What Do Millennial Women Think About Money?

Women’s relationship with money in the United States has been something of an evolving area in the 242 years since Thomas Jefferson declared America’s independence with the phrase “all men are created equal.”

In those days, women could not control bank accounts, own land, write wills or checks, or inherit property of their own except by special dispensation from a magistrate. In the Commonwealth of Massachusetts, women weren’t even legally allowed to own high-heel shoes for fear they would ensnare unwitting men into marriage on false pretenses.

By the 1800s, the situation had improved, both in terms of money and choice of footwear. In 1809, with the passage of the nation’s first Married Women Property laws in Connecticut, states and territories began a 100-year process of allowing women to write wills, inherit land and money, collect rent, control their wages and individually own property — rather than communal ownership. In 1865, the Homestead Act made it legal for women to stake homesteads, a practice later followed in several Western States.

Moving into the 20th century, in 1920, women got the right to vote nationwide via the 19th amendment to the constitution. In 1974, women won the right to apply for and control their own credit card with the passage of the Equal Credit Opportunity Act.

Though the progress has been slow, it has also been steady. It has made the millennial generation of women— either entering or settling into their prime spending years — something of a unique class of citizens when it comes to financial services. They are the first generation of American women to have been born after all of this progress happened.

This is why, Visa’s SVP of North American Marketing Mary Ann Reilly told Karen Webster in a recent conversation, millennial women are the demographic Visa has chosen to focus on as part of its “Money is Changing” project.

In its conversations with thousands of millennials (men and women), it became clear that millennial women have a different and “more empowered perceptions of money” than their Gen X predecessors. Though millennials and Gen X women are about equally likely to define money in terms of security and freedom, millennial women were much more likely to define money in terms of independence, power, success and happiness.

In fact, millennial women — more than either Gen X women and their male counterparts — were most likely to define money in terms of independence, with 57 percent choosing this feature in the importance of money.

“I think we are at a tipping point. Millennial women are evolving into very [a] different relationship with money,” said Reilly. “They are actually more conservative spenders than previous generations because they are a generation that feels responsible for their own financial future. That is something new and defining, and that means they are more career-driven and more motivated to control their own money, but it also means they are more concerned about money.”

That tension, Reilly noted, increased feelings of freedom and independence. The good that financial control brings — and the less welcome feelings of anxiety and pressure that goes along with those responsibilities — is why the Money is Changing project is really a two-phase endeavor. Phase One is underway, and involves learning more about this unique and emerging class of financial services customers. Phase Two, she noted, will be about building to the needs discovered.

The Emerging Changes

Millennial women are different — by the numbers — from their mothers and older sisters in many regards, in ways both large and small. They are more likely, for example, to want to pay for a first date. Only 40 percent of millennial women expect their male date to be on the hook financially for the first evening out on the town, and 33 percent of millennial women actually prefer to pay for the first date, saying it makes them feel more empowered.

They are also increasingly focused on their own finances, as opposed to worrying directly about what their partner will make, with nearly half saying that earnings do not figure at all into their calculations when thinking about a potential mate. Of course, to go along with the good news that she is not judging them for how lucrative — or not — their job is, there is some bad news for those potential mates. It seems millennial women have found ways to rechannel that focus into worrying about their own careers and how much they make.

Visa’s study found that 62 percent of millennial women would never quit their jobs, regardless of how much their partner makes, and that a disproportionate number feels like they aren’t making enough. According to the study, women are more likely to feel like they are living paycheck to paycheck, no matter how much money they actually make.

The stresses, Reilly noted, are there — but the direction is clearly forward, and the trend line is pointing in an unmistakable direction for the next generation of female financial services clients.

“The power and appeal of independence is a big take away from this. Women want to earn money and be empowered by it. The problem we see, though, is that women are still deeply uncomfortable talking about it,” Reilly said.

That old habit, she added, is dying hard and acting as a significant anchor to female empowerment.

Fighting Old Bad Habits

Some degree of hesitation in talking about money is both prudent and advisable, Reilly noted. Men and women alike don’t tend to call each other up and talk at great breadth and length about their salaries, as that sort of behavior is generally considered boorish. But for women, that discomfort statistically runs deeper and is much more pernicious.

“Women are so uncomfortable in talking about money, they don’t want to ask for a promotion because it is so difficult for them to ask for a raise. We saw 60 percent of respondents telling us they were so uncomfortable asking to be paid back by friends who owe them, that they just never ask,” she said.

It is a spillover of an old social norm, and one that is enforced subtlety in all sorts of aspects of life. Going to a restaurant and asking for a check, she noted, will still mostly end with a waitperson handing the male the check instead of just putting it in the middle and letting the couple decide.

“And that kind of small stuff happens all the time, in business meetings, in group settings and social gatherings,” Reilly added.

This means that it often cuts off conversations that women can — and should — be having, because of their discomfort. According to Visa’s data, 74 percent of women talk to friends about their career, but only 27 percent discuss salary, which really cuts off one’s options when looking to brainstorm strategies for raising one, noted Reilly.

It’s a cultural dynamic, she said, that is ready to change. But to change and get over that tipping point, it won’t be enough to just hear out the problems. There also has to be a focus on building out the solutions.

Building A Better Toolbox

The problem, according to Reilly and Visa, is that there aren’t enough broadly useful tools for the millennial customer, particularly the female millennial customer, when it comes to getting more out of money and making it something people are comfortable managing.

“But we really want to develop this right from the beginning,” Reilly said,“and that means we are interested to learn from this what it is millennial women actually want so we can determine how best to meet their needs, instead of just sort of telling them what we have for them.”

Millennial women are very much part of a generation in flux — there is a “big split” at the age of 30 as younger consumers start marrying, having families and settling deeper roots in their careers. This is a generation that needs services, and because of the unique historical moment they were born into, those solutions will probably be a bit different than offerings that have come before.

“What I want is for women to be able to communicate with us about [what] would be helpful for us to provide. Visa is a leader in payments, and we have a unique position — and even obligation — to help this generation manage their money, track their money and think about payments in a way that is more innovative,” Reilly said.

How that will play into the construction phase, she noted, is still up in the air. Visa knows it will be building Phase Two of the Money is Changing project, but as to what they will be building? That, Reilly said, will very much depend on what else Visa learns through its ongoing conversation with millennial women, as Phase One continues to develop and progress.