Everyone loves to hate millennials these days. They are characterized as being lazy, entitled and self-absorbed. As is sometimes the case, those stereotypes might have some sort of basis in reality, but as is almost always the case, that’s not the whole story. Laziness, entitlement and narcissism aren’t all that millennials are good for. According to some recent studies, they’re also pretty good at saving. Maybe even better than their elders.
The percentage of millennials saving more than 6% of their income has increased substantially from last year. Not only that, it has surpassed the percentage of people in the 30-49 age range saving more than 6% of their income. Many have attributed these saving habits to the fact that millennials had to watch older generations struggle through an economic recession, as they were growing up. Keeping a healthy savings account is a precaution they can take against the economic troubles that their parents and grandparents faced.
Contrary to popular opinion, millennials are also seeking to avoid debt. While college debt has skyrocketed in the last decade, and millennials are holding the lion’s share of it, their debt for things like credit cards, mortgages and auto loans has notably decreased. It is actually older citizens whose debt has increased in every category except credit card debt since 2003. This is in part simply due to people getting older. Many taking on debt in the early 2000s have moved on to the next age bracket and taken their debt load with them. Older borrowers with more credit were also able to continue taking loans in the wake of the recession when younger borrowers would have been denied loans.
There are of course important facets of finance other than simply saving and avoiding debt. Depending on your income, putting money away by itself may not be enough to prepare you for retirement. It’s also good to understand investments and to make wise investments, not to mention the importance of developing useful skills and a solid work ethic to help yourself advance in your career. These qualities seem to be at odds with the picture of millennials that many people present. However, as with saving and avoiding debt, those stereotypes might not prove to be as true as they are believed to be. Saving and avoiding debt are good qualities millennials are exhibiting that definitely go a long way towards reaching a healthy financial state.
Every generation has its fair share of blind spots. Only time will tell how millennials mature with age, but as it stands, they seem to be developing healthy saving habits. Couple those habits with a propensity to avoid debt, and you have a recipe for personal financial stability. In the current state of financial and economic uncertainty that much of the world finds itself in, these may prove to be invaluable habits. Sadly, it seems that every few months another country falls victim to economic collapse.