When millennials are mentioned in the news, it's generally something to do with the financial challenges facing the generation, such as rising student loan debt, or high unemployment for recent graduates.

Source: Wikipedia.

However, situations like these may cause the millennials to develop into the most financially smart generation since those Americans who lived through the great depression. According to a recent survey by Bank of America and USA TODAY, this looks to be the case -- at least so far.

There is just one major problem -- millennials aren't investing.

They spend and save money responsibly
According to the survey, 74% of millennials worry about their financial situation, which is leading to the development of good financial habits. Just like the children of the Great Depression, it seems millennials don't take employment and money for granted and want to live within their means.

For instance, about half of millennials pay off their credit cards in full every single month. And 35% only carry cash in order to limit the amount of money they spend.

Turns out millennials are pretty good savers, too. In fact, 70% of millennials with full-time jobs started saving for retirement before they turned 22 years of age. In contrast, Generation-Xers and Baby Boomers weren't nearly as responsible, starting at 27 and 35 years old on average, respectively.

Most are financially independent
Also, despite the perceptions in the media, the majority of millennials are able to achieve financial independence, especially those who went to college.

Less than one-fifth of millennials still live at home, and just 15% say they receive rent help from their parents. While this is relatively high compared to previous generations, the typical millennial is not living with mom and dad, like some of the headlines might lead you to believe.

Of the millennials who have a college degree, the vast majority (83%) say that they have good financial habits, and 73% say they are completely financially independent. These figures are lower for those millennials without a degree, but the majority are still financially independent.

If we could only get them to invest well
One similarity to the depression-era Americans is a distrust of the stock market. A Wells Fargo study found that 80% of millennials say the recession taught them the importance of saving, but they are very hesitant to take on much risk.

Another study found that millennials put 75% of their retirement savings in cash or fixed-income assets, such as bonds. This is bad for two reasons.

First of all, savings kept in cash equivalents such as CDs will actually lose money over time, when accounting for inflation. The most you can reasonably expect to earn from CDs is about 2% per year, which might barely keep up with inflation, but is not likely to do so in the long run.

Keeping money in a savings account is even worse. These accounts pay practically no interest, so your money loses value at the rate of inflation. For example, if you put $1,000 in a savings account, and the average annual inflation rate in the next several decades is 2% (a very conservative estimate), your money will only be worth about $530 in today's dollars after 30 years.

The other reason this could end badly for millennials is that fixed-income investments such as bonds can be awful long-term investments when interest rates are extremely low, which they currently are. Not only do these pay low returns, but the value of the bonds themselves will fall if rates rise going forward.

For example, a 30-year Treasury bond currently pays a little less than 3% per year. So, if we buy $10,000 worth of 30-year Treasuries today, we can expect annual income of $300. However, if the market rate rises to 4%, investors will expect to receive that return on their investment. Your bonds that pay $300 per year would only be worth roughly $7,500.

The market will go up and down, and then up again
The biggest reason for millennial's negative perception of stocks is that they entered adult life at exactly the wrong time. The challenge is to make them see that over time, stocks are still the best asset class to invest in.

Even someone who bought S&P 500 index funds at the pre-crash peak in 2007 would be sitting on a total return of about 57% today.

^SPXTR Chart

So, while it seems like millennials are developing sound habits when it comes to saving and spending money, their investing strategy could be the last piece of the puzzle to making millennials the most financially successful generation of all.

Matthew Frankel owns shares of Bank of America. The Motley Fool recommends Bank of America and Wells Fargo. The Motley Fool owns shares of Bank of America and Wells Fargo. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.