For all the trash-talk that is thrown at millennials about them being lazy, entitled and whatever else (probably responsible for both the world wars) it seems that it is the millennials who are leading the way in terms of responsible-saving practices. This news should be presented for an audience of thousands, in front of a thundering orchestral score, perhaps with a few bears chained up and roaring, so that we can really drive the anomalous point home: Millennials are actually being given credit for something good, for once!
The financial crisis of ’08
It turns out that the financial crisis was good for one thing: “The financial crisis came during millennials’ formative years,” said Bankrate.com’s chief financial analyst, Greg McBride. “It instilled in them smart habits we haven’t seen in a while.”
According to a recent Bankrate study, 29 percent of millennials are saving more than 10 percent of their incomes. This is slightly higher than the 28 percent of the rest of Americans, and a 5 percent raise for millennials from this time last year. Due to the unpredictable nature of millennials’ futures, they are trying to pull ahead and to save more.
“Millennials [still] have the biggest retirement savings burden in history, with longer lifespans, few pensions, uncertainty about Social Security and higher medical costs,” McBride said.
Darkness may still loom ahead
Although it is definitely a good sign that millennials are saving very well for their futures, it by no means that millennials are out of the woods. Although the Bankrate survey found that most young Americans were hitting their 5 percent annual savings benchmark, it just might not be enough. According to CNBC: “For younger workers, [5 percent] might only net out to between $1,000 or $2,000 — barely enough to cover a big medical bill.”
It does not mean that millennials are necessarily doomed. But they cannot get complacent either. They have to keep diligently saving their money. Jorge Padilla, a financial planner based in Miami, recommends doing everything with saving in mind: “When you get a raise, of say $5,000, take half of it and put it in your retirement fund, and enjoy only half of it right now. Or if you find a way to cut your cable bill, instead of spending that extra cash, set up an automatic monthly deposit to a high-yield savings account.”
To end on a positive note, despite feeling negatively about their predicament, the same Bankrate survey showed that millennials are feeling, overall, relatively financially secure. “About 43 percent of younger adults said they felt better than a year ago regarding their financial situation.” Only 30 percent of those aged 30-49, 21 percent of those aged 50 to 64 and 9 percent of those aged 65 and older had the same positive sentiment to share.
Have something to add to this story? Comment below or join the discussion on Facebook.
Header image: ShutterStock