Millennials, the young generation that’s often written off as lazy, irresponsible, selfie-obsessed narcissists, who talk in hashtags and emojis, dwell in their parents’ basements and blow their money on Uber and microbrews, are actually saving more than almost every other age group.
Who knew? ¯\_(ツ)_/¯
Overall, Americans are saving more money than they were last year. But a new survey by the Consumer Federation of America found millennials—the second largest generation in history -- are making the most progress, with the exception of the 45 to 54 year-old cohort who tend to have more money to save anyway.
According to the survey at least 56 percent of millennials reported saving at least 5 percent of their income last year, compared to 52 percent of Americans overall, Bloomberg first noted.
The percentage of millennials saving their money is 6 percent higher than last year—making them the second fastest growing group of people to report saving at least 5 percent of their money over the past year.
About 47 percent of these young people had a savings plan last year, compared to 43 percent in 2013. Likewise, the number of millennials with emergency funds jumped to 64 percent from 53 percent over the same time period. That’s in line with all groups that increasingly set up savings plans and emergency funds just in case.
“Making a savings plan focuses one’s attention on how one spends and saves their income,” Dallas Salisbury, president and CEO of the Employee Benefit Research Institute, said in a statement. “Those with a savings plan tend to be more careful spending money, less willing to borrow unwisely and more likely to save conscientiously.”
What’s more surprising is that the generation seems to be leading the pack when it comes to making progress on their savings behavior, despite facing low wages and high unemployment rates. Millennials haven’t had it easy when it comes to financial issues, as many graduated in the wake of the Great Recession when unemployment among this cohort reached 17 percent.
Since then, the unemployment rate has ticked down to 7.8 percent (compared to the national rate of 5.6 percent), but many still struggle to find jobs—especially good paying jobs.
A report by Harvard's Joint Center for Housing Studies found that the number of young adults making less than $25,000 has skyrocketed by six million, while the number of young adults making more than $25,000 has dropped by almost two million.
At the same time, the amount of student debt this group is shouldering is astronomical. According to the Project on Student Debt, seven in 10 (or 69 percent) of graduating college seniors at both public and private nonprofit institutions had student loans—averaging $28,4000 in loans in 2013.
The combination of lower wages and high student debt has concerned many economists who worry about the future of the housing market—as fewer young people have the money to become homeowners.
Derek Thompson at The Atlantic explained, “More years of school + more student debt + lower starting salaries + a nervous housing market + stricter rules for new home-buyers = no new home-buyers.”
Meanwhile, as the economy improves, and they start getting better jobs, some wonder how millennials will deal with their money in the future. Fed Chair Janet Yellen told Congress on Tuesday that for, now millennials’ money behavior is a complete mystery.
“We're just beginning to understand how the millennials are behaving," she said. "They're certainly waiting longer to buy houses, to get married. They have a lot of student debt. They seem quite worried about housing as an investment. They've had a tough time in the job market. Exactly as the economy strengthens, I expect more of them to form households of their own and buy homes. But we've yet to really see how this is going to affect that generation."
Well, at least we know they’re saving.
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