Why Millennials are super savers

Millennials are saving more than any other age group, and Americans as a whole are saving more than they have in the past, according to a new study.

|
Andre Penner/AP/File
A woman uses her cell phone in São Paulo, Brazil (Dec. 17, 2015). Contrary to popular belief, Millennials are saving more and spending less than any other age group.

Add another to the long list of stereotypes about Millennials: they're responsible with their cash.

According to a study released Monday by Bankrate.com, Millennials are saving more than any other age group. The Bankrate survey indicates that 62 percent of Millennials will save more than 5 percent of their income this year, an increase from 42 percent in 2015. And 29 percent of Millennials are saving more than 10 percent of their income, up from 22 percent last year. 

"The findings are consistent with what we see in other surveys - Millennials, or adults age 35 and under, are not the consumers that their predecessor generations have been,” Bankrate.com chief financial analyst Greg McBride explains in an interview with The Christian Science Monitor.

Not only are Millennials saving more, but they also reported better financial health than other groups in the survey, conducted by Princeton Data Source on Bankrate’s behalf with a sample of 1,000 adults in the continental United States. Half of the interviews were conducted by landline, and the other half were conducted via cell phone, including about 300 people who didn’t have a landline.

Despite having come of age during the Great Recession, today Millennials are feeling more confident about their savings, debt levels, and overall financial well-being than in years prior. Mr. McBride tells The Monitor that the financial crisis  that kicked into high gear eight years ago has had a significant impact on Millennials' financial patterns. 

“[They have] greater hesitancy towards incurring debt, less of a consumption focus, and a greater inclination towards saving. The other thing at play is that Millennials recognize that their retirement savings burden is going to be on their shoulders... more so than for previous generations, because of Social Security and longer lifespans," McBride says. 

Still, Millennials aren't the only ones examining budgets and tightening their wallets. Across the board, many Americans are choosing to put away more of their income in savings. Overall, the percentage  of Americans who say that they’re saving more than 10 percent of their income has jumped from 24 to 28 percent this year - a trend seen at every income level. Twenty-seven percent of Americans who make between $30,000 and $50,000 annually are putting away more than 10 percent of their income in savings, as are 24 percent of those earning between $50,000 and $75,000 per year.

The Bankrate study comes as data on the whole indicates that consumers are still reining in spending several years after the end of the Great Recession. Despite modest wage and salary increases this year, and low fuel prices, consumer spending continues to be extremely sluggish. The economy grew at an annual rate of just 0.7 percent during the final three months of 2015, and has barely picked up since then. Consumer spending, which accounts for over two-thirds of all economic activity, edged up by a modest 0.2 percent in February when adjusted for inflation. Consumer spending rose just 0.1 percent for the third straight month in February, according to new data released Monday by the Commerce Department.     

You've read  of  free articles. Subscribe to continue.
Real news can be honest, hopeful, credible, constructive.
What is the Monitor difference? Tackling the tough headlines – with humanity. Listening to sources – with respect. Seeing the story that others are missing by reporting what so often gets overlooked: the values that connect us. That’s Monitor reporting – news that changes how you see the world.

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to CSMonitor.com.

QR Code to Why Millennials are super savers
Read this article in
https://www.csmonitor.com/Business/new-economy/2016/0328/Why-Millennials-are-super-savers
QR Code to Subscription page
Start your subscription today
https://www.csmonitor.com/subscribe