I’m popping in mid-week as a departure from regular programming to talk about a new Bank of America survey, which I read about in USA Today, showing millennials are doing better than a lot of people (including me!) think.
According to the study, 16% of millennials (now age 23-37) have at least $100,000 in savings. The number was just 8% in 2015. 47% of millennials have a minimum of $15,000 in their bank account.
There’s this societal conception of millennials as “broke” and “moochers.” Usually when we’re in the news it’s because some moron is saying our avocado-eating is the reason we can’t buy homes or we’re the reason places like Applebee’s and Buffalo Wild Wings are going out of business. There’s definitely this underground movement of financial awareness– blogs and online forums about finance and especially financial independence are really thriving– but it’s interesting to me that I only know finance-savvy people on the internet, and not necessarily in real life.
The vast majority of people I know are not in that fortunate 16% or even 47% who have healthy savings accounts. Now, most of my work is in arts and/or education, so I’m definitely not surrounded by our nation’s highest earners. I also think my personal sample size skews toward the younger end of the millennial generation– maybe ages 25-31. My guess is that most of the bigger savings accounts belong to those in the upper range of the generation. And that makes sense! Millennials aren’t teens and college kids anymore. We’re actual adults. And, as actual adults mature, they ideally build on their savings. So this study seems to be picking up on a pretty natural progression that comes with aging, even if that $100,000 number is a lot higher than I would have guessed.
Some information I found interesting in the USA Today breakdown:
- Millennials’ top stressors included saving for retirement (Will there be Social Security by the time we get there?) and student loans (Exorbitant!), which I definitely see reflected in my real-life peers’ concerns. I was also not surprised to see that 1 in 4 millennials consider themselves employees of the “gig economy,” which I talked about in my introduction post, and are thus even more worried about retirement savings since they don’t get traditional 401k benefits.
- The (perhaps only tangentially related) video embedded at the top of the USA Today article features millennials who lived with their parents in order to save up for homes. To me, this is an odd video to pair with this article, because it’s an opportunity available only to those who are privileged enough to have parents able to help them out! Then it makes it easy to assume that only the privileged are in the 16% or 47% with large savings accounts, instead of talking about savings as a more accessible goal we can all work towards (even if it has to be in baby steps, and we aren’t anywhere near $100,000 or even $15,000).
Some information I think we’re missing/questions I have:
- What are we defining as “savings” for the purposes of the study? Does it include 401k? Home equity?
- What about the flip side of savings: debt? What percentage of millenials are at least $100,000 in debt? What percentage have at least $15,000 in debt? How much debt are the highest savers carrying? Credit card debt is at an all-time high.
- How do Bank of America’s findings fit in with this oft-cited statistic that 56% of Americans couldn’t afford a $1000 emergency?
What do you think about the Bank of America study? If you’re looking for some interesting insight on it, I recommend checking out this reddit thread, which is how I found out about it in the first place! Some of the redditors’ points of discussion include: the huge stock market gains recently and how they impact the 8% increase in millennials with $100,000 savings since 2015, the trauma of experiencing the financial crisis as a child/young adult as a motivation for saving, and the fact that the actual report on the study states the information was self-reported (and thus less reliable) by only 300 millennials (Holy tiny sample size, Batman!). Whether it’s poorly conducted research that just serves as clickbait or an actual valid trend, it’s definitely intriguing.