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Millennial Savings

Since the Great Recession, there has been a lot of focus in the news around how much people are able to save. Almost 62 percent of Americans have less than $1,000 in their savings accounts, and 21 percent don’t even have a savings account. However, the next generation seems to be faring a lot better than expected when it comes to saving. In fact, they’re even outperforming older generations.

Another study found that 81 percent of Millennials are currently saving in some capacity. A very respectable number, considering only 77 percent of Baby Boomers are setting aside funds for later years.

Shockingly, GenX is at just 74 percent when it comes to how many of them are saving for their future. 26 percent of those surveyed said that they had stopped an unnecessary luxury expense to be able to save. It’s not just stopping eating out or getting your nails done at a nail bar that will put you in a good position to set money aside regularly. You have to budget.

When the Millennials were asked what they were able to attribute their savings to, 40 percent responded that they were better able to understand a budget — a high number considering the national average. Only 32 percent of Americans prepare a detailed household budget. That means around two-thirds of all the households in the nation have no real idea of how much they spend each month or how much they’re able to save. Getting your budget right is essential if you want to be able to save regularly and set enough aside for your future.

Millennials are not just setting money aside; they’re also spending in different ways. Just one out of three Millennials carries plastic. The 18 to 24 age bracket was found to prefer paying by cash. according to a Fed survey. Millennials are breaking the habit of spending money they do not actually have. If they do carry a card, it usually tends to be a prepaid or debit card.

Overall the younger generation of Americans seems to have an understanding of saving that not just rivals their elders, but leaves some of them in the dust. Perhaps the future is in safer hands than we think

 

IMPORTANT DISCLOSURES

Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. This material does not constitute an offer or recommendation to buy or sell securities and should not be considered in connection with the purchase or sale of securities.

To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. 

Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.

These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable– we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

David Lerner Associates does not provide tax or legal advice. The information presented here is not specific to any individual's personal circumstances. Member FINRA & SIPC

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