Despite misconceptions that they’re wasteful with their money.
Millennials prove that eating avocado toast has nothing to do with how well they save money.
Over half (57 percent) of millennials have a savings goal, compare to more than 42 percent of Gen Xers and baby boomers. And 67 percent make that goal every month, says a report from Bank of America.
“Young adults deserve more credit – from others and themselves – for the way they are handling their finances,” says Andrew Plepler, global head of environmental, social and governance at Bank of America. “They’re on par with or even better than older generations, which defies common stereotypes.”
Millennial money misconceptions
It seems like all the hype around millennials having poor money habits has gotten to them.
Three quarters of them believe they overspend on unnecessary luxuries. Who could blame them for feeling that way? The whole world has been criticizing this generation for years. Despite the amount of flak they get — and believe — they’ve still managed to save up some major cash over the past few years.
The amount of millennials who’ve saved over six figures has doubled since 2015. And the amount who have $15,000 or more has increased from 33 to 47 percent.
Most have also said if they were to receive a large sum of money they’d save it rather than spend it. Most gave that response to $5,000, and then the majority still agreed when the amount offered increased to $15,000, says a study from Revere Bank.
Millennials also seem to be better at budgeting to pay their credit cards off every month.
Over half (52 percent) of millennials paid their credit card balances in full every month, compared to 35 percent of all Americans with credit cards.
Granted, 35 percent of millennials have maxed out those credit cards, but 61 percent of all Americans have done that in their lifetimes also. On top of that, millennials have a noticeable fear of debt.
“Millennials’ fear of credit cards can be traced back to the financial crisis of 2008,” says a poll from LendEDU. “Growing up through the Great Recession, millennials have an inherent fear of taking on debt of any type, especially credit card debt.”
Which may explain why 41 percent of millennials fear using their credit cards.
Different outlook on finances
Millennials view handling money in their relationships differently than older generations.
Millennials are the generation most likely to fight over debt in their relationships. Although everyone fights over money, and it’s the leading cause of break ups in relationships — millennials feel it the worst.
One-in-five Americans report fighting with their significant other over debt.
Sixty-eight percent of millennials say their debt causes tension in their relationships, while 59 percent of Gen X and only 48 percent of baby boomers say the same.
“For Americans watching their debt levels rise while they struggle to make monthly payments, the situation can feel hopeless and have a serious impact on their quality of life,” says Greg Anton, CPA and chair of the AICPA’s Financial Literacy Commission. “Debt is taking a greater mental toll on millennials than older generations.”
Over a quarter (28 percent) of millennials say they’ve had separate finances in Bank of America’s report. Only 11 percent of Gen X and 13 percent of baby boomers did the same.
Millennials are also more likely to consider their finances before having children. With 30 percent saying money played a major role in deciding when to start a family, more than Gen X (22 percent) and baby boomers (nine percent).
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Article last modified on March 9, 2018. Published by Debt.com, LLC . Mobile users may also access the AMP Version: Millennials Really Do Save Better Than Older Generations - AMP.