Millennials tend to get a bad rap as a generation that neglects to save money. But a new report from Bank of America reveals that 73% of millennials are, in fact, saving money in some capacity.
But that's not all. Among those who are saving, 59% have more than $15,000 socked away. And an impressive 24% with savings have $100,000 or more to brag about.
What are millennials saving for?
Millennials are setting money aside for a number of key purposes:
- 75% are saving for retirement.
- 51% are building an emergency fund.
- 42% are saving for travel.
- 32% are trying to buy a home.
- 27% are saving for their child's education.
These are, largely, very worthwhile and important goals. We all need emergency savings to protect ourselves from unplanned expenses, whether they're home-, vehicle-, or illness-related. And we all need retirement savings to pay our bills later in life, since Social Security can't sustain the typical senior by itself.
Saving for education is also important, and perhaps no generation understands that better than millennials, who are notoriously plagued with student loans. And given that millennials have been slow to enter the housing market, it's nice to see that a large chunk are aiming to buy homes, perhaps in the not-so-distant future.
The only possible exception is travel, which clearly falls into a very different savings category than the other items listed above. But notice that the above percentages total more than 100, which means those surveyed by Bank of America were clearly allowed to indicate that they're saving for more than one thing. And if that's the case, there's certainly nothing wrong with saving for retirement while also setting funds aside to swing a big trip.
Catching up to your peers
The fact that 73% of millennials are saving money in some capacity is encouraging. At the same time, that statistic tells us that 27% of younger Americans are not saving money at present. If you fall into the latter camp, it's imperative that you start making lifestyle changes that allow to sock away funds for important purposes like retirement, emergencies, and, if you have kids, their education.
An easy way to improve on the savings front is to start following a budget. That way, you'll have a clear sense of where your money goes every month, and you'll be able to easily identify spending areas you can cut back on. And if you're not saving money because you really can't afford to, and you have no reasonable expenses to cut, then the answer could be a second job. The gig economy makes it easy to score an income boost in a flexible manner, whether it means driving for a rideshare company, doing some type of work online, or dog-sitting in your free time.
Despite the media's common portrayal of millennials as financially reckless beings, it's clear that many are on the right track. And if you're not, a few modest changes could put you on a much more solid path.