They've increased their savings rate over two consecutive years.

Millennials catch a lot of flack for being sensitive little snowflakes, mooching off their parents. But,  when it comes to their money, they’re starting to buckle down and put more away in savings than their mom and dad’s generation.

Thirty-five percent of millennials say they saved more money last year than in 2016. That’s more than Generation X (25 percent) and baby boomers (22 percent), says a survey from Discover.

More impressive? While members of Generation X and baby boomers can attribute part of their savings increase to a pay raise from their job, millennials can’t.

“While our survey shows clear differences in the savings habits across generations, it is important to remember that consumers should save at all points in their lives,” says Heather Roche, VP at Discover. “People should start saving early in life and stay consistent in that practice.”

Are millennials just cheap, or afraid of investments?

Older generations are more likely to find ways to have their money earn more for them. Millennials seem to have fear, or lack knowledge, of tools their predecessors used to increase their finances — like the stock market and employer-sponsored savings plans such as a 401(k).

Most millennials were of working age when the Great Recession hit, giving the generation reason to fret the possibility of another in their lifetime. In turn, they’re more likely to just save up their cash.

According to a study from Hartford funds, 26 percent of millennials who have invested in the stock market have removed their investments to save. Almost half (46 percent) of millennials avoid the stock market entirely out of post-recession distrust.

“Americans are forgetting what it felt like during those challenging times of 2008-2011,” says John Diehl, senior VP at Hartford Funds. “Outside of millennials, Americans are overconfident. Index investing has been wonderful because all of the indexes have been up since March 2009, but when the market turns, investors need to be intentional about what they own and why.”

Similar results to Discover’s survey were found in a financial literacy survey conducted by the Harris Poll in 2017. Millennials (36 percent) were more likely than older generations (22 percent) to have saved more money in 2017 than 2016.

Millennials (19 percent) also marked they were more likely to save their money at home — socked away under a mattress or in a safe than those over 35 (10 percent).

Generation Xers and baby boomers (35 percent) say they’re more likely than millennials (27 percent) to have savings for the long-term like a 401(k) plan. Which makes sense since almost half of younger millennials, 18-24, don’t know what a 401(k) is.

Saving on their own terms

Millennials older than 25 aren’t as skeptical of a 401(k) and in fact most are very interested in all the employee-sponsored savings accounts have to offer, says a study from Charles Schwab Retirement Plan Services.

Eighty-six percent of millennials considered this type of retirement savings to be a “must-have” work benefit. Still, most millennials believe they’re best off relying on their own savings for when the time comes.

Sixty-six percent felt their self-created and self-funded savings account was the ideal way to fund their future in 20 years, says a Merrill Edge report from Bank of America.

Again Generation Xers felt a 401(k) to be the most efficient source for financial security and baby boomers felt most inclined to rely on their pension (54 percent) and Social Security (50 percent), options that may not be available for millennials when the time comes.

“As we observe how Americans look at their financial future, younger generations continue to rewrite the rules for the rest of us,” says Aron Levine, head of Merrill Edge. “By being more conservative with their money now, they’re looking to seize the financial future they desire in the long term.”

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Meet the Author

Joe Pye

Joe Pye

Associate editor

Pye is the associate editor of

Budgeting & Saving

401k, Baby Boomers, Gen X, millennials, save money

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Article last modified on July 5, 2018 Published by, LLC . Mobile users may also access the AMP Version: Millennials Are Out-Saving Older Generations - AMP.