Millennial women are said to be far more confident than previous generations when it comes to money, investing and being financially independent.
So what are they doing right that we can all learn from, and what could they be doing better?
We ask Sarah Riegelhuth from Wealth Enhancers who’s a bit of an expert on Generation Y, about how millennial women spend their money and what they could or should be doing to maximise it.
Common money mistakes Gen Y women make?
Probably the biggest mistake I see is sitting on cash.
Gen Y women have a tendency to build up a solid savings account, but then become a little paralysed by what to do next.
Cash feels safe, and taking the plunge into shares and property feels scary, however the challenge with keeping all of your hard earned dollars in the bank is that you’ll go broke safely.
Essentially the rate of interest you’re earning on your cash can’t keep up with inflation, and there is no capital growth on your dollars either. Over the long term, you’re deteriorating the value of your money.
Gen Y money and investing traits
We see a genuine desire to build wealth and financial freedom for themselves, but a fear around where to start and what to do next.
There is a misconception that we should all know what to do, and given money is probably the last ‘taboo’ when it comes to conversation it’s not something we talk about or share with our friends.
Unfortunately this just leads to a feeling of shame around where we are compared to where we feel we ‘should’ be, and in many cases stops women from seeking advice and assistance to build and manage their wealth.
How are Gen Y women any more confident with money?
We’ve (for the most part) let go of the idea that a man is our financial plan, and we know that we need to build and manage our own financial security.
With more access to information, and so many online resources, it’s making it easier for everyone to learn and understand personal finance better.
What is the asset class of choice for Gen Y women?
I think prior to seeking financial advice, or putting a lot of time and effort into your own research, a lot of women get stuck in cash as they’re fearful of investing in shares or property.
In many cases, the next favourite asset class is property, because it feels safe.
Something about being able to touch and feel a property makes it seem a lot less scary that investing in shares.
In many cases it’s the one and only asset someone’s holding and they’ve used up all their cash to purchase it, the downside to this is that all your eggs are in one basket and you have no other cash or liquid investments to use if something goes wrong.
In many cases people are mortgaged to the hilt and one interest rate rise, or broken hot water system can be enough to tip them over the edge, resulting in them selling the property before they’ve had time to realise any investment returns.