Millennials can get a bad rap for how they handle money, but according to a new study, young people are beginning to stash away money for retirement earlier than previous generations.
Published on Thursday, Bank of America’s 2020 Better Money Habits Millennial Report found that millennials — Americans between the ages of 24 and 41 — are beginning to save at age 24, far earlier than the ages Gen X (30) and Baby Boomers (33) began planning for retirement.
Nearly three in four millennials said they were putting away money, a 10-percentage-point increase from two years ago. Roughly a quarter of millennials have stored away $100,000, up from 8 percent in 2015 and 16 percent in 2018.
Young Americans have also adopted smarter financial practices: 74 percent of respondents said they check their account balances; 55 percent track their expenses; 46 percent pay their credit card bill in full and 31 percent plan a budget (though only 34 percent of those individuals said they stick to it).
Still, millennials still fret about financial security and worry about substantial debt levels and long-term savings goals. (Not including home loans, one in six millennials owes $50,000 or more in debt). Seventy-five percent of millennials said they weren’t confident about their money situation, and 73 percent worried about their future.
These were the top stressors for millennials:
- Not saving enough (44 percent)
- Planning and saving for retirement (38 percent)
- Not making a high enough salary (32 percent)
- Living beyond my means (26 percent)
- Credit card debt (25 percent)
- Saving for my child’s education (20 percent)
- Not being able to afford a home (20 percent)
As a result, a staggering 90 percent of millennials said they will make a sacrifice in order to achieve their financial goals, ranging from smaller lifestyle changes to major career trade-offs.
At least 70 percent of respondents said they were willing to eat out less, while 33 percent said they would stay in an unfulfilling job in order to pay the bills. Forty-four percent would take on a side job, while 33 percent would eliminate vacations.
The survey included 1,903 respondents, ages 18 to 73, and was conducted online between Sept. 12 and Sept. 12.
