Think all millennials are spending their money on expensive coffee and avocado toast? If so, you might be surprised by the results of a new Bank of America survey.
The study indicates one in six millennials have $100,000 or more in savings. That’s double the amount of people who saved that much in 2015.
The study further indicates that 47 percent of millennials have saved $15,000 or more, also up from 33 percent in 2015.
Nearly two-thirds of millennials are saving at some level, while 54 percent report that they are budgeting their money on a regular basis.
The Bank of America report shatters the stereotype that many millennials have poor money management skills and often overspend on frivolous purchases. The statistics indicate that more millennials areplanning for retirement and emergencies more than ever before.
Steven Elwell of Level Financial Advisors in Amherst believes millennials originally got their reputation after graduating during the stock market’s decline in 2008. The market rebound – notwithstanding the recent pullback -- partially attributes it to millennials’ savings prowess.
“These are probably people who came out of college, got good jobs and started saving diligently and have seen it accumulate over the last 10 or 15 years as the stock markets continue to rise,” Elwell said. “They’ve done just a good job of regularly saving money and accumulating and letting the power of compound interest work for them.”
WBFO hit the streets of downtown Buffalo to talk with some millennials about the new data. Many expressed skepticism about the report’s findings. John Davis laughed when he heard that one in six millennials have saved at least $100,000.
“That’s ridiculous, I can’t think of one of my friends who has that much saved,” Davis said. “I’ve only been working for one year ,so I don’t have that much saved…my spending habits are also pretty bad.”
Other millennials agreed with Davis’ assessment that few millennials have managed to build six-figure savings accounts.
“Given the age range for the millennials and the way young people like to live, it just seems like a lotto save at such a young age,” said Buffalo resident Nick Nabozny. “I think it’s a good amount to have saved, but I don’t know if I believe those numbers to be accurate.”
Elwell understands why many millennials feel that the numbers are skewed. Because the study’s age range spans into the mid 30s, the millennials who have saved $100,000 are likely those who are at the older end of the spectrum and have been saving for more than a decade.
There are differing views as to what defines millennials. The Census Bureau defines the millennial generation as children born between 1982 and 2002. However, some models use 1980 or even the late 1970s as the starting point for defining millennials. The Bank of America survey considered savers between the ages of 23 and 37.
Saving can be daunting, but Elwell offered some tips for younger millennials who want to prepare for their future. He encourages young millennials to use the internet and smartphone apps to open the doorway to saving.
“It doesn’t matter if you’re starting with $5 a week or $100 a month,” Elwell said. “Literally just getting started and having the information to figure out how to [save smartly] is by far the biggest step and the hardest step. And once you get that going [saving] becomes much easier.”