Mike Fanning: Personal finance from 2010 – 2020: It's been quite a decade -- Here's what may come next

As we enter the dawn of a new decade, perhaps the best way to anticipate what’s to come will be taking a deeper look at the seismic changes that impacted our bottom lines during the past decade:

In the world of finance, each decade has its own trademarks. The 1980s were renowned for deregulation, the end of inflation and the rise of Wall Street. The 1990s saw the savings and loans crisis and subsequent recession give way to tech-led record growth. And the 2000s were mired in fraud and a lack of governance starting with Enron and culminating with the sub-prime housing bubble burst and the onset of the Great Recession.

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Each era built the foundation for the next, establishing best practices while offering cautionary tales for what to avoid. With this decade drawing to a close, the defining financial qualities of the 2010s are an important reminder of how much has transformed – and what may lie ahead.

The last ten years have brought a slew of changes – and with them, significant disruption. A period that started at the peak of a worldwide recession is ending with the markets and unemployment at historic bests – but uncertainty remains.

As we enter the dawn of a new decade, perhaps the best way to anticipate what’s to come will be taking a deeper look at the seismic changes that impacted our bottom lines during the past decade:

MILLENNIALS, LOW EARNERS SPEND MORE ON LOTTERY TICKETS AND OTHER FINANCIAL VICES

Smart Phones Delivered Immediacy to Finances and Everything Else: The proliferation of mobile technology reimagined financial transactions. From turning your phone into your wallet to managing your portfolio on an iPad, the need for immediacy became a cornerstone of the financial world.

Looking ahead into 2020, we’ve only just scratched the surface of its impact on the financial sector. The next decade will be shaped by the institutions and individuals who figure out how to harness its potential.

Live Long and Prosper, Got a Bit Tougher: One of the biggest concerns among older and middle-aged Americans became the fear of outlasting their income. Retirees are no longer focused on hitting a retirement number – they are figuring out how to make their money last for over 30 years.

In 2020 and beyond, the biggest concern will center around how to pay off debt – especially student loan debt – in such a way that it doesn’t inhibit one’s ability to save to retire and help with debt reduction may become among the most important benefits employers can offer.

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The Savings Account of Today: The savings account was a cornerstone of long-term financial planning for the Greatest Generation. However, Boomers and Millennials who opted for the security of a savings account failed to come close to keeping pace with market investors thanks to a record run of historically low-interest rates. 

Despite some slight upward ticks in interest rates, the traditional savings account is unlikely to become the product of choice outside of accessing immediate cash for emergencies and short-term needs. Over the next ten years, we expect increased consumer interest in safety nets that help protect against financial downsides alongside the ability to access the upsides.

Trust the Masses: In the last ten years, crowdsourced expertise started to challenge traditional one-on-one financial expert consultations.  Many people now check online sources for how to spend their money, the same way they go to Yelp to decide what new restaurant to check out or Rotten Tomatoes for the next movie they’ll see. And, the workplace has emerged as an informed resource for financial expertise, with consumers increasingly looking to the business community as a trusted source.

The next decade may see a rejection of social media as a reliable source for expert advice, and rightly so, as individuals shift to a higher level of scrutiny of the resources they place their trust in.

In reflection, the 2010s started off at the lowest of lows, and for those paying close attention to the ride, many lessons have been gained If this was the decade that “re-made” us, are the 2020s poised to be the decade that “re-pays” us? Perhaps those who best understand history will be the best positioned to benefit from it.

Mike Fanning, is head of MassMutual U.S. with Massachusetts Mutual Life Insurance Company and the father of four Millennials.

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