Millennials survival worries a hurdle in managing their personal finances

Study after study shows that few things in life have generated as much stress as financial fear in the modern-day workplace.

The art of managing finances, no matter the social or political wind, has proven to be, largely, the result of one’s upbringing. How different generations perceive and appreciate financial literacy differ. This has been made even more engrossing by the emergence of the millennial generation.

There is a notable generational knowledge gap between millennials and other generations before them when it comes to financial literacy. The perception that millennials have questionable personal finance habits should be a great concern in a country where millennials are already dominating the workforce, in the present and future.

According to data from US-based Population Reference Bureau (PRB), the proportion of Kenya’s youth to the population is among the highest globally, presenting the economy with the opportunity of a vibrant manpower if put to productive use. Millennials add up to 10.1 million out of Kenya’s population of 49.7 million people.

Why then are millennials not great at managing finances? There are intriguing explanations but the most common one is that a typical millennial is preoccupied by day-to-day worries of survival. Top of mind is keeping their jobs, growing their skillset, managing debt in a credit-innovative economy, potentially bringing up families in a safe environment whilst enjoying a standard quality of life.

The other reason mentioned for the millennials’ struggle with finances, albeit a highly divisive one, is an education system indicted for being less successful at churning out knowledgeable, well-rounded individuals with the capability to handle practical challenges of modern life.

The proposed requirement for schools to teach money skills alongside mainstream topics like Mathematics and Business Studies cannot be overstated.

With all the reservations on millennial insufficiencies when it comes to financial responsibility notwithstanding, their well-proven ability to use technology that churns out solutions to societal problems is a plus. They are savvy and are keen to chart a new territory in personal financial literacy, on their own terms.

Herein lies an opportunity. Employers, particularly, must see the prospect and vested interest in promoting a financial wellness agenda to this cohort. Indeed, it is innately linked to individual and organisational bottom-line.

In fact, a global PwC Survey on Employee Financial Wellness in 2018 placed higher worker productivity, reduced absenteeism on the job and reduced health care costs as accrued benefits of well executed financial wellness initiatives.

The onus is on latter-day employers to partake in efforts that inculcate strategic financial wellness dialogue, speaking to millennials in a relatable way.

A fundamental component of the financial wellness initiative must definitely involve some of the biggest employee pain-points on how to either protect or consolidate assets – retirement plans, investments, planning and savings, insuring of family’s health, education, motor or home. All of these require financial decision- making and comprehensive financial wellness programmes.

Such a financial wellness programme would require a financial expert or advisory outfit with access to high level of information and a deep understanding of the changing complex markets.

Lberty Life Assurance Kenya, a financial advisory think tank with over 50 years’ experience of financial advice in life insurance, investment solutions, education and retirement savings plans in Kenya is premised around the general idea of securing the holy grail that is financial freedom for its customers.

This is one of the ways that we can contribute towards supporting millennials, and the rest of the population, to deal with the financial vagaries of modern day living.

The earlier the employers and the ever-growing millennial workforce meet in the middle and establish practices and pillars of financial security, the better it will be for the economy and society as a whole. This will ensure more possibilities for attaining financial freedom are guaranteed later in life.

The writer is managing director, LibertyLife Assurance.