A new report examines Gen Y’s personal finances and produces some surprising results.
Members of Generation Y, also known as Millennials, have gotten a bad rap. The largest generation in U.S. history, made up of those born between the late 1970s and mid-1990s, has a reputation as entitled, unrealistic, over-confident and spoiled.
A new report indicates that Millennials may not be as bad with money as everyone thinks.
The TIAA-CREF Institute has released new research on Gen Y’s personal finances, examining Millennials’ financial confidence, habits and preparedness. The report focused on Millennials with a college degree, a defining characteristic of Generation Y.
The report explains why the findings are important:
Despite entering the workplace in the unstable economic environment of recent years, Gen Y continues to be energetic and highly optimistic. Its members are eager to make a difference, and the size and influence of this generation means they will. Yet the quality of their impact is linked to their financial behavior. Indeed, Millennials’ personal finances are more relevant for the state of the economy than those of any preceding generation.
The report includes these key findings:
- Household income. More than 60 percent of college-educated Millennials report annual household income of at least $50,000. Compare that with the national figure of 50 percent.
- Bank accounts. Most college-educated Gen-Yers report having either a checking account (94 percent) and/or a savings account (85 percent).
- Retirement plan. Sixty-nine percent of Millennials have some type of retirement plan in place.
- Outstanding long-term debt. The report says 81 percent of Millennials have at least one form of outstanding long-term debt and 44 percent have more than one.
- High-cost borrowing. Twenty-eight percent of respondents report having used one or more high-cost borrowing methods, such as payday loans, during the past five years.
- Car and mortgage debt. Forty percent of Millennials have car loan debt and/or mortgage debt.
- Planning for a rainy day. Only 48 percent report having enough funds set aside to cover expenses for three months if something unexpected happens.
The report goes on to say that although Millennials’ asset ownership is encouraging, they are burdened by debt and have a low level of financial literacy. So there’s definitely room for improvement here.
Are you a Millennial? Do you agree with the report findings? Let us know in the comments below or on our Facebook page.