With some spending suspended during pandemic, Millennials are building pips and are more open to professional financial advice
The latest New York Life Wealth Watch survey found that nearly one in three millennials (29%) said they had built a nest egg, saving on average
The economic downturn caused by the pandemic halted major costs like child care, student loan payments and rent, and even suspended daily costs like gym memberships, coffee groceries and dining out. These cost slowdowns have been the main drivers of increased savings among the younger generations, with 61% of Millennials experiencing suspended spending related to the pandemic. Of this group, 48% of Millennials were able to save to meet their financial goals in the past 18 months, compared to 45% of Baby Boomers and 41% of Gen Xers.
âMillennials, relatively early in their careers, have faced two financial shocks in their lifetime: the 2008 recession and now the COVID-19 pandemic. It’s a silver lining that almost two-thirds of Millennials have had the chance to really think about their financial situation in the past 18 months, âsaid
As a result of these suspended spending and savings, younger generations are focusing more on their finances, with more than half of respondents saying they think more about their finances this year than last year (58%). Across generations, the top three reported long-term financial goals were building emergency funds (41%), paying off credit card debt (32%), and being on track. to retire and reach the desired age (28%). Because of this focus on achieving financial goals, along with increased savings, younger generations are open to professional financial advice. In fact, more than half of Gen Z and Millennials said their nest egg savings made them more likely to consider hiring a finance professional (53% and 51%, respectively) compared to only 33% of all adults.
Despite their newfound savings and willingness to work with a financial professional, the majority of Millennials lack confidence in knowing how to reach their financial goals. When asked how best to describe their financial strategy, only 22% of Millennials said they knew âabsolutelyâ what they were doing and 41% said they knew âsomewhatâ what they were doing. did, compared to 13% of Gen Zers who âabsolutelyâ know and 37% who know âsomewhatâ.
âA misconception about establishing a financial strategy is the notion that people need to have their finances ‘understood’ in order to work with a finance professional,â Ball said. âAs Millennials and Gen Z begin to reach financial and personal milestones, the help of a trusted professional can help them feel more confident about their financial prospects, knowing they have an expert who helps them adjust their financial priorities as spending picks up and the day – today’s routine may begin to change.
The latest New York Life Wealth Watch results highlight trends that have emerged as Americans grapple with the continuing effects of the pandemic. Additional survey results include:
Confidence differs across generations for long-term planning and emergency preparedness
Millennials are almost twice as confident as Gen Z that their retirement savings will last the rest of their lives (42% vs. 23%).
Gen X and Gen Z were the most likely to say they felt less prepared than their peers for a financial emergency (45% and 44% vs. 37% of all adults).
Men reported feeling better prepared for a financial emergency than their peers at a higher rate than all adults (27% vs. 22%).
Men are more confident than women that their retirement savings will last the rest of their lives (48% vs. 33%).
Every generation has saved money from suspended spending
Among respondents who saved, they saved on average
$ 5,212.34over the past year and a half.
Of these, baby boomers and Generation X have been more successful in saving over the past 18 months than younger generations, with baby boomers saving on average
$ 5,767.55and generation X saving on average $ 6,076.35.
Millennials saved on average only
$ 284.35more than Generation Z, who amassed $ 3,956.86.
Americans forecast a recovery in costs like mortgage and rent expenses, student loan repayments, and child care expenses
19% of respondents expect mortgage and rent costs to pick up or rise, expecting to spend on average
$ 1,410.68one month on rent and mortgage payments.
11% of respondents expect student loan costs to pick up or rise, expecting to spend on average
$ 483.70one month to pay off student debt.
18% of respondents expect childcare costs to rise, expecting to spend on average
$ 764.23one month on child care.
For a more in-depth look at the results of the New York Life Wealth Watch, click here to access the complementary file.
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1 Based on the income reported by “Fortune 500 classified in industries, insurance: life, health (mutual)”,
2 Individual comments from independent rating agencies at 09/30/2021:
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