The U.S. economy has been expanding for roughly a decade, and unemployment is at its lowest level in nearly 50 years. But despite the fact that millennials have entered the workforce during one of the biggest economic booms in history, a new survey by Finty found that 40% of millennials expect they will have a lower quality of life than their parents.
The financial survey revealed several insights into how millennials are handling their spending and saving.
Of the millennials surveyed, more than 47% reported saving 5% or less of their monthly paycheck. An emergency or rainy day fund (27.6%) and down payment on a house (17.6%) were the top two reported reasons for saving.
Unfortunately, many millennials don’t seem to be making much progress on the savings front. More than 44% of respondents said they currently have $500 or less in savings. At the same time, 17% of millennials report having more than $5,000 in credit card debt.
For now, millennials seem to be getting along just fine with little or no savings given the booming economy.
Yet if millennials lose their jobs during an economic downturn, things could get ugly fast. More than 36% of millennials surveyed said their savings couldn’t cover their current cost of living for more than a month if they lose their job.
Many experts recommend keeping at least six months of living expenses available for emergencies.
One of the common criticisms of the millennial generation is that they rely heavily on assistance from their parents, and the survey suggests there could be some truth to that idea. Nearly half (47.8%) of millennials reported receiving some level of financial support from their parents.
But perhaps the most troubling result from the survey is that millennials don’t seem to have much financial confidence when it comes to the future.
Just 60.5% of those surveyed said they expect to have a higher quality of life than their parents, whereas 39.5% expect to have a worse quality of life than the previous generation.
The upper end of the millennial age range is now 38 years old, so millennials that do not have a grip on their finances need to start making it a priority as soon as possible. Paying off high-interest credit card debt and setting and sticking to a monthly spending budget is an excellent place to start.
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