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Millennials spend beyond their means.

Millennials binge on debt.

In general, millennials handle their finances irresponsibly.

These are some of the stereotypical images of millennials that popular culture, financial planners and fintech firms have led us to believe. And yet, there is very little evidence to support such stereotypes.

While millennials are indeed more indebted than either pre-millennials or post-millennials, the levels of indebtedness are not alarmingly high, shows fresh data from the latest round of the YouGov-Mint Millennial Survey.

The survey also shows that it is the richer lot among the millennials who is likely to be indebted, busting the myth of the irresponsible millennial.

The survey conducted between mid-September and mid-October 2019 shows that millennials are more likely to take loans compared to other age groups.

Given that they have been working for more years than post-millennials, and have a much longer working life than pre-millennials, the debt bulge among millennials appears normal.

Millennials refer to those who have attained adulthood in the early 21st century, and grew up at a time when the world increasingly became digitally connected.

In this analysis, millennials refer to those born between 1981 and 1996 (aged 23-38 years now). Those born after 1996 (aged 22 years or below) are referred to as the post-millennials or Gen Z. The rest (39 years and above) have been classified as pre-millennials. Together, millennials and post-millennials account for roughly half of India’s adult population.

Among millennials, those earning higher incomes tend to have more loans. Bigger-sized loans (more than 10 lakh) are also more concentrated among higher-income brackets, shows the data.

Across age groups, the more affluent are more likely to be more indebted. Levels of indebtedness are also high among professionals with higher technical degrees (MBA/MD/PhD).

The third round of the YouGov-Mint Millennial Survey was conducted online and solicited the views of 9,324 respondents across 180 towns and cities. Of these, 4,908 were millennials, 1,888 pre-millennials and 2,528 post-millennials.

The YouGov-Mint Millennial Surveys aim to examine the attitudes and outlook of the country’s digital natives.

The survey asked respondents if they felt they were spending within their means, or were going beyond their budget.

A higher proportion of millennials said they were spending within their means compared to other age groups. And, across age groups, those who said they spend within their means are more likely to be indebted compared to others.

Compared to the other age groups, millennials are more likely to take loans to purchase consumer durables (or gadgets) and for social obligations (to fund wedding, etc.), shows the survey.

Among pre-millennials, home loans are the biggest reason for indebtedness and, among post-millennials, education loans are the biggest reason for indebtedness. Among both millennials and pre-millennials, a significant proportion seem to have taken loans to meet medical emergencies, suggesting the lack of adequate medical cover.

But, how does attitude towards debt vary across age groups?

The results from the YouGov-Mint Millennial Survey suggest mixed attitudes across generations.

Compared to other age groups, a higher proportion of post-millennials said they won’t ever take any loan. But they also seem to have the most relaxed attitude towards debt, with a lower share of post-millennial respondents saying that they found the idea of being in debt as stressful. A large chunk of pre-millennials felt that being in debt was stressful.

A larger share of millennials felt that taking personal loans was normal, and very few said that they would never take a loan.

As with everything else, attitudes towards debt vary across income classes, with richer respondents more comfortable in taking loans.

The data shows that those who expect their incomes to rise and those who expect to be financially better off are more likely to take bigger loans compared to those who expect their incomes to stagnate or expect to be financially worse off in the years to come. This trend holds for millennials, as well as for other age groups.

Overall, the data does not suggest any alarming level of indebtedness among millennials. While millennials take more loans and for a wider variety of reasons than others, it is typically the richer millennial rather than the poorer millennial who is likely to take such loans. And, when it comes to attitudes towards debt, millennials appear to be fairly balanced compared to other age groups.

This is the third of a five-part series on how millennials are coping with the economic slowdown.

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