Pundits love to pile on to 18- to 29-year-olds for everything from narcissism to crimping sales of sugary sodas to stalling the housing market with their aversion to mortgage debt.
But it turns out millennials are performing far better than those supposedly older and wiser in one key metric of economic health: saving up for a rainy day.
According to a new survey by Bankrate.com, less than a quarter of Americans have the recommended six-month savings cushion.
Americans age 18 to 30, however, are the group most likely to set aside five months’ worth of expenses.
“Consumers learned something from the recession, and it does seem likely that millennials learned the most,” said Scott Hoyt, senior director of consumer economics at Moody’s Economy.com.
“They are heading out into the job market when there are no jobs there, and they’ve watched their parents suffer declines in asset prices.”
Millennials’ rainy-day funds stand in sharp contrast to those of Americans ages 30 to 49, who are more likely than any group to have no emergency savings.
Greg McBride, senior financial analyst at Bankrate.com, said 30- to 49-year-olds want to save, but in a tough economy, many are unable to replenish funds drawn down after a job loss or other financial setback.
He recommends that consumers deposit money each month directly into savings as if paying a bill, rather than waiting to see if any funds are left over at the end of the month.
Millennials’ rainy-day savings funds also tend to be fairly modest, said McBride, since their expense base tends to be lower than older Americans who have mortgages, cars and children.
The fact that millennials are establishing good savings habits now, however, bodes well for their futures.
Bankrate says it surveyed a nationally representative sample of 1,004 adults who live in the continental US.
Moody’s Hoyt said that while there are not a lot of good data on generational savings trends, Bureau of Economic Analysis data show that the personal savings rate has recovered from the pre-recession borrowing binge.