A survey by shopping and payments provider Klarna has uncovered attitudes to and habits around money management across different age groups, including 1,100 Australian Millennials.
The study revealed that responsible money management is a priority for younger generations, both locally and internationally, with about two in five (42 per cent) Australian Millennials believing they are more financially responsible than they are given credit for.
Higher than the global average of 33 per cent, Australian Millennials claimed the number one spot, beating the other countries surveyed: US (38 per cent), Finland (36 per cent), Spain (36 per cent), the Netherlands (31 per cent), Germany (30 per cent), Norway (29 per cent), Sweden (28 per cent) and the UK (27 per cent).
However, Klarna also found that despite almost half of Australian Millennials seeing themselves as being financially savvy, only 46 per cent feel financially stable, slightly lower than the global average of 50 per cent.
Finland topped this list with 60 per cent, followed by Sweden, Spain and Norway with 56 per cent.
On a more positive note, half of Australian Millennials surveyed have a rainy-day fund that they regularly put money aside for — equal third with the US behind Germany (60 per cent) and Spain (54 per cent).
“In general, Millennials are optimistic about their ability to manage their own money, with two-thirds of younger Australians having plans in place to save for the future, much higher than the global average,” said Klarna’s general manager for Australia and New Zealand, Fran Ereira.
“Our findings suggest that while the way they manage their money is very different to older generations, Millennials are conscious and conscientious when it comes to their finances, with many turning to new technology and each other to stay on track,” added Ms Ereira.
Technology key to financial savviness
As such, 86 per cent of Millennials in Australia — compared to 78 per cent across the globe — said that technology plays a particularly important role in helping them manage their money, while 57 per cent use technology to track how they spend, compared to 47 per cent of older generations in Australia.
Further, 58 per cent of Millennials in Australia — and more than half of Millennials globally — also say that technology enables them to have better oversight of all their finances.
With almost 2 million Australians using a buy now, pay later provider in the year to September 2019, up from 1.38 million in the previous 12 months, the rising popularity of digital BNPL services was reflected in the Klarna survey, with only 56 per cent of Australians owning a credit card, the second lowest figure ahead of the Netherlands (51 per cent).
Talking about money
Moreover, Klarna found that Millennials are also more likely to discuss money with friends, family and colleagues than older generations.
Mirroring global findings, 51 per cent of Millennials in Australia think it is important to talk openly about money, and 54 per cent say that transparency around finances is important for people’s wellbeing.
The survey found that two-thirds of Aussie Millennials speak openly about their salary with their partners, but that number decreases with age, dropping to less than half of people aged 55-plus.
As a result, Millennials value transparency in their financial advisers, with about one-third (34 per cent) stating that transparency around terms and conditions increases their trust in and loyalty to a provider.
The research was conducted by Censuswide in January 2020 in the UK, the US, Australia, Germany, Austria, the Netherlands, Norway, Sweden, Finland and Spain.
For the purposes of this research, “Millennials” refers to those aged between 18 and 38.