It is a popular belief that millennials are only good at spending which has eventually given them a bad reputation of neglecting to save. But in reality, they are pretty good at saving as well!
With a slight amount of research, you will come across the astonishing fact that about 73% of millennials are indeed savers. Not only that, more than half of them have saved quite a chunk of their earning. 24% can even boost savings of more than $100,000 with their financial strategies. All these figures have astounded many people and inspired them to adapt their footsteps for sound growth and future security.
Form saving early to saving smartly and prioritizing objectives has made millennials sharp savers. Their thinking distinguishes both their savings and spending patterns. That turns out to be quite intriguing and we are going to discuss them below.
SAVING SMARTLY – STRATEGIC PLAY:
Unlike previous generations, millennials are risk-takers. They have realized that saving money is not enough. They know that if you have the cash, you can create more from it. As they are not risk-averse like their predecessors they experiment with different opportunities in the market. Rather than just hoarding money and keeping it in a bank account. Either they earn interest from it or invest it to gain profits. This way they can save more. There are chances of loss as well and millennials do make mistakes, but the majority of them play smart and safe at the same time. They do take the risk however with caution in consideration. That is why 90% of them are successful in multiplying their saving within no time. However, not all of them are successful and you must have heard a fair share of failure stories as well. This is because some individuals take risks beyond their means and their rash decisions result in their fall. So to make smart decision click here and learn how to save smartly.It is your hard-earned money and you should know how to create more from it without losing it like your counterparts. In this competitive world earning money is not enough. Finding out how to invest it also vital. Thus save smartly like millennials now!
MILLENNIALS SAVE EARLY:
Contrary to what everyone thinks, the Bank of America’s latest report called Better Money Habits proves that millennials start saving money for retirement quite early. This research targetted 1,903 Americans millennials aged between 18 to 73 and found that millennials adopted a faster approach relative to previous generations. Their saving habits develop as early as 24. While as per studies, the age when Gen X began saving was 30 and baby boomers started even later at 33. This has to do with the Great Recession as well. The aftermaths of recession heavily influenced millennials and they realized they couldn’t rely on the future. It indirectly impacted them and instilled a sense of financial responsibility in them before their age! The older ones have faced it while the younger ones learn the lesson from them.
WHAT DO MILLENNIALS SAVE FOR?
As we all can see, millennials are not inclined toward saving for retirement. Their saving habits differ considerably from their descendants due to the vast difference in their objectives. As per expert Merrill Edge, today’s youth tend to have very different priorities than their parents and their grandparent. Their spending and saving patterns are more present-oriented than the future,unlike their predecessors. The key difference in thinking of this new generation of adults is that they don’t emphasize on retirement planning. But the question is that if they are saving so much, then what are they up to? As per research, about 50% are saving for emergency funds, while 32% save to buy a house while remaining ones opt for retirement.
WHY DO THEY SAVE LIKE THIS?
By experiencing the recession unfolds, the young millennials are alert to the risks of economical downfall which is why they save for more practical causes instead of retirement. Moreover, the traditional life script of emolument, buying a house, then getting married and having children is no longer in effect. The expectations of millennials from their lives and their goals are changing as the digital age brings a newer perspective.
They value freedom and flexibility more than security and safety. That is why they save to travel and have unique experiences. They oppose the wrinkled and wise rule and don’t wait for their golden years to explore the world. That is why their investment horizon is also less than 10 years which was not the case for the generation before them who saved for 30 years down the line. Last but not least, an easy retirement is no longer the desire of the youth today. This is because easy retirement has become too hard to earn.
With skyrocketing prices, exorbitant living costs, fall in real wages, heavy student loans and effects of technology burdening these millennials, it has become more important for them to live for today than for the future!
WHAT PERCENTAGE OF INCOMES HAS TO BE SAVED?
As per research, young adults today save a higher percentage of their incomes than their parents. About 20% of their income is saved which is more than Gen X, boomers, and even seniors. This is because no matter where you fall on the political spectrum, you cannot deny the fact that real income is reducingand so is the saver’s benefit. Millennials are earning 20% less than baby boomers and as per Deloitte, their net worth has also decreased by 34%. So it is sad to say that millennials face precarious economic conditions which makes saving necessity for them to avoid pitfalls of modern living yet fails to create wealth for them.
CONCLUSION
Without a shadow of a doubt, millennialshave depicted commendable saving habits, even though there are multiple challenges in the financial world. Even though the recession has fueled their savings, it has also made it difficult for millennials to transform their savings into considerable wealth. The inflation competition in the market, political conflicts, and economic crisis, all have adversely affected the monetary value. Nevertheless, they remain steadfast and are gradually mastering financial matters to transform their lives accordingly!
