Baby boomers and millennials share many similarities when it comes to saving and spending money, according to a survey released Monday by TD Ameritrade.
However, compared with boomers, millennials face increased pressure on their spending because of student loans and the negative influence of social media.
Head Solutions Group conducted a 20-minute online survey in mid-June with 2,100 American adults, half millennials and half baby boomers, 52% women and 48% men.
Nation of Savers
Millennials have gotten a bad rap for carelessness with money in some media outlets, but this is true only of a subgroup of their generation, according to TD Ameritrade.
In fact, both millennials and boomers are savers. Sixty-eight percent of boomers in the survey saw themselves as savers, compared with 62% of millennials.
Seventy-eight percent of older respondents believed saving had to start young, while 62% of their younger counterparts said the same thing.
Savers among the respondents were likelier than spenders to be married, own a home and earn higher incomes.
They exhibited a strong desire to meet their financial obligations, and 60% of millennials said they were savers in order to meet their financial goals faster.
Savers married savers, which they maintained prevented arguments. But when spenders married spenders, they acknowledged that this could make planning for the future a challenge.
Both millennials and boomers said they were happy to save, and the vast majority equated doing so with financial security.
Eighty percent of boomers and 72% of millennials said they were saving for retirement; a majority of both generations also said they were saving for something else.
Sixty-seven percent of millennials who were not saving said they could not afford to do so, compared with 56% of boomers, perhaps because they had more debt.
Indeed, 39% of millennials were paying off student loans by making a median $200 monthly payment. Their non-mortgage debt was $15,000, compared with boomers’ $10,000.
Spenders said they wanted to “enjoy life now,” but this attitude was considerably stronger among millennials than boomers.
Fourteen percent of millennials said they were spenders because they were so overwhelmed with debt that they no longer cared.
The survey found that 80% of millennials budget, compared with just 61% of boomers. For both groups, mortgage payments were the biggest expenditure, with lower earning millennials spending more of their gross monthly income on rent or mortgage than boomers.
In addition, both millennials and boomers were more likely to opt for saving over spending when presented with various scenarios, such as spending $100 on a meal out, though millennials were likelier to give in across scenarios.