Money Management among Young Thai Millennials
How 22-25 year-old Thais in Bangkok manage their money by setting goals, making mistakes, and family nurturing.
Words by Tip Janvipas, Gift Supatratongo, Sawyer J. Lahr
Quarter Three, 2017
Young Thai Millennials, ages 22-25 are just starting to earn money for the first time, still living with family, some still receiving financial support from family, and others are just beginning to have their own recurring bills. They lack the information, understanding and financial resources to invest their money and therefore shy away from investing unless with guidance. Taxes are also a difficult subject to understand for young Thai Millennials. They use cash to pay for most expenses and therefore record their expenses by rounding up and keeping a loose record of what they've spent. A positive balance in a bank account is an indicator that they are managing their money well and an increasing balance is like a reward for not spending too much.
In late 2016, we designed a research study in preparation for a workshop at the Creative Bangkok conference organized by Bangkok University, the Institute for Knowledge Management and the new Masters in Innovation Management Degree. Our research team asked six young Thais in Bangkok 25 years old and younger to track their expenses for one week (not something they all do as a rule) and then join us for in-depth interviews to talk about their experience with learning to manage money.We found that young Thai Millennials are motivated to learn money management by setting goals, making mistakes and familial nurturing:
Goals are a reason to save over the short or long term. They can be aspirational goals like paying for graduate school and buying designer clothes or more practical goals related to concern about the future like retirement, health, and unexpected accidents. Investing is one way Millennials move toward achieving those financial goals, but lack of knowledge and guidance about how to invest is a key factor in deterring young millennials from investing.
"A friend of mine from university saved a lot of money and finally can get a nose job with her own money. This surprised me. At that time, I started to think about saving money more when I was in university" - Pair (24)
Mistakes are a compelling and personal motivation to save money. By making their own financial mistakes or seeing family members make mistakes with money, young Thai Millennials learn to think about their finances differently and begin to take their finances more seriously. Spending too much or spending frivolously on bad habits like going out to eat or clothes shopping is a learning moment for young Thai Millennials about how to be more frugal and prioritize how they spend their money.
"I follow one web board which is about credit card debt which has a lot of case studies about how people have a lot of credit card debt. This make me not want to have a credit card" - Aong (24)
Nurturing from family members is an especially helpful motivation to get Millennials to save with the support of their parents. Even though young Thai people in Bangkok often live with their family until late in their 20s, they still have to learn to manage their own money even with an allowance. This support puts young Thai Millennials in a much better position while they complete school, start job searching, and earning their own money. However, those without support from family, and for instance, are living away from their hometown, rely on themselves and send money home to family members when possible.
"I manage my money into three groups: one is for my accommdation expenses or money that I own my friend, another is for my daily expenses and still another is "in case" money to give my parents just in case" - Nant (25)
The situation for young Millennials is one of transition into adulthood and growing up which means that they need motivation to start managing their money like adults. So when thinking about potential offerings for this group of consumers, businesses might think first about how your organization will motivate and guide young Millennials to the solutions which best help them reach their goals and learn important lessons about managing their money from basic budgeting of expenses to saving, investing, and tax planning.
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