Is It Time to Short the Wedding Dress Industry?
May 9, 2016
Have you been to a wedding lately? This year The Weekly has had a focus on the living, spending, and working habits of the Millennial generation. This generation, broadly defined as the children of the Baby Boomers, walks to the beat of its own drum. As June weddings approach, we decided to look at how (or how not) the Millennials are looking at marriage. It seems that this generation’s attitude to marriage can best be summarized as “there is no hurry”.
It is becoming evident that Millennials are taking longer to graduate from college, find traditional work, buy a home, and marry. As a result this generation is setting a new standard of pacing through life. The current median age for Millennials getting married is 27 for women, and 29 for men. For Baby Boomers the marriage rate was 91 percent but the Urban Institute projects that for Millennials it might be only 70%. The Pew Research Center recently stated that as many as 25% of Millennials may never marry. The single most cited reason for delaying, or putting off, marriage is the feeling that they lack a solid financial foundation.
The research on this topic also points to a correlation between lower educational levels and the length of delay before getting married. This might also partially explain why personal finances play such an import role in the timing of marriage. Lower income level jobs seem to weigh heavily on people’s decision to marry and make long term commitments.
By contrast Baby Boomers were mostly married by the age of 25. Moreover Baby Boomers had much less debt, and, in particular, did not enter the workforce with anything like the level of student loan debt being carried by Millennials.
Those Millennials that do choose to marry come into the relationship in ways never seen before. The credit tracking firm Experian recently reported that 33% of all newlyweds are surprised by the real financial situation of their spouse. 31% of newlywed couples never share their personal debt levels with their spouse. This is somewhat puzzling given that debt and debt management are major issues for Millennials. Currently only 40% of married Millennial couples knew their partners credit score at the time of the wedding!
It is natural for society to change over the generations so it should be no surprise that the approach to, and even the definition of marriage will evolve. The latest statistics on the views of Millennials towards marriage suggest that attitudes are changing faster than ever before. The opinions and decisions of this generation will make investing even more challenging and opportunistic going forward. Investors will need to learn what this group is doing. We cannot just assume that past behaviors will continue into the future. Perhaps it is time to “Short the Wedding Dress Industry”.