• by Nicole Granese , Jordan Latham , April 22, 2013

For years, marketers have classified 18-35 year olds as “Millennials,” because they share similar characteristics. However, there is value in segmenting this generation further into older (27-35) and younger (18-26) Millennials when looking at financial attitudes, as this generation experienced the recession and, thus, its effects in vastly different ways. Though all Millennials were affected in some way by the recession, younger Millennials, compared to older Millennials at the same life stage, have been more substantively impacted in several ways.

Younger Millennials are more likely to have student loan debt and are less likely to be employed than previous generations.

Since 2010, the share of young Millennials ages 18 to 24 currently employed (54%) has been its lowest since the government began collecting data in 1948. And the gap in employment between the young and all working-age adults—roughly 15 percentage points—is the widest in recorded history. On top of being less likely to currently be employed, young Millennials are also more likely to have student debt. Today, approximately 40% of young households hold student debt compared to around one-third in 2007.

Younger Millennials are more likely to live at home.

Though many Millennials returned to their parents’ homes to recover from recession effects, such as delayed entry into the workforce or job loss, the Boomerang trend is predominantly concentrated to the younger portion of the generation. In a proprietary quantitative study conducted by Slingshot in early 2013 among 250 Millennials, we found that younger Millennials (13%) are more likely to be currently living with their parents than older Millennials (8%) were at the same age. 

Younger Millennials are not purchasing big-ticket items such as a cars or houses.

Because older Millennials came into adulthood prior to the recession, they were able to make significant equity purchases at a younger age. Unlike their counterparts, younger Millennials are delaying big-ticket purchase items such as buying a car or a house. Our research indicates that only 45% of younger Millennials have purchased a car (new or used), while 68% of older Millennials had done so at the same age. In addition, 44% of younger Millennials currently report they have help from their parents paying for their car vs. 29% of the older Millennials at the same age. When it comes to owning a house, 16% of older Millennials had one by age 25 vs. only 10% of younger Millennials. 

Based on our research it is clear that younger Millennials (age 18-26) have been hit significantly harder by the effects of the recession than older Millennials (27-35). Fully 64% of the older group admit that those coming of age now have it worse than they did. Thus, it is no surprise that younger Millennials are more considered consumers, 69% report trying to cut spending on what they don’t need. Of note is also how younger vs. older Millennials define what is a necessity vs. a luxury. In our research we asked Millennials in both age ranges to identify an item they saw as a necessity that others might see as a luxury.  We found that younger Millennials are more likely to consider technology purchases and intangible experiences that foster connectivity as necessities. 

“My iPhone with a fully loaded plan is a necessity because I need to be connected 24-7. I want to stay up-to-date and I definitely don’t want to miss anything.”

“Entertainment. I allow some money per month for going out, being social and enjoying life- I can’t live without that.”

While older Millennials were more likely to note health-related items or specific traditional luxury items as necessities they couldn’t live without. 

“Organic food and a health club membership; it’s critical for my health.”

 “I like to travel internationally and will sacrifice other things to these trips.”

As marketers, we believe it will be critical to track the differences in financial attitudes and behaviors of these two groups well into the future, as it is likely that their different experiences with the recession will affect their attitudes in both the short- and long-term. If differences in their behavior and attitudes remain or further diverge, it could even lead to a reclassification of this generation into two distinct groups. 

In addition, to continual monitoring of these groups, we have a few specific things we plan to keep in mind when targeting younger Millennials vs. their older counterparts that we’d suggest you consider as well:

• They will likely delay their purchase of big ticket items and often evaluate if they need them at all because financing is harder to get or they simply feel more comfortable waiting until they have more of an emergency fund saved -- which means the traditional markers of success are likely to evolve. 
  
  
• They define necessity and luxury very differently than prior generations and consider technology (both devices and data plans/internet connections) at the top of the list of things they won’t cut. 
  
  
• They aren’t ashamed about actively seeking deals or using coupons and are unlikely to make a purchase until they make sure they are getting the best price. 
  
  
• They are more likely to seek educational tools related to finance and consider building a secure future a top priority.