Believing you have good financial habits is one thing, but having them is another, according to a new study that found that more that half of millennials are living paycheck to paycheck, while many others are not prepared for the future.
The Bank of America/USA TODAY Better Money Habits Millennial Report found that 80% of the 1,000 millennials they interviewed felt that they were doing as well as or better than their parents, and another two-thirds thought that their financial habits fell in the good range.
Yet the results of the study showed that many were not as financially fit as they thought. With as many millennial saving for a house (32%), as there are saving for vacation (33%). On the other hand 22% didn’t have any savings, and 35% more often than not got a helping hand from their parents or a relatives.
Putting off the future
Just about three-quarters of millennials indicated that they were concerned about their future, and taking short-term actions to get or stay on track. While some are paying off all their credit card debt every month, a little over a third only keep cash in their wallet to rein in spending.
However, it will take more than these fixes to get them where they want to go financially, and many are not there yet. Just 31% saying that they are good or excellent at saving for their retirement, and of those, 16% have an IRA and one in three are investing their earnings in a 401(k).
While some are paying down their credit card debt, others are having a hard time making a dent in their debts. Of those with student loan debt, 48% are opting to pay under $100 a month to pay down student loans. At this rate it will take much longer to wipe out their debt load.
Even with their struggles, Millennials remain optimistic and perhaps idealistic with six out of ten believing that loving what you do trumps salary.
It’s all about goals
When it comes to savings, paying down debt, or buying a house, setting goals can be helpful, and the study showed that when millennials set goals they are good at achieving them– 41% indicate that they gave themselves savings goal, and of those 65% reached their goals.
Bank of America teamed up with Khan Academy, an education company, to launch BetterMoneyHabits.com, a free resource designed to provide the under thirty-four set with tools and educational materials on financial issues.
The Bank of America/USA TODAY Better Money Habits Millennial Report was conducted from October 9 – 20, 2014 by GfK Public Affairs and Corporate Communication. During that week 1,000 adults, aged 18-34 were surveyed online.