications and digital director of Allianz PNB Life. “They just need a little support to make that [business idea] actually happen.”