How Do Millennials’ Savings Habits Compare to Other Generations?
Every month, it seems, new research comes out suggesting that Millennials are doing better at saving than their older counterparts. But are they really?The latest results
come from Discover, which found that Millennials apparently are outperforming older generations as a whole when it comes to saving for their future. According to their national study of 2,205 people, 81% of Millennials are currently saving in some capacity, compared to 74% of Generation Xers and 77% of Baby Boomers.
Moreover, a higher percentage of Millennials compared to their counterparts report that they saved more in 2017 than in the prior year, albeit for differing reasons. Thirty-five percent of Millennials say they saved more in 2017 than in 2016, compared to 25% of Generation Xers and 22% of Baby Boomers who said the same.
But what were the reasons for doing so? Forty percent of Millennials attributed the increase in their savings level to a better understanding of how to set up a budget, followed by 26% who said they eliminated a recurring luxury expense.
For their part, 32% of Gen Xers attributed their increase to a rise in pay, followed by 26% who either cut a recurring expense or have a better understanding of how to set up a budget. Similarly, 20% of Baby Boomers attribute their increase to a raise in pay, with the same amount saying they have a better understanding of how to set up a budget or have cut a recurring expense.
Not surprisingly, the survey found that generational differences exist even when it comes to developing cost-saving strategies. For instance, Boomers are more likely than Gen Xers or Millennials to cook at home and incorporate household efficiencies, while Millennials are more likely to take public transportation and Gen Xers are more likely to use coupons.
The survey also found that 77% of Americans are currently saving in some capacity, with nearly half (48%) of those doing so through multiple resources. According to the findings, 41% of those who use a savings account also use a checking account to save. Similarly, 34% of those who use a savings account also use a retirement account.
Meanwhile, nearly one-fourth of Americans are not saving and many don’t know why. When asked why they are not saving, 35% of respondents say a lack of income is the main reason. Yet, 17% of non-savers say they do not have a reason for why they are not saving. An additional 17% cited bills needing to be paid, while 10% cited too many debts as reasons for not saving. And 35% of those who are not saving say they don’t know which product or type of account they would use to save if they were to start.
The total sample size of the online survey was 2,205 adults, with fieldwork undertaken Sept. 6-7, 2017.