There is no denying the fact that Millennials have spent the last decade struggling to build wealth. The 2008 Global Financial Crisis has seen ripple effects impacting this generation heavily: the last decade marked with rising debt, job insecurity, housing affordability, wage gaps, rising cost of living and delayed decisions in home ownership and marriage. Fast forward to 2020 and the current global pandemic; another period of economic uncertainty and continued doubt that affects millennial wealth.
For older generations, such as Baby Boomers who own 53 per cent of the country’s wealth, this might not seem like an issue. But what about for those millennial entrepreneurs, business owners and employees? What are the risks to business? Performance? Managing teams?
Financial challenges mean loans are required: loans that add debt to debt. More debt equates to more stress and anxiety. More stress and anxiety translate into loss of productivity, lower performance, or absence from the workplace. Decreased performance equates to lower revenue. Lower revenue equates to risk of business closure.
It’s easy to see how the ripple effect of this generational issue bleeds into business. Easy to see why being aware of it is important.
The good news is, research is suggesting that amidst this economic crisis, there is a silver lining. In fact, the economic impact from COVID-19 has inspired a revived drive within the generation, and many millennials (including business owners) are shifting their focus towards wealth-building and financial literacy because they’re motivated to learn how to future-proof finances.
Limiting expenses, optimising savings, and expanding investment portfolios are behaviours being observed. Research indicating that up to two-thirds of millennials have changed their thinking when it comes to spending, with much of the population already spending less. Broader plans to reduce travel and trips to the office, moving closer to family or forsaking cities for less populated areas are all on the consideration list. Millennial business owners and entrepreneurs taking control over their finances: examining cashflow, rethinking spending, and reducing overheads.
As millennial business owners there are strategies you can adopt to help minimise strain and improve finances. Equally, if you are a leader or manager with millennial teams, these same tips can be offered as guidance.
Jacqueline Cripps, Management Consultant and CEO, JCL