In some sectors of the media, millennials are still being painted as avocado toast-loving, artisanal beer-swilling, economic non-contributors, but the fact is that they might be the most money-aware generation right now.
They hustle for their money
Fifty one percent say they have some form of side hustle. That’s compared to 38% of the general population.
Meanwhile, this isn’t just out of necessity. Only 38% of millennials polled said that they do side hustles to cover basic expenses. The other 62% merely do it for disposable income.
Granted, this might be so that they have any disposable income thanks to stagnant wages and high student loans, but the fact is that they’re still taking more financial initiative that other generations.
They’re saving for retirement
Once they have that money, they’re putting it to good use. Sixty percent of millennials are saving for retirement and the average balance is $26,000. While that’s not ideal — remember, millennials are up to 38 years old these days — it’s certainly better than the population at large.
As of 2016, 56% of Americans had less than $10,000 saved. And 55% of older Americans aren’t saving for retirement at all, though this article points out that this doesn’t count pension plans. Fourteen percent of the labor force alone has some form of government pension waiting for them. As such, that 55% figure may not be completely representative of older generations’ retirement realities — but it’s still a cause for concern.
And even if older Americans are more likely to have pensions — meaning they can afford to save less for retirement, while millennials are saving out of necessity– the point is that millennials are saving.
In fact, even 34% of those earning under $50,000 a year still reported socking away funds for retirement. That jumped to 64% for those earning between $50,000 to $100,000. And a whopping 77% of $100,000+ earners were putting away money for their golden years.
So millennials are looking toward the future, beyond their crippling student loans and larger-than-ever mortgages.
They talk money… on dates
A recent Bankrate study found that 35% of millennials would be comfortable discussing credit scores, debt and other money-related topics on the first date. That’s nearly double the 18% of older generations.
And 62% of millennials think a credit score could impact their interest in another date. (Only 51% of other generations felt the same way.) Plus 12% would have a problem if their dates made significantly more than they do. And 12% would have a problem with their partner making significantly less than they do. If that doesn’t sound like a lot, know it that it was 6% and 3% (respectively) for their older counterparts.
So clearly, a good chunk of millennials want to make sure they’re on the same page as their would-be partners and/or that they get a good view of any potential financial red flags well in advance of a relationship.
And that may be out of necessity.
The average millennial man’s salary is less than it was 40 years ago. The average women’s salaries have advanced — but only by about $4,000. That’s not enough to keep up with inflation.
Meanwhile, millennials are also likely to have worse credit scores thanks to increasing non-mortgage debt and delinquent student loan payments. It’s no wonder millennials want to make sure their dates are on the up-and-up financially!
They’re delaying milestones
And once they do partner up, they’re still being cautious.
Whether due to a lingering sense of economic insecurity from the Great Recession or because of their massive remaining student loan debt, millennials are delaying life milestones such as children and homeownership.
That’s not to say that every millennial is a renter. Plenty are homeowners now, but many delayed pulling the trigger on that and children.
Fifty six percent of people 18 to 29 reported putting off major milestones, such as kids, homeownership and even buying a car because of their student loan debt. And while those aren’t all millennials, the next oldest group (30 to 49), which also contained millennials, wasn’t much better at 53%.
In fact, homeownership has fallen to an all-time low, with only 36% of millennials owning a home by age 30. Comparatively, 48% of Baby Boomers had hit that mark before their third decade.
And the age of women having their first child is going up, with a significant increase in the number of 35+ year old women having their first birth.
What’s more, the overall birth rate is dropping. Whether this means more people are opting out of kids entirely or are simply delaying starting a family is unclear. But the slowdown is probably at least partly due to concerns over financial security.
So it seems as though millennials are trying to deal with their debt and/or be more financially secure in general before they take on more massive expenses like kids and mortgages. That’s the money-minded thing to do.
They’re careful with credit cards
Speaking of financial prudence, as of 2016 the percentage of Americans under 35 carrying credit card debt was down. Really down. Specifically, at its lowest level since 1989.
Of course, this could also be an indicator of having fewer credit cards. Millennials are renowned for owning and using fewer cards. Specifically just one in three reported carrying a credit card, preferring prepaid or debit cards (or simple cash) instead.
Still, millennials are also the travel hacker generation. In fact, when Chase Sapphire Reserve premiered, there were so many applications — the majority from millennials — that the company actually ran out of cards.
And 9.3 million new credit card accounts were opened by millennials in 2018 alone. In a survey, 46% of millennials said that they use their card at least once a week.
So clearly they aren’t neglecting credit cards. They’re just using plastic carefully, probably due to a a few factors.
First, they saw the financial devastation of the Great Recession. They watched friends and family struggling (and potentially failing) to deal with debt, including a fair amount of credit card debt. That’s bound to make them careful with their own use.
There’s also the Credit Card Accountability Responsibility and Disclosure Act, which meant that college-age kids couldn’t get credit cards without proof of income or a co-signer. This made it harder for kids to rack up debt in their college years, meaning they were less likely to build bad habits early on.
Then they got into the workforce to discover the precariousness of their finances thanks to high student loan payments paired with the aforementioned low salaries (when they could get those salaries at all). That’s going to make them cautious about spending, even on plastic.
Money savvy folks
All in all, I’d say millennials are hardly the financially irresponsible generation they’re made out to be by the media and snarky, sweeping stereotypes.
If anything, I’d argue that their high student loan payments — necessitated by the ridiculous increase in college costs — and struggles to find work during/in the aftermath of the Great Recession (not to mention the difficulty in getting decent-paying work now) have probably made them more financially aware than previous generations.
These are people who graduated college and were often hit with an immediate, ugly financial reality: even when they could get jobs, their salaries often weren’t enough (or were barely enough) to contend with the increasingly high cost of living and painfully steep student loan payments.
Nowadays, things do seem to be getting easier for them (as long as they don’t want to buy a reasonably priced house, of course). But just as people who lived through the Great Depression never quite trusted banks again, I think millennials were permanently scarred into a keen financial awareness of the financial precariousness of life. That’s leading to more caution when choosing partners, relying on plastic, looking at their golden years and living with only one income stream.
In short, it looks like millennials are and will probably long remain the most money-minded generation around.
Are you a millennial? Do you feel like you’re more aware of your finances than other generations? If you’re not a millennial, do you think they’re more or less responsible than other generations?