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4 Ways Millennials Are More Money Smart Than You Think

April 06, 2018

When you see headlines like CNN's recent one, "66% of millennials have nothing saved for retirement," it's easy to believe that our country's largest, most diverse and educated generation (born between 1982 and 2004) is comprised of entitled, unmotivated slackers who remain dependent on their parents deep into adulthood.

And it's not just media hype which bolsters those unfortunate – and false – stereotypes. According to Bank of America and Khan Academy's recent study, "2018 Better Money Habits Millennial Report," the majority of millennials surveyed said their generation isn't good at managing money (64%) and three-quarters felt their peer group spends too much on "unnecessary indulgences." 

Contrary to popular opinion, it is not over-indulgence on $4 cups of coffee or $19 avocado toasts that has darkened millennials' financial outlook. This generation came of age during turbulent economic times – notably the Great Recession of 2007 when many were first entering the workforce. They also face astronomical student loans that reflect the growing price tag of education, skyrocketing health insurance expenses, and rising costs for basic expenses like housing.

For many millennials, the basic promises of the American dream, including home ownership, adequate retirement savings, and financial freedom seem far out of reach.

Despite the money myths about millennials, the truth is they are keenly aware of these difficulties, and are working hard to compensate for them.

Millennials are actually very savvy when it comes to planning and managing their finances. Here are four key ways they shatter stereotypes:


They are good at saving money.

According to the Bank of America survey, 16% of millennials have actually socked away $100,000 or more, and 67% have a monthly savings goal they stick to regularly. And nearly half of those surveyed have at least $15,000 saved. While that may not be enough to retire on, or even close to a down payment on a home, it is enough for an emergency fund, which 64% of millennials cite as a top priority.


They work hard.

There's a perception that millennials hop from job to job… and it's true, because they are the largest adopters of today's gig economy. While salaried positions with hefty benefits and perks grow harder to come by, millennials have become more likely to fill short-term jobs as freelancers and other independent contractors.

It's a workplace shift that isn't going away: Intuit estimates that 34% of the workforce is part of the gig economy today, and predicts that number will grow to 43% by 2020. While some work this way by choice, for many millennials it's the only way to sustain gainful employment in our post-Great Recession economy. According to a 2016 CareerBuilder report, 44% of 25-34-year-old workers had a side gig – compared to just 22% of people ages 45-54 and 19% of people 55 and up. Millennials hustle hard to make ends meet.


#RetirementGoals are important to them.

Despite what CNN may say, other research confirms that millennials have their head in the game – and a dynamic financial plan of action. Charles Schwab and Koski Research tracked how 1,000 Americans aged 21-to-75 managed and used their wealth. They found that 34% of millennials have a written financial plan, compared to just 21% of Generation X and 18% of Baby Boomers. Schwab's study also found that millennials don't just "set it and forget it" when it comes to employer retirement plans: 44% rebalanced their plans, vs. 30% of Gen Xers and 25% of Boomers.


They ask to be paid what they're worth.

One of the most persistent myths is that millennials are self-absorbed – but perhaps the more appropriate word is "self-confident." According to the Bank of America study, almost half (47%) of millennials have asked for a raise in the past year, which is more than 10% more than older generations.

Cynics might say that this is yet another sign of millennial entitlement in action. However, when you stop to consider that wage growth has slowed to a crawl, asking for a raise seems like a reasonable move. In 2017, there was a lowly 2.5% increase in average hourly wage. Clearly, millennials aren't going to start earning the kind of money they'll need to build up their nest eggs unless they ask for it.

More importantly, by large measure their requests were validated: 80% of those millennials that asked for a raise got one.


If you're banking on millennials facing an epic financial fail, don't count on it: the numbers prove that they are more financially savvy than stereotypes suggest. It's time to ditch the myths and start praising the mainstay of our workforce (34%) for their money smarts and fiscal discipline.