Surprising Facts About Millennials and Money
Some people label millennials as entitled and lazy, but when it comes to work and finances, this is hardly the case. A new Credit Karma study finds that millennials are doing a good job of managing their money and their careers.
“The Credit Karma Millennial Report proves that, in spite of their negative reputation, millennials are actually much wiser with their finances than we often give them credit for,” said Bethy Hardeman, chief consumer advocate at Credit Karma. “Survey findings from all parts of the country prove millennials are following in the footsteps of generations before them: saving for the future is top-of-mind, loyalty with employers who offer fair pay is a priority, and hitting life’s traditional milestones is important to them.”
Here are the results of Credit Karma’s analysis of more than 1,000 millennials.
- Not all millennials are job hoppers. Roughly 70% of older millennials (ages 29 to 34) said that have worked at each of their jobs for four or more years. Roughly 63% of younger millennials said they plan to work for their current employer for four or more years. Among this group, about 25% said they plan to remain at their jobs for eight or more years.
- Millennials are saving for retirement. Young people are getting ready for their futures. About 52% of millennials said they are saving up for their golden years. Among this group, 89% began saving at the age of 28 or younger.
- Millennials are saving for emergencies. Most Americans are not putting enough cash away for an unexpected expense, but millennials are doing a good job of squirreling away cash for a rainy day. A large number of millennial respondents (69%) said they have emergency cash in reserve. About 36% said they have more than $1,000 in savings. This is in contrast to a Bankrate study of Americans and savings. According to the study, 63% of Americans said they wouldn’t have enough cash to cover a $500 car repair or a $1,000 emergency room visit.
Getting in control of student loans?
Different studies say different things about this matter, but according to the Credit Karma study, millennials are not letting their student loans derail their financial plans. The study does acknowledge that millennials are overwhelmed by large debt loads, but that they are managing the debt well. Less than 20% of respondents who did not have any open credit cards cited their student debt load as impacting their decision to take out credit. Only 4% of respondents said student loans were delaying their plans to purchase a home. However, a previous study by Bankrate found that 56% of millennials said they had to put off major life events due to educational debt. Among the financial plans that had to be put on hold were purchasing a home, saving for retirement, and buying a car.
Millennials are serious about career advancement
Millennials are given a bad rap for changing jobs frequently, but it may not be for the reasons you once thought. While many believed millennials primarily changed jobs based on emotion, career advancement and money were cited as the primary reasons by many survey participants. Close to two-thirds of millennials said a salary increase or promotion were the reasons for switching jobs. Just 1 out of 4 said they made the switch because they simply wanted to try something new.
Money tips for millennials
All it takes is a plan and some discipline if you want to whip your money into shape. You can first start by taking time to track your spending habits for at least 30 days. Once you see how much money is coming into and going out of your household, you can make the appropriate changes. Also take time to manage your credit. Order a copy of your credit report (you can do this on annualcreditreport.com) and take a look at your overall credit situation. Pay close attention to your credit utilization, as it has a big impact on your credit score. (The amounts owed on all of your accounts makes up 30% of your FICO score.) If you need help managing your money, you can also look into hiring a certified financial planner. A financial planner can go over your financial situation and assist with developing a plan that works best for you.