While you might assume that the older generations are better at saving than Millennials that is not the case, according to a new study by Discover, finding that the younger set is outdoing their older counterparts when it comes to putting away money for the future. They found that 81% of Millennials have started saving money, compared to 74% of Generation X and 77% of Baby Boomers.
On the other hand, 35% of Millennials indicated that 2017 was a big year for them when it came to saving, having saved more than they did in 2016. While just 25% of Generation Xers and 32% of Baby Boomers said the same.
How are they saving? There is a generational divide in terms of how people save, with Baby Boomers more likely to save money by eating home-cooked meals, while Millennials will use public transportation to save, and Generation Xers are all about using coupons.
All the generations saving
Why did they save more this year than last? For 40% of Millennials, the answer was simple. They had upped their skills when it came to making a budget, while 26% indicated that they had let go of recurring luxury expenses.
What about the other generations? For 32% of Gen Xers, their increased savings were due to an upturn in their salary, while for 26% their upswing in savings was linked to giving up a revolving luxury expense or they had gotten better at budgeting.
For 20% of Baby Boomers making more money was linked to saving more, while another 20% reported that budgeting or giving up some luxury spending made saving easier.
When it comes to the why of saving, having a specific goal in mind–whether that was to get in some travel or buy a new TV–made it easier for Millennials to put money away.
In this case, they also outdid their older counterparts, with 67% of Millennials indicating that having a goal inspired them, while 56% of Gen Xers and 49% of Baby Boomers said the same.
“While our survey shows clear differences in the savings habits across generations, it is important to remember that consumers should save at all points in their lives,” said Heather Roche, vice president of Deposits at Discover.
“People should start saving early in life and stay consistent in that practice. There are tools such as Discover’s financial goal calculator that can help give consumers a better understanding of how best to save in order to achieve their financial goals,” she added.