Myth Busting Millennials and Money

Natalie Merrill
December 7, 2016

Many people have conjured up the idea that those individuals generationally classified as “millennials” spend their money on superfluous items and don’t practice the habit of saving their money enough.

But many people are mistaken.

A recent Bankrate “Financial Security Index” survey revealed that millennials are actually quite financially healthy, are more comfortable with their amount of savings and debt, and are more likely to save for both emergencies and retirement than their predecessors.1 These are individuals who witnessed the financial crisis and Great Recession when they were beginning their journeys of financial independence during the period of their lives that helped shape their views on finances and savings. Whether it’s because of fear or seeing firsthand how quickly the economy can take a turn for the worse, millennials tend to have a stronger inclination toward saving than prior generations.

Additionally, TD Ameritrade’s Millennials and Money Survey, which surveyed more than 1,000 millennials, found that 62 percent identify themselves as savers, and 80 percent have budgets.2 Individuals in this younger demographic aren’t only more concerned with saving than people often give them credit for, but they are also taking intentional actions to ensure they aren’t wasting money they will eventually need for the things in life that are more important to them.

Sure, there have been documented pieces of evidence that point to millennials having financial struggles and making questionable decisions with their money (e.g., student-loan debt piling up, stagnant wages, hesitance to invest in the markets, and excessive spending in their social lives and on material items). However, they have also proven that they are willing to learn how to be more financially savvy by creating budgets for themselves, setting savings goals, seeking help when making important financial decisions, and understanding that retirement is more likely to come when they’ve saved certain amounts of money rather than when they’ve reached a certain age.3

Millennials have come to accept that they can’t be completely rigid regarding when they plan to retire — their plans may need to adapt to a variety of factors that can potentially impact the amounts they have saved to accommodate the lifestyles they desire when they leave the workforce. This is in contrast to individuals of older generations who tend to have their minds set on retiring at the right age rather than when the savings amounts are more appropriate.

And what they’re saving for is not necessarily parallel with the reasons for which prior generations put away their money. A recent study by Jefferson National’s Advisor Authority of more than 1,400 advisors revealed that millennials have different concerns than Gen-Xers and baby boomers in terms of what is important to them concerning savings. According to the survey, the top three financial concerns millennials have are financing large expenses, financing their children’s educations and saving enough for the retirements they desire.4 The survey showed that Gen-Xers have similar concerns for their retirements and their children’s educations, but they also see managing taxes as a primary issue on which they should be focusing. Baby boomers, on the other hand, cite healthcare, protecting their assets and generating reliable income in their retirements as top priorities.

The Gen-Xers’ interest in making sure they put away enough money to help pay for their children’s educations is a practice that millennials have clearly taken note of and chosen to continue into their own lives for their own family members. And it’s millennials’ parents who have also helped them have at least some money kept away to escape as much student-loan debt as possible, though that continues to be a pressing stressor for this generation.

According to the most recent “How America Saves for College” survey conducted by Sallie Mae and the Ipsos research firm, parents are key contributors to their children’s savings: On average, millennial parents save an average of $20,155 for college expenses.5 While that amount won’t necessarily cover all four years of school at most colleges and universities, it helps in both helping to fund an education and also to instill the value of saving money into a younger generation that continues to show interest in making sure money that will be needed later in life is in place.

Whether it’s using tactics like finding roommates to split rent, using technology tools to keep track of their spending or applying a number of other savings habits, millennials are proving that they often make smarter financial decisions than they get credit for — and it might be time for other generations to start following suit.


1 Donna Fuscaldo, “Financial Security Index: Millennials increase their savings but financial security slips.” Bankrate, March 28, 2016.

2 “Millennials and Money Survey.” TD Ameritrade, August 2016.

3 Kelli B. Grant, “4 ways millennials are smarter about money than boomers.” CNBC, Aug. 10, 2016.

4 Lauren Greenberg, “How to keep up with client goals as they change.” Financial Planning, Nov. 28, 2016.

5 Steve Rosen, “Millennials planning, saving for college.” Herald & Review, Nov. 5, 2016.


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