The TD Ameritrade 2016 Millennials and Money Survey suggests Millennials “may have more in common with their depression-era counterparts than their Boomer parents or grandparents.”
Of the more than 1,000 Millennials surveyed, a solid majority (62%) identified themselves as proactive savers, while 80% have a budget. The vast majority does not yet feel financially secure, but most (85%) anticipate reaching financial stability and independence in the foreseeable future.
According to the TD Ameritrade research, Millennials’ affinity for savings means most (77%) would “stash an extra $1,000 in a savings account instead of the stock market.”
“The Silent Generation and Millennials came of age during a major financial crisis, which increases the propensity to save and financial conservatism,” explains Matthew Sadowsky, director of retirement and annuities at TD Ameritrade. “Further adding to Millennials’ financial anxiety is the economy, student debt, and escalating peer influence from social media.”
The polling data suggests Millennials in other ways are less frugal, in part thanks to social media driving some Millennials to feel increased social pressure to spend or keep up with others, more so than elder generations. Nearly one-quarter of Millennials feel pressure to keep up with the spending habits of their friends, the data shows, while 15% of Millennials say they are willing to spend money to make a good impression. Further, Millennials are “more likely than Boomers to report having spent more/not saved as much in a month than they wanted to,” with 56% of Millennials and 29% of Boomers saying this happens very often/somewhat often.
“Millennials consult parents and/or friends for financial advice while Boomers are more likely to consult a professional adviser,” the report finds. “Millennials are more likely to feel confident investing using a combination of online and human contact than Boomers (40% vs. 33%).”
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“Millennials were in a position to learn the value of financial preparation, having grown up in the aftermath of a recession,” Sadowsky adds. “The qualities they have developed, like budgeting discipline and a realistic outlook on retirement, may well pave the way toward their financial future.”
In another positive sign, two-thirds of Millennials are saving for a down payment on a home or a related major expense, considering 29 the ideal age to become a homeowner. Revealing their longer-term outlook, almost half say they are actively concerned about running out of money in retirement, and more than half say they would be willing to retire later to maintain their desired retirement lifestyle.
Being raised mainly by the Boomers, the two generations are naturally on the same page when it comes to many financial attitudes. For example, 80% of both Boomers and Millennials suggest “saving,” as opposed to “spending,” generally makes them feel secure and, as a result, happier. The number one reason to save is “to have the confidence you can meet your financial obligations whatever happens.”
Other findings show, when presented with a variety of scenarios that included a spending option and a saving option, both Millennials and Boomers were more likely to choose the saving option over the spending option. For example, nine in 10 Boomers chose to put $100 per week toward debt/saving rather than spend $100 on a meal out, and seven in 10 Millennials made the same choice.
The full survey report is available for free download here.