Millennials work hard to save money but do have some indulgences, including travel, subscription entertainment services and entertainment expenses. Photo: Shutterstock)
Millennials may have conflicted attitudes toward money, but according to a study from Principal Financial Group, a lot of them are razor-focused on retirement. In fact, so are quite a few Gen Xers—and together, they make up a group Principal has christened “supersavers.”
The 2018 Super Saver Survey reveals that, among the GenX and millennial respondents, 70 percent are making maximum contributions without even having a formal budget, relying instead on major financial sacrifices to do so.
What are they sacrificing? It depends a bit on their generation, although 44 percent of both GenXers and millennials report high levels of work-related stress. After that it diverges a bit, with 41 percent of GenXers limiting their travel while millennials occasionally splurge on it; still, 38 percent of millennials also limit their travel.
More GenXers drive an older car (40 percent) than millennials (38 percent) and own a modest home (35 percent, compared with millennials' 31 percent). In addition, 33 percent of GenXers report working more and taking time away from family. In contrast, 35 percent of millennials report having no house cleaner as one of the major sacrifices they make to save for retirement, compared with 30 percent of GenXers.
Millennials are also more likely to buy secondhand than new, with 20 percent reporting that they do so, compared with just 14 percent of GenXers. But GenXers are slightly more likely than millennials to take on do-it-yourself projects, (31 percent compared to 29 percent), rather than hiring someone else.
Millennials do like their splurges, though, with 51 percent citing travel, 44 percent subscription entertainment services and 31 percent entertainment expenses as things on which they spend their money.
In addition, 70 percent of respondents overall say they learned very little or nothing about personal finances in school. However, apparently the financial crisis and Great Recession has taught them to be wary—in particular millennials, who started saving for retirement earlier in their lives than GenXers. Ninety percent of them have an emergency fund, too.
But their savings levels really are remarkable, with 55 percent of millennial respondents and 59 percent of GenXers having put away more than $20,000 in 2017. Yet just 20 percent feel this makes them supersavers—but 60 percent of these supersavers are teaching others how to become a supersaver.
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Marlene Satter
Marlene Y. Satter has worked in and written about the financial industry for decades.
