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Generation X Tops List as Worst Savers While Millennials Excel at Managing Money, According to New GoBankingRates.com Investigation
Considering America’s varied and often turbulent economic history, each generation has grown up with a unique financial perspective. Personal finance site www.GoBankingRates.com explores how each generation (Boomers, Generation X, Gen Y, and Millennials) approaches money management and identifies which group has the best — and worst — financial habits.
EL SEGUNDO, CA (May 8, 2013) Money matters weigh heavily on Americans’ lifestyles and decisions, especially in the wake of a recent recession. For instance, according to the 2012 Scottrade American Retirement Survey, 69 percent of Americans are spending less, compared to 63 percent in 2011. Even so, some are doing a better job at saving than others – especially when compared by generation.
GoBankingRates reviewed extensive data and spoke with banking and finance experts regarding the financial habits of the following generations, with the goal of determining which generation is best at managing and saving money:
- Baby Boomers (Born 1945–1966)
- Generation X (Born 1967–1982)
- Generation Y (Born 1983–1994)
- Generation Z/Millennials (Born 1995-2012)
GoBankingRates’ investigation found that while Baby Boomers have their share of money issues, it is Generations X and Y who struggle most with saving money. Conversely, and perhaps most surprisingly, the youngest generation – Millennials – are expected to be best at managing money.
[See the complete report here: http://www.gobankingrates.com/savings-account/baby-boomers-generation-x-y-z-best-saving-money/]
Generation X and Y Fail at Saving Adequately
A January 2012 Insured Retirement Institute Report indicated that one-third of Gen Xers are confident in having enough money to live comfortably during retirement, cover their medical expenses and pay for their children’s college educations.
However, the numbers prove this confidence goes unfounded: According to the report, 41 percent of Gen Xers have saved less than $100,000 for retirement, while 23 percent have stopped contributing to their retirement accounts.
Generation Y isn’t faring much better; the average university student graduates with an estimated $28,000 in debt, while the country’s unemployment rate remains high. As a result, many Gen Yers have had to resort to living on credit cards and cashing out their savings.
However, GoBankingRates finds it may be the overall attitude Gen X and Y have about money that is largely to blame for their financial struggles.
Financial Education Advocate with Generations Federal Credit Union, David Rodriguez, told GoBankingRates, “Late X’ers and Y’ers are the worst of the four generations at saving, because of the easy access that both of those generations had to credit. ‘Why save if you can get it now and make easy payments?’ is the attitude I see regularly with these two groups.”
Generation Z Learns from the Past
Generation Z (Millennials), on the other hand, have seen how the ups and downs of several recessions have affected their parents and grandparents. As a result, a survey conducted by TD Ameritrade notes that Gen Z has a high understanding of today’s financial and economic realities.
This awareness of financial matters and the importance of saving money works in Generation Z’s favor, advises Rodriguez. “I think that the Millennials will be the best savers, because they have witnessed firsthand not only the recession, but also their own parents struggling to save for and pay for retirement,” he explains to GoBankingRates.
Even so, the site points out that regardless of generation, education is key to developing sound money management practices.
See full profile of money habits by generation here.
For questions about this report or to speak to a GoBankingRates editor, please use the contact information below.
About GoBankingRates
GoBankingRates.com is a national website dedicated to connecting readers with the best interest rates on financial services nationwide, as well as informative personal finance content, news and tools. GoBankingRates collects interest rate information from more than 4,000 U.S. banks and credit unions, making it the only online rates aggregator with the ability to provide the most comprehensive and authentic local interest rate information.