Millennials (ages 24-41) are saving more for their futures than ever before, according to the Bank of America Better Money Habits® Millennial Report. One in four who are saving has stocked away at least $100,000 – up from 16 percent in 2018. However, despite financial successes, more than half of all millennials say they feel behind financially compared to where they thought they would be, and another 33 percent feel financially behind their peers.
When it comes to saving and financial habits, millennials are “getting it right”
- Seventy-three percent are saving for life milestones and future goals, a 10 percentage point increase compared to 2018. Three-quarters are saving for retirement, while 51 percent are building an emergency fund and 42 percent are saving to travel.
- On average, millennials saving for retirement started building their nest egg at age 24 – earlier than Gen X (30 years old) and baby boomers (33 years old).
- Over the past year, 39 percent of millennials boosted their credit score, 29 percent secured a raise and 24 percent put away more toward retirement.
- Seventy-three percent would rather live a more frugal lifestyle to plan for the future than “live for today” and spend money when and how they want.
“Whether age 24 or 41, millennials are facing a difficult financial balancing act as they juggle near-term priorities and future goals,” said Andrew Plepler, global head of Environmental, Social and Governance at Bank of America. “Older millennials are more secure when it comes to their savings, but many others across this broad age-range still struggle to save at all. Debt remains a pressing challenge with competing pressures making it hard for people to feel financially secure. No matter their life stage or savings level, our Better Money Habits platform arms all millennials with resources and guidance to help navigate competing priorities and reach their financial goals.”
Perception vs. reality: Despite financial successes, millennials still think they’re falling behind
- Fifty-one percent say they feel behind in their overall financial situation. This includes 39 percent with household incomes of $100,000 or more.
- Forty-three percent feel their peers are further ahead in their careers and are making more money.
- Seventy-three percent are not optimistic about their financial future, and 33 percent worry often about their finances, up from 25 percent in 2018.
- To feel financially secure, 26 percent say they need $1 million or more – which jumps to 36 percent for millennials with household incomes of $100,000 or more.
Balancing it all: Millennials are juggling competing financial priorities and making trade-offs
While they confront substantial debt levels, millennials are also financially preparing for “next chapter” goals – such as starting a family, buying a home and saving for the future.
- Seventy-six percent of millennials carry debt of some kind, including credit card debt (37 percent) and student loans (25 percent). Excluding home loans, one in six owes $50,000 or more.
- Seventy-six percent of millennials carrying debt say they can’t achieve their personal and financial goals because of it, including buying a first or nicer home (42 percent), saving for the future (40 percent) and starting or growing a family (21 percent).
- Ninety percent are willing to make sacrifices to achieve a financial goal, including cutting back on dining out (70 percent), eliminating vacations (35 percent) and downsizing their home (21 percent).
- Fifty-seven percent would rather stay in a less desirable job with a higher salary instead of taking a more desirable job with a lower salary. Fifty-two percent would rather work harder today and retire early, instead of working longer and having more free time now.
While millennials are practicing better money habits, they continue to seek advice and guidance as they look to take control of their finances and plan their financial futures. Bank of America’s Better Money Habits platform connects people at all life stages to relevant tools and resources that help build know-how about topics such as budgeting and saving, homeownership, reducing debt, and retirement so people can learn and take action. Better Money Habits also empowers people to evaluate their life priorities, such as family, health and home, to help determine how they should approach their finances.
In addition to offering online resources, Better Money Habits remains dedicated to convening open, honest conversations about money management. Last September, in partnership with BuzzFeed, Better Money Habits convened 50 young adults navigating their financial paths for a Financial Wellness Retreat in Miami, Florida, enabling them to identify their financial goals and the steps to reach them, while they shared their financial stories with their peers.
Note: Millennials were defined as ages 18 to 34 in the 2014 and 2015 reports, and as ages 23 to 37 in the 2017 and 2018 reports.
Better Money Habits®
At Bank of America, created Better Money Habits, a financial education platform of tools and information that helps people make sense of their money and take action to improve. As a cornerstone of Better Money Habits, we offer free financial education content and tools that break down financial topics in a way that’s digestible, approachable and tailored. We continually look for ways to expand the reach of Better Money Habits and also offer Spanish language resources on the site.
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