While millennials say saving is a top priority, nearly 2 in 3 say that they can’t set aside any money because they spend too much on impulse purchases, according to a new study.
In a survey by the American Institute of Certified Public Accountants, 1 in 3 millennials ranked saving as their No. 1 goal for the year – ahead of living a healthy lifestyle (1 in 5), paying off debt (1 in 5) and losing weight (1 in 7).
Just over half of the millennials surveyed admitted that they were impulse shoppers, defined as making an unplanned purchase of $30 or more on a daily or weekly basis. Also, the survey found impulse buyers more likely than those who never or rarely make an impulse purchase to carry balances on their credit cards, have less than $100 in their checking accounts, and pay late or overdraft fees.
Other distractions from savings cited by millennials:
- Salary too low (84 percent)
- Too many bills (81 percent)
- Paying down debt (79 percent)
- No personal budget (62 percent)
“Many young adults think saving is impossible,” said Gregory Anton, CPA and chairman of the institute’s Financial Literacy Commission. “While low salaries and high debt levels can certainly be barriers to saving, the key is to create a budget and stick to it.”
For those who do save, top saving goals cited by millennials in the survey were:
- An emergency fund (40 percent)
- Vacation (36 percent)
- New house (27 percent)
- Car (26 percent)
- Retirement (22 percent)
- Starting a family (15 percent)
- Wedding (8 percent)
Millennials are internalizing the message that saving is important, but they still need help creating habits that stick,” said Ad Council President and CEO Lisa Sherman. The Ad Council and the accounting group work together on a financial literacy campaign called Feed the Pig, which has interactive tools including calculators, podcasts and free subscriptions to weekly saving tips.
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