VIENNA, Va.–There is an opportunity for credit unions when it comes to Millennials and a divide between perception and reality about their personal finances, according to one new analysis.
Millennials are thinking less and less about their finances, according to a new report by Navy Federal Credit Union. And even though their account balances would seem to indicate otherwise, most Millennials also said they feel prepared for a financial emergency and on track for retirement.
According to the Navy Federal report:
- The number of Millennials focused on their finances fell from 52% in 2015 to 37% this year
- 18% of Millennials keep a household budget and review it annually
- 36% checked their credit score in the last year
- 26% feel like they know enough to meet their financial goals
Military Millennials, identified as those who are active duty, a partner to someone on active duty or a veteran, fared slightly better, but their percentages were not much stronger, the research found.
Still, while credit union financial counselors may see financial problems for many of those who participated in the survey, the participants don’t see it that way. Approximately 56% of Millennials and 84% of military Millennials said they are prepared for a financial emergency, while 64% of Millennials and 78% of military Millennials believe they're on track to meet their five-year retirement savings goal.
That confidence comes even though just 17% of Millennials and 27% of military Millennials have an emergency fund, and only 28% of Millennials and 35% of military Millennials are saving for retirement. Despite that state of affairs, nine out of 10 say that savings is a top priority for them, the report found.
In a statement released by the credit union, Marcia Sanford, VP-member research, intelligence and development at Navy Federal, suggested the divide between perception and reality is where financial institutions have an opportunity to serve.
“Our survey shows Millennials know saving is important, they just need the tools and guidance to reach their financial aspirations. That’s where we come in,” said Sanford. “Financial institutions can and should do more to close the gap between what Millennials think they’re prepared to handle and the reality of their financial situation.”
But there are numerous challenges in helping to close that gap, the report found. The majority of survey respondents trusted their own research most when it comes to savings, retirement planning, auto loans, mortgages and debt consolidation. Navy Federal also found that 48% of Millennials are what the report dubbed "avoiders,” as they ignore advisors and don't gather their own information.
The report is based on a survey of nearly 1,600 Millennials between the ages of 18 and 34.