Money

Millennials are Getting Surprisingly Good at Saving Money

February 26th 2015

By:
Alicia Lutes

The economic recovery may not have felt like an instant fix-all, but the indicators of its success are trickling in as time goes by: like the fact that people are saving more money than before — and young people (Millennials) are the top generational group when it comes to increasing their financial stability, a new study has shown.

According to America Saves, ​a non-profit campaign from the Consumer Federation of America, Millennials are getting it right on several different fronts. ('For once,' the old curmudgeons reply?) Not only has the percentage of Millennials actively trying to put away a minimum of 5 percent of their income increased by 6 percentage points — from 50 to 56 — in 2014, but us young guns are even using things like "spending plans" and "savings accounts" (you know, words usually reserved for The Olds) with far more frequency.

But when we used the word "trickling" before, we meant it, because the pace is truly glacial.

While there were across-the-board increases for the number of people who've started saving money, only two-fifths of survey respondents indicated that their progress was "good" or "excellent" in regards to meeting saving goals and needs. Not a totally surprising fact, considering persistent wage stagnation and that the buying power for the current minimum wage is far lower than that of 1968. 

"Our survey findings are consistent with both continued economic recovery and the persistence of inequality," said Stephen Brobeck, executive director of the Consumer Federation of America and a founder of America Saves, in a press release. "Americans are saving a little more effectively today than a year ago, but only a minority are doing so very successfully."

The number of Millennials with savings plans (be they a savings account, stocks and bonds, 401K, or otherwise) increased to nearly half — 47 percent, up four points — and the number of young people utilizing spending plans to control their finances increased from 34 to 39 percent. But the biggest gains were in emergency funds, where we saw a nine percent jump to 64 percent from 53. And guess what? That's a higher number than the demographic above ours (35 - 44), of which the number was only 61 percent in 2014. Because nothing makes you feel like more of a boss than having more money saved to cover an unexpected ER or repair shop visit than your actual boss. (Sick fiduciary burn, man.) 

The time for adulting is now, Millennials! It might be slow but don't forget: the tortoise ultimately won the race, didn't he?