How Much Does the Average Millennial Have in Savings?
Many Americans have alarmingly low bank account balances. A recent GOBankingRates survey found that the largest portion of Americans (36%) have $100 or less in their savings account, with the next most common response being $101 to $500 (14% of Americans).
Here’s a look at how millennials’ savings compare to Americans as a whole.
Also see why millennials are opting for high-yield savings accounts over investing.
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Millennials Have Low Savings Account Balances
Older millennials (ages 35 to 43) were the most likely of any generation to have $100 or less in their savings account, with 42% of Americans in this age bracket having a current balance of at most $100. Younger millennials (ages 28 to 34) are not much better off, with 39% having $100 or less in their bank accounts.
Here’s a closer look at millennials’ savings account balances.
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How Much Younger Millennials Have in Their Savings Accounts
Here’s a look at the proportion of millennials ages 28 to 34 with the following savings account balances:
$100 or less: 39%
$101 to $500: 12%
$501 to $1,000: 12%
$1,001 to $2,000: 9%
$2,001 to $5,000: 10%
$5,001 to $10,000: 7%
$10,000 or more: 11%
How Much Older Millennials Have in Their Savings Accounts
Here’s a look at the proportion of millennials ages 35 to 43 with the following savings account balances:
$100 or less: 42%
$101 to $500: 9%
$501 to $1,000: 12%
$1,001 to $2,000: 10%
$2,001 to $5,000: 8%
$5,001 to $10,000: 10%
$10,000 or more: 11%
How Millennials Can Increase Their Savings
There are a number of reasons why the millennial generation is struggling to save. This is a generation that came of age during the Great Recession and was affected by waves of job losses during the COVID-19 pandemic. Despite the challenging times millennials have endured, there are steps this generation can take to increase their savings account balances.
Be Aware of Cash Flow
The first step to saving more is to see where your money is currently going.
“Look for ways to trim expenses and/or boost income,” said Joe Buhrmann, certified financial planner (CFP) and advisory planning consultant at eMoney Advisor. “Ditch some of the subscriptions or take opportunities to shop differently — think thrift shops and discount grocery stores — or dine in more. In today’s gig economy, there may be ways for you to shore up the income side of the equation as well.”
Automate Savings
Ideally, you’ll have three to six months’ worth of living expenses in a savings account to act as an emergency fund. Building up to this takes discipline, but it’s a little easier if you automate the process.
“Automatic savings plans can take many forms,” said Robert R. Johnson, Ph.D., chartered financial analyst (CFA) and professor at Creighton University’s Heider College of Business. “For instance, one can have a specific dollar amount or salary percentage taken out of each paycheck and put in savings.”
“The biggest advantage of automatic plans is the behavioral underpinnings of the plans,” he said. “If we are enrolled in an automatic savings plan, inertia and the inherent laziness of people tend to work in our favor. That is, once enrolled in an automatic savings plan, people tend to stay enrolled.”
Don’t Give Into Lifestyle Creep
As your earnings increase, it’s always tempting to spend more. But until you have a healthy emergency fund saved up, that extra money should go toward savings.
“The most common mistake people make is letting their spending increase commensurate with their new salary,” Johnson said. “For instance, people buy a more expensive car to reward themselves for receiving the raise. What happens is they are unable to improve their financial condition because they spend everything they make.”
Methodology: GOBankingRates surveyed 1,063 Americans ages 18 and older from across the country between Nov. 27 and Nov. 29, 2023, asking 22 different questions: (1) What category best describes your current financial institution?; (2) Have you considered changing banks within the past year?; (3) If you have considered changing banks in the past year, were any of the following factors? (Select all that apply); (4) Which feature, perk or other offering is most important to you when opening an account with a new institution?; (5) Are you currently satisfied with all your banking products and services offered by your bank/credit union?; (6) Would you ever have different types of accounts across multiple banks?; (7) What is your most preferred method of banking?; (8) Which of the following is the biggest factor of you staying with your current bank?; (9) Which of the following bank accounts do you currently use/have open? (Select all that apply); (10) How much is the minimum balance you keep in your checking account?; (11) How much do you currently have in your savings account?; (12) What amount of a sign-up bonus would make you consider switching banks?; (13) Have you considered using any app-only banking platforms (aka neobanks) in the past year?; (14) How important is it to you for your bank to be affiliated with a crypto exchange/platform?; (15) In the past year, how often have you written a physical check?; (16) When was the last time you visited your bank in person?; (17) Why would you choose to visit your bank in person? (Select all that apply); (18) Have you had an overdraft on your checking account in the past year?; (19) How much do you trust your current bank to act in your best interest?; (20) How much do you trust your current bank to protect your private information?; (21) Do you trust regional banks more than national banks?; and (22) How much cash do you keep at home? GOBankingRates used PureSpectrum’s survey platform to conduct the poll.
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This article originally appeared on GOBankingRates.com: How Much Does the Average Millennial Have in Savings?
