According to CNN Money, millennials – young adults born between the years of 1980-1995- are not saving money. Their savings rate is at negative 2%, which means they are spending more than they are bringing in. In contrast, workers between the ages of 35-44 have a positive savings rate of 3%.
Americans in general have problems with savings. The United States personal savings rate has been falling since the early 1980s. For Millennials, there are multiple factors making it even more difficult for them to increase their savings. While the job market has been improving, wages have remained stagnant. In fact, wages have barely budged since the 1990s. This age group has also had to take out a large amount of debt for school in order to remain competitive in the job market. According to a 2012 Pew Research Center analysis, about 40 percent of households led by someone 35 or younger have student loan debt. Additionally, older workers are choosing not to retire, leaving younger workers with limited upward mobility.
The good news is that the savings rate is steadily improving. In 2007, millennials’ savings rate bottomed out at negative 15%, so the savings rate we see today is much improved. However, millennials continue to be the only age range with a negative savings rate.
Millennials seem to have been hit especially hard by the recession, and while the situation is improving it can be very difficult to get out of a financial rut. A Wells Fargo survey of Millennials reported that 47 percent spend at least half their paychecks relieving various kinds of debt (student loan, credit card, mortgage, etc.). No matter your age, if you find yourself unable to get out of debt and want a fresh start so you can start to see positive savings, we can help. Please give us a call and set up a free consultation with one of our experienced attorneys today.