Lay Off Millennials OK? We’re Saving As Fast As We Can
Millennials get a lot of grief. A recent survey, though, according to the Washington Post, shows that, even with stagnated wages and the recession and so on, they — oh, who am I kidding, we — are also managing to save some money for the future.
Despite all of these valid reasons for not putting money away, most millennials are saving something: 37 percent were saving 5 percent or less of their pay for retirement, emergencies and other financial goals.
That may not sound like much, but it is more than double the 18 percent of people who said they weren’t saving anything. Plus many millennials are saving much more. Twenty percent said they were stashing 6 to 10 percent of their salaries and about one in five were saving more than 10 percent, according to the survey.
That’s pretty good! After all, no matter what people tell you, it’s hard to realize you need to get serious about saving until your joints start to creak when you get up from a chair and you have one too many near-death experiences with club drugs. Remember this feature from New York Magazine about what 21 women regret spending money on? Shoes, Seamless, and Sephora, basically — and all during that first post-college decade when twenty-somethings are still finessing their impulse control and learning that while life is long, credit lines should be short.
Award-winning musician and force of nature Lisa Fischer nailed it in her recent interview on “Death, Sex & Money”:
As a singer, I wasn’t thinking that way [about saving for retirement]. You’re staying at all these great hotels, and everybody’s spending money like water. You’re buying the caviar for breakfast, cause you can! And it’s just so new and it’s just so cool and blah blah blah. And now I’m looking like, ya know, that was stupid. (laughs) That was really dumb! That literally went down the toilet.
When I think about the money that I have gone through I have to laugh to myself. I wasn’t thinking creatively about money and it’s really almost life and death to think about money in creative ways. I think about things differently now [that she’s about 50]. I don’t have the credit card at Neiman Marcus anymore. I have literally 2 credit cards. One is for business and one’s personal. The other one is just my ATM card. You know, I don’t like to look at how much I have because it’s never enough.
If at least a good chunk of millennials are thinking like that before they reach midlife, that’s impressive. It means we’re learning from the mistakes of others, which is a sign of emotional sophistication. Besides, only 18% of us are saving nothing at all! Compare that to Gen X, which as of last year, was having difficulty:
Gen X’s median retirement savings has dropped in the last two years and now stands at less than $60,000. It also found that 42 percent have less than $50,000 saved, compared with 30 percent two years ago. …
On top of the recession, there is Gen Xers’ behavior.
“There’s been tremendous leakage in their retirement savings,” Weatherford said. “Fourteen percent of Gen Xers have prematurely withdrawn money from their retirement accounts for nonretirement purposes in the last year.” They did the same thing two years ago, she said, when the institute did its last survey. …
20 percent are saving less than 2 percent of their income, and 30 percent of Gen Xers who responded have 20 percent or less of their reported retirement savings in equities.
So high five, millennials. We’re doing okay. Especially if we’re not tapping our retirement savings already.