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Are Millennials too Reliant on Technology to Fund Their Future? Having the right technological tools is one thing, knowing how to use them is something else altogether.

By Jennifer Fitzgerald

entrepreneur daily

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Free flow of information has been one of the major tenets of the Internet since we were all dialing up with AOL discs we grabbed from Circuit City counters. Now our job for 2016 is to make sure we keep that spread of education going in the financial sector. Giving people tools is great. Teaching them how to use them and how they work is even better.

Let's face it -- millennials are in for a tough road ahead.

Wages have been stagnant for years. Student loan debts are at an all time high: the amount of federal student loans in default has grown 25 percent over the past two years, standing now at $115 billion. Millennials are taking longer to hit the "milestones" of adulthood: young people are waiting longer to get married, buy a home, and have kids than their own parents did.

It's not like millennials are necessarily facing challenges that other groups aren't. After all, Baby Boomers aren't getting huge raises every year. But millennials are coming into the workforce fresh out of a recession and without any previous knowledge or experience to really know what they're doing.

Related: How to Motivate Millennials, By Millennials

What they do have is more technology at their fingertips than ever. But is access to online financial tools making millennials any better with money?

Quick, what's the most-used app on your phone? Facebook? Snapchat? What if it was Mint, or any one of these daily budgeting apps? Or Acorns, which automatically invests your spare change? Or Digit? Maybe some day it will be. Thanks to the ubiquity of mobile, millennials have grown up with the ability to track their finances at any time.

Or ignore them all the time.

There's no need to know what you're investing in when money can be pulled automatically in discreet-enough amounts that it's practically unnoticeable. Paychecks are deposited into a bank account and divvied up to pay monthly Netflix bills and other expenses.

Even tech that isn't explicitly finance-related is playing a role in this. Uber is great because it's so easy to use. You don't have to pull out a credit card, nevermind real, physical money. You can take a ride without ever knowing how much it costs.

It's a trend that's leading to millennials being unattentive with their money at worst and irresponsible with it at best. That's right: we're making money too easy to handle.

Related: 5 Ways Millennials Are Like No Generation Before Them

A majority of millennials have less than $1,000 in savings. Doesn't sound great, does it? Millennials are saving more than almost every other demographic, but just because the saving rates of other groups are bad doesn't mean that millennial saving is good it's just not as bad. This could be a result of the tools they're using; putting money away automatically -- doesn't help you learn the nuances of investing, but you end up with money saved either way.

There's evidence that millennials are undereducated about insurance, too. According to a Life Happens survey, younger consumers are the most likely group to overestimate the cost of a 20-year term life insurance policy. Perhaps not coincidentally, they're also the most underinsured demographic, with only 30 percent of 25 year olds having life insurance and just over half of 25 to 44 year olds having it, compared to around two-thirds of older demographics. And when you consider the fact that the average cost of a $500,000, 20-year term life insurance policy for a 30 year old non-smoking male is only around $27 a month, that's a lot of protection for little cost that's being missed because of some unnecessary misinformation.

What's the fallback for this lack of protection? More technology. Look at crowdfunding site GoFundMe -- three of the top eight most common funding categories are Medical, Emergencies, and Memorials (covering things like burials and other final expenses). Clearly there are some situations that can't be accounted for, but most of these categories are afforded some level of protection with insurance. The proper level of insurance coverage and a better financial foundation means fewer people would have to rely on the generosity of Internet strangers to pay their bills.

Of course, every demographic overestimates the cost of life insurance, Americans as a whole have a lot of debt and few groups are particularly good with their money. And millennials are far from doomed. In fact, they might be in the best position to improve their finances -- as long as they're given the right tools.

Related: Millennials 'Are Great Problems to Have'

At the risk of veering toward "get off my lawn" territory, staying on top of your money used to be a lot more involved back in the day. You had to crunch numbers, double-check transactions and do math. Was it hard work and tedious and confusing to balance a checkbook? Absolutely and those are the problems that technology should help solve. But in the process we've gotten rid of habits that made us understand what we were doing with our money and where it was going. We had to be diligent about those things. No one else was going to do it for us (and certainly not our phones). If we're going to eliminate financial barriers, we need to figure out a way to make access to education and resources just as seamless. The good news is it's already starting.

Part of credit card refinancer Payoff's platform is tools like its Member Advocates, Lift budgeting program and resource center, so its users can walk away with more than just a loan. TradeKing has a dedicated Education Center. And PolicyGenius has how-to guides to teach consumers what to look for when insurance shopping. Buying insurance shouldn't be hard and learning about it shouldn't be, either.

Free flow of information has been one of the major tenets of the Internet since we were all dialing up with AOL discs we grabbed from Circuit City counters. Now our job for 2016 is to make sure we keep that spread of education going in the financial sector. Giving people tools is great. Teaching them how to use them and how they work is even better.

Jennifer Fitzgerald

CEO and Co-Founder of Policygenius

Jennifer Fitzgerald is the CEO and co-founder of Policygenius, the nation’s leading online insurance marketplace. She is the Ernst and Young Entrepreneur of the Year New York 2019 and one of Fast Company’s 100 Most Creative People in Business for 2018. Before starting Policygenius in 2014, she and her co-founder, Francois de Lame, were management consultants at McKinsey & Company.

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