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.