Millennials in Better Financial Shape Than Other Generations, Says Report
Millennials are feeling better about their finances than all other age groups, according to a study released on April 20 by Bankrate.com.
Thirty-three percent of millennials said their overall financial situation is better now than a year ago, while 16 percent said it has gotten worse.
The situation is much worse for older generations. In fact, only 19 percent of those 50 and older reported being in a better overall financial situation.
Millennials reported being more satisfied with their savings accounts than other generations.
Thirty percent of millennials said their savings are in better shape now than a year ago. That compares to only 13 percent of those age 50 and older who said their savings is in better shape now than a year ago. In total, 20 percent of Americans are feeling better about their savings.
"We see better savings habits among millennials than we have seen in previous generations. They are also more hesitant about debt," said Greg McBride, chief financial analyst for Bankrate.com.
The Great Recession may have hardened millennials, according to McBride, since many of them came of age during the economic downturn of 2007-2008, with many of them witnessing the impact it had on their parents or other family members.
"Many millennials had a front-row seat for the recession. And even if didn't impact them directly, they saw the impact that it had on family members and because this happened during their financially formative years, it is ingrained to habit, in particular with regard to savings. They don't appear to be as consumption-focused as previous generations," McBride said.
When it comes to job security, millennials are feeling better now than a year ago. Thirty-two percent of employed millennials said they have more job security than a year ago, only 4 percent said they have less. Overall, 23 percent of Americans are feeling better about their job security now when compared to a year ago.
"Contrary to this misperception that millennials are all buried in student loan debt and can't find jobs, the fact is that we get a much different reading from millennials," McBride said. "They give us the highest marks of all age groups when it comes to job security."
When it comes to building net worth though, millennials could be doing more, according to the survey. Overall, millennials aren't as invested as older generations. Only 18 percent of millennials reported higher net worth now versus a year ago, that's in comparison to 29 percent of those ages 30 to 49 that reported higher net worth.
"Even this makes sense, considering that millennials are less likely to own homes than their older counterparts, and they are not benefiting from the rebound in home prices." McBride said.
Overall, millennials appear to be on the right track.
"I think all told, what we are seeing is really the ground work for solid financial habits that will benefit them not just in the next few years, but really for decades to come," McBride said.