When It Comes to Money, Millennials Bow to Peer Pressure

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Group of young people inserting coins to a piggy bank.
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Peer pressure lives on after high school, at least for millennials, those Americans currently ages 25 to 34.

A new study from the American Institute of CPAs and the Ad Council shows that 78 percent of millennials base the way they handle their own money on their friends' financial habits.

The national survey, a launching pad for a new series of public service announcements called "Feed the Pig" that aims to get younger adults thinking about their future financial security, found widespread dependence on friends and family.

Far more than half (61 percent) still need money from their parents or other family members to make ends meet. They also rely on their friends for direction on lifestyle decisions:
  • 66 percent of those polled say they want to keep pace with their peers on where they live.
  • 64 percent strive to stay on par with their friends on the fashion/clothing front.
  • Nearly two-thirds report feeling pressure to keep up with the types of places their friends eat and the type of gadgets they buy.
Definition of Financial Stability

According to the survey, 70 percent of younger adults think financial stability means paying all their bills each month. Among the millennials, though, that goal is still a stretch. Not only do the majority still rely on Mom and Dad for financial help, but 45 percent needed to use a credit card to cover necessities (like food or a utility bill) during the past year.

Managing credit card debt has become a problem for this group: 28 percent report being contacted by a bill collector in the past year, and 24 percent missed a payment to a credit card or other debt repayment plan.

If you're looking for help from someone other than your friends for money management tips, FeedthePig.org was relaunched in October and includes a variety of tools such as personal finance calculators and action plans for achieving goals like paying off your debt, saving for a down payment on a house, and saving to start a family.

Michele Lerner is a Motley Fool contributing writer.

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John Hyche

There is a clear need for financial education, and Millennials are't the only ones who need it. Our financial institutions and school systems need to step up and meet this need. Failure to do so has serious consequences on both the personal and national levels.

November 06 2013 at 10:14 AM Report abuse rate up rate down Reply
Dustin Gervais

Hearing this makes me sad, though I wonder how much different we have it as compared to previous generations. My wife and I, I guess are atypical, in that we not only pay our bills, but operate on a monthly budget, use cash for all purchases, have no credit cards, and have almost completely paid off our debt (Student Loans, Cars) in spite of having both lost our full time jobs in the last year. I will tell you that we face the peer pressure too, and have learned to say no, but that doing so is difficult. I think one author said it best, that the Jones's are broke, and that trying to keep up with them will make you broke. I wish more of my generation realized that.

November 05 2013 at 10:49 PM Report abuse rate up rate down Reply
Keith

The blind leading the blind.

November 05 2013 at 8:46 PM Report abuse rate up rate down Reply
ravenlost

The root of the problem with many of the younger people who are struggling, is that many do not know the difference between a NEED and a WANT. Or what is necessary and what is not.

November 05 2013 at 4:34 PM Report abuse rate up rate down Reply