Some consider millennials entitled and unprofessional individuals who spend all their money on avocado toast and other eccentric things. But guess what? They have every right to spend their money however they please, given that in the process, they also manage to save more money and be financially wiser than previous generations.
So, give them some credit because they are surprisingly more responsible in more ways than their parents and their grandparents have ever been before them. Here are six things that make them better at the money game.
Millennials make savings more often
This might come as a surprise but according to the Bank of America’s 2018 Better Money Habits Millennial Report, millennials are considered “just as good, or better, than other generations when it comes to managing money.”
Their generation seems more determined to set saving goals and be more careful with their monthly spending. More than that, over two-thirds of millennials actually succeed in saving the intended amount. In addition, they manage to stick to a monthly budget and still have fun in the process.
The number of millennials who claimed to have $15,000 or more in savings increased from 35 percent in 2016 to 52 percent in 2020, managing to save more money with each passing year, compared to previous generations. According to a survey from Discover, “35 percent of millennials say they saved more in 2019 than the prior year,” as opposed to Gen Xers who managed to save 25 percent, followed by baby boomers with only 22 percent.
Millennials are not afraid to ask for a raise
Past generations were used to working years and years without asking for a raise. This is no longer valid for millennials who, according to the Bank of America, take advantage of every opportunity to improve their salary options.
In the past two years, more than 46 percent of millennials asked for a raise, compared to only 39 percent of baby boomers and 36 percent of Gen Xers. It’s not necessarily that they feel entitled to get a raise so much as a better understanding of today’s needs and costs.
For example, according to a study performed in May 2018 by Student Loan Hero, entry-level millennials paid an average rent of $1,358 compared to the $850 paid by Gen X in the same stage of their careers. In addition, if they want to buy a home, millennials pay 39 percent more than baby boomers who wanted to purchase a home in the 1980s.
Millennials set frequent goals
Millennials are not only better at achieving their saving goals, they are also more determined to set goals in terms of their retirement.
In its 2018 Group Retirement Plan Satisfaction Study, J.D. Power called millennials the generation “best prepared for retirement.” With their minds set on saving for their golden years, the study shows that more than half of millennials contributed to retirement plans as opposed to 44 percent of Gen Xers and baby boomers.
Two-thirds of millennials have already managed to save around $25,000 and over a quarter have already stashed away more than $100,000. And the best thing for millennials is that they still have decades left to save, compared to baby boomers: “The average boomer will hit age 65 with just 3.4 years of current income saved, far short of the 10 years some experts recommend.”
Millennials don’t shy away from money talks
For older generations, talking about money seemed like a taboo subject. This is not the case for millennials who don’t shy away from money talks and want to get everything out in the open.
According to a 2019 study by TD Bank, “millennials are the most transparent” group when it comes to talking about their financial issues. Around 98 percent admitted they discuss budgets, plans and finances at least once a month. That’s 10 percent more than couples across all age groups. In addition to being more open to discussing their finances, they are also more willing to contact and listen to the recommendations of financial advisers.
Millennials plan for families better
Another important thing the Bank of America 2018 Better Money Habits Millennial Report found out about millennials is that their plans of starting a family are based on their financial situation.
In other words, “older generations say finances weren’t really a factor in their decision to have kids; millennial parents say the opposite. And, nearly a quarter of older millennials are already saving for their children’s education – a feat given that so many may still be paying off their own student loans.”
In support of this claim, an April 2018 Time.com analysis of federal data showed that there’s an increasing demand for education planning. People younger than 35 don’t have to pay such expensive student loans ($32,900 on average) compared to older age brackets.
One interesting piece of information about millennials is that they tend to postpone marriage for longer, compared to their predecessors. According to a March 2018 Pew Research study, 57 percent of millennials have never been married, a staggering difference if we refer to baby boomers’ parents, the Silent Generation, with only 17 percent not having been married. The main reason for choosing cohabitation seems to have been money, with 29 percent saying they’ve decided to wait a little longer because they were not prepared for marriage, from the financial point of view.
Millennials are better with credit cards
It’s true that living conditions in the past were harder, which meant people were more indebted and unable to pay their mortgages or credit card balances. It seems millennials have learned from their predecessors’ experience and try to make smarter choices in terms of their debts.
As a matter of fact, around 52 percent of millennials pay their credit card balances in full every month, as reported by LendEDU’s 2017 Millennials & Credit Cards Survey, compared to 29 percent of overall Americans who pay their balances in full. Most Americans don’t succeed in covering their monthly balance, adding up interest charges and late fees as well. Millennials seem to understand the importance of paying off debts on time in order to live a comfortable life later.