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Live like mom and dad at the expense of mom and dad

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Belgian Millennial saves 394,5 EURO per month

Hotel Mom and Dad has never been so popular as it is with millennial Belgians. By staying at their parent’s house, they have the opportunity to copy their lifestyle without having to spend the same amount as them. Millennials, made up of Belgians between the ages of 18 and 34, save on average 394.5 euro per month, approximately one-fifth of their income. This savings allows them to remain in the safety of mom and dad while exploring the world. This is at least the case for respondents of a 1.000 person study of Belgian Millennials done by Keytrade Bank.

Men save more than women

Compared to previous generations, millennials have fewer financial ambitions. For them, financial success means being able to maintain the lifestyle of their parents. Further, they do not only wish to live like their parents, but also save like them. They do this by following the golden rule they have learned since childhood: you must save, save, save to fill your account.

In the employment market, millennial Belgians earn on average 1.883,4 euros per months, with 83.5% of them depositing a part of this in savings accounts. On average, this represents 394.4 euros per months, or one-fifth of their monthly income.

It’s surprising to note that Flemish people are more likely to save than Francophones, with 90.1% of the former and 72% of the latter using savings accounts. Flemish speaking Belgians save approximately 432.3 euro on average per month compared to 329.4 euro per month saved by Francophones. Also, men save much more than women, 413.2 euro compared to 371.5 euro, respectively. Even when taken into account the difference in salaries, the percentage of savings remains higher with males.

At their parents, it’s free

For millennials, the main challenge is finding a way to live the way their parents live without spending the same amount. The solution is apparently simple: you just have to keep living with them.

Leaving the family nest seems harder than ever nowadays as 40% of millennials still live with their parents. And for those older than 25, there is still a 25% chance they live at home. Still more surprising, no matter what age of respondent, many say they see themselves staying at their parents’ for up to four more years. The goal is clearly to push back the deadline as long as possible. Males generally hope to drag it out the longest – 4.8 years, while with females it’s slightly less – 3.7 years. For Francophones, it is higher at 4.7 years when compared with Flemish people, who considering staying another 3.9 years.

More and more often, parents are asking nothing in return with only one in five millennials needing to contribute financially to continue living at home. Unsurprisingly, young people who have not found their own living space have the ability to enjoy a higher quality lifestyle when compared to their contemporaries who have spread their wings. These youths spend more on clothes (+84.6%), technology (+67.7%) and activities such as festivals (+103.6%) when compared to millennials with their own places.

Thirst for experience

Even if they have not flown the coop, millennials are desperate to discover the world around them. For 32.2% of respondents, financial success means being able to travel regularly. Vacations make up, along with living expenses, a major part of their overall spending habits. This desire to travel is especially seen in millennials under the age of 25, with 41.8% of them saying financial success and regular travel are essential partners.

It’s interesting to note that not even financial difficulties will prevent millennials from being globe trotters. “If we examine their expenses that they place on credit, almost half of under 25s admit to using this strategy to enable travel. It also seems that parents are just as likely to reach into their wallets to enable their children to see the world. This phenomenon is much more frequent in Flanders, where 23.1% of parents will spend on their child’s travel, when compared to Wallonia, where only 14% of parents will do the same,” explains Steven De Backer, Communication manager.

Time costs nothing

If the baby-boomers could count on anything it was high interest rates, attractive mortgage discounts, and a generally favorable financial atmosphere, millennials are confronted with quite the opposite.

“To maintain the same lifestyle as their parents, millennials cannot take the same approach to build up wealth. They are, for example, much less likely to take advantage of the fiscal benefits of retirement savings. Currently, only 39.9% of young people are relying on such a strategy. Additionally, they do not even see the relevance of doing so until they are past 30” states Steven De Backer.

Investment possibilities are also not sufficiently used: only 1 in 8 millennials (13.8%) said they had invested, which could also be reflective of an interesting solution to hedge their risk. Time is expressly part of something which cannot be bought and millennials have plenty of it.

“Anyone who utilizes a savings account, who uses a retirement savings plan, and has a sum that is not necessary in the near future has immense opportunities to make their money go further. Savings accounts and funds such as Keyplan offer in this respect an ideal complementary savings opportunity. They offer, in effect, a diversification solution and are also very accessible since you can begin by saving 25 euro at a time.”

Excess of confidence?

Curiously, the study shows that millennials do not only want to live the same lifestyle as their parents but also want to save like them, despite a vastly different economic and financial reality. Actually, they barely know any other possibilities or if they do, they find them to risky. Financials confidence (78% claim to be reasonably or very confident about their financial future) does not correspond to their behavior.

“We moeten jongeren bewust maken hoe ze het klassieke spaarboekje kunnen aanvullen. De millennials zijn bij uitstek de generatie die extra schwung kan brengen in de economie, maar hun spaargedrag staat op dit moment haaks op de ondernemingszin die ze steeds vaker aan de dag leggen.”

“We should make young people aware of solution they have at their disposal to utilize a traditional savings account. The economy needs millennials in order to pass another growth threshold, but the way in which they are currently saving is the exact opposite of the business spirit they are showcasing.”

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