While a lot can be said about the wants and whims of millennials, a new study shows that a growing number of them are savers.
Financial services company Bank of America studied the financial habits of millennials, who they classified as adults between 24 and 41, to find out how much they were saving, what they were saving for and how successful they felt about achieving their financial goals.
One thing they learned from questioning the survey sample of 1,903 adults between the ages of 18 and 73: millennials are focused on retirement earlier than the generations that came before them.
Age 24 is when the average millennial starts saving for retirement, the survey found. In comparison, Generation X — those between the ages of 42 and 54 — started saving for retirement, on average, at 30, and baby boomers — those between 55 and 73 — started saving at 33.
Millennials are also focused on other goals, with 73% saving for life milestones and future goals — up 10 percentage points from 2018. Many of those who are saving have already made substantial progress, as 24% have $100,000 or more socked away, up from 16% in 2018. A majority — 59% — have saved $15,000 or more, up from 47% in 2018.
When it comes to millennials’ top savings goals:
- 75% are saving for retirement
- 51% are stocking money in an emergency fund
- 42% are putting money away to travel
- 32% are saving for a house
- 27% are putting money aside for a child’s education
Millennials are also improving their financial situations in other ways, as 39% saw an increase in their credit score in the past year, 29% increased their earning power by scoring a raise and 24% increasing their retirement contributions.
Financial challenges still remain
Despite the financial successes many millennials are experiencing, a majority still feel there is plenty of room for improvement. For example, 51% said they feel they are behind where they should be in their overall financial situations. Among millennials with household incomes of $100,000 or more, 39% said they feel they are behind.
Debt may be one of the biggest culprits for holding millennials back, as 76% said they have some type of debt, such as credit card debt (37%) and student loans (25%). One in six millennials reported owing $50,000 or more excluding mortgage debt.
On top of that, 43% believe their peers have had more career success and are earning higher salaries, while nearly three-fourths — 73% — said they are not optimistic about their financial futures and 33% said they worry often about money.
What would millennials need to feel financially secure? More than a quarter — 26% — said $1 million or more saved would make them feel secure. Among millennials with household incomes of $100,000 or more, 36% said $1 million was their ultimate goal for financial security.
When it comes to saving for retirement and other financial goals, it’s important to remember that success comes over time through consistent good habits and behaviors. The earlier you start, the better off you’ll be. Find out if you’re on track for retirement, and if you’re not, look for ways to boost your savings now vs. later.