Nairobi — COVID-19 has had a massive impact on the spending and savings of people across generations, but no group more so than Millennials, (those aged 25 to 44), according to Standard Chartered’s latest global survey.
Globally, Millennials are the most likely to be struggling to meet day-to-day expenses (41 percent) and report higher levels of borrowing in the last month (35 percent).
Yet, faced with these challenges, the pandemic has galvanized this generation to better prepare for their financial future, encouraging Millennials to make changes to how they manage their money.
The study of 12,000 adults across 12 markets – Hong Kong, India, Indonesia, Kenya, Mainland China, Malaysia, Pakistan, Singapore, Taiwan, UAE, the UK, and the US – is the third in a three-part series, looking at how COVID-19 has transformed consumers’ way of life, and what changes could be here to stay.
While the first survey focused on the pandemic’s impact on earnings, and the second looked at changing spending habits, the final survey provides new insights into how the global health crisis has altered the way people are managing their money day-to-day, in pursuit of their long-term goals.
In Kenya, 88 percent of people (64 percent globally), have found managing their money more difficult since the start of the COVID-19 outbreak, but Millennials in Kenya (90 percent compared to 70 percent globally) have found it hardest.
Given these challenges, it is unsurprising that 64 percent of Kenyans report an increase in their borrowing in the past month, the highest out of all markets surveyed. Kenyans are also the most likely (93 percent), globally, to say they want to be better at managing their finances.
Commenting on the poll, Standard Chartered Head of Retail Banking, Edith Chumba said that despite significant economic challenges caused by the high rate of unemployment in the country and exacerbated by the COVID-19 pandemic, Millennials were – as observed from the poll, more likely than the older generations to be in active pursuit of long-term goals.
“33 percent of Millennials in Kenya are saving for a major purchase such as a new car or home, compared to 23 percent of those over 45 whilst another 38 percent of Millennials are actively trying to invest better, compared to 31 percent of those over 45,” she said.
To meet these ambitions, Chumba added that, “Millennials in Kenya want to better track and budget their spending (60 per cent); 71 per cent want to alter their daily spending; and 21 per cent have started using a new money management or budgeting app since the pandemic began, with 81 percent of those who haven’t yet embraced these digital tools planning to do so in the next three years.”
Of those who have used new ways to manage their money since the start of COVID-19, most people globally have had a positive experience. While Kenya’s Millennials are 75 percent more likely than those over 45 to have started using a money management or budgeting app for the first time during COVID-19, it is actually those over 45 who report having the most positive experience using these tools – 85 percent compared to 81 percent of Millennials.
But this embrace of new technology to help manage money amid the current economic turmoil may be why Millennials are more confident than older generations that they can achieve their long-term financial goals.
One-third of Kenya’s Millennials (36 percent) are more confident than they were before the pandemic started.
In contrast, only 22 percent of those over 45 in Kenya feel more confident they’ll reach their financial goals, with those over 55 the least confident about achieving their financial goals since the COVID-19 outbreak began.
Meanwhile, across all generations, the pandemic has made people more careful with their saving and spending and less likely to splurge.
When asked what they would do, if given the equivalent of £1,000 by their Government with no strings attached, the most common responses globally were to use the money to pay off debt, cover day-to-day expenses or save for the long-term.
In Kenya, more than half (55 percent) of people would use the money to cover existing spending commitments such as housing, food, and transport, while only three percent would spend the money on a holiday, either foreign or within Kenya.