Are Millennials Really Worse With Money?


It seems that in the media, Millennials are constantly getting a bad rap. They are lazy, entitled whiners living in their parents’ basements and sipping expensive coffee.


But we all know Millennials who are nothing like that. Like my son’s kindergarten teacher who spends all day shaping the hearts and minds of 20 little high-energy, snotty-nosed humans, then goes home to take care of her baby and husband (all while pregnant).


Sometimes the only way to reconcile our own experiences with what we hear in the media is with cold, hard facts. This is a money blog, so today we’re going to talk about money. Are Millennials really worse with money than everyone else? Or is that just something that old people say to feel better about themselves?


In June 2017, Charles Schwab published a report entitled How Americans Define And Manage Their Wealth that gives us some insight into the money habits of each generation. There were three generations studied; Millennials, Baby Boomers, and the smaller, oft-forgot Generation X.


Millennials Spend More Freely Than Other Generations

When it comes to spending, the younger the generation, the more they spent for every category.


The coffee stereotype is true. Sixty percent of Millennials buy coffee that costs more than $4 each, while only 40% of Gen X and 29% of Boomers do. The biggest disparity was spending money on taxis and ubers, where 53% of Millennials, 29% of Gen X and only 15% of Baby Boomers answered positively.


This is what the report showed:

Graphic of Spending habits by generation, Millennials, Gen X and Baby Boomers


Maybe younger people just have more active social lives or don’t have kids sucking up their resources. It could also be the notorious FOMO (fear of missing out) or an overall financial confidence that leads them to spend more freely.


Millennials Are More Confident About Their Financial Prospects

I was under the impression that today’s rhetoric was that this is a “new economy” where no one can get ahead except the super-rich and today’s young were destined for a lifestyle below that of their parents for the first time in history.


Apparently, the Millennials weren’t listening. When asked How confident are you that you will be able to reach your main financial goals?, 35% of Millennials said they were very confident. That is a huge contrast to the 17% of Gen X and 13% of Baby Boomers who did.


Why are Millennials so confident? Is it youthful ignorance or is there something more to it?


Millennials Are More Likely To Have A Plan For Their Money

I think one of the reasons that Millennials are more confident about reaching their goals is that they are more likely to have a written financial plan in place. In fact, for people of all ages, 49% of those with a written financial plan were very confident about meeting their goals while only 13% of those without a written plan were.


Over a third (34%) of Millennials have a written financial plan and 72% of them developed it with a professional. Only 21% of Generation X and 18% of Baby Boomers do. Why is this so significant? Does having a written plan really make any difference?


People with a written financial plan were more than twice as likely to max out their workplace retirement plan (27% v 11%) and have investments outside of that plan (34% v 16%). They were much more likely to have an emergency fund of 3 months’ expenses (45% v 26%) and a monthly savings goal (40% v 29%).


Those with a written financial plan are also more likely to have a budget, make payments on time and have an up-to-date will. These are all basic financial practices that separate those who get ahead from those who can barely keep their heads above water.


Does That Mean Millennials Are Actually Better With Money?

So, if more Millennials have written plans and people with written plans usually develop better money habits, does that mean Millennials are actually better with their money? I wouldn’t be too quick to go there.


Millennials are the least likely to make loan payments on time (or have no payments), with 33% of Millennials, 43% of Gen X, and 50% of Baby Boomers doing so. They are also the least likely to pay off their credit cards or not have any. Forty-two percent of Baby Boomers, 38% of Generation X, and only 31% of Millennials do.


It looks as if Millennials have a ways to go with their money habits. They are doing well planning and seem to understand the importance of saving. It’s just with spending and paying back what they spent that they have some maturing to do.


Does Generation X Win At Anything?

I know some of you are sitting there singing to yourselves, I’m just a poor boy from a poor family…, thinking that no one cares about Generation X. I do! I know that you’re more than just a buffer between two large, often competing generations. You matter to God and you matter to me.


For most of the survey, your answers fit nicely in between the other two generations. You’ve been trained so well. But there were a few instances where you broke free of your generational confines to lead the pack.


This is where you pulled ahead of the others:

  • 1% more of you have financial plans that aren’t written
  • More of you with written financial plans did them yourselves (1% more than Baby Boomers)
  • You have the most budgets (45% of you)
  • More of you max out your workplace retirement plans (18% of you)
  • You win by a couple of percentage points for having a savings account
  • You have the largest percentage of people who are somewhat confident in their ability to reach their financial goals
  • You’re the least likely to receive professional advice. I figured you’d find that something to be proud of, even if the other generations wouldn’t agree.


While it was fun to compare the money habits of each generation, what spoke to me more was the fact that so few people in our country actually have good money habits. What do you think you can do as pastors to improve things?



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