According to a new survey from Discover, millennials are outperforming older generations when it comes to saving for their future. In a national study of 2,205 people, Discover finds that 81 percent of millennials are currently saving in some capacity, compared to 74 percent of Generation Xers and 77 percent of baby boomers.
Interestingly, 35 percent of millennials say they saved more in 2017 than the prior year. This compares to 25 percent of Generation Xers and 22 percent of baby boomers who saved more in 2017 compared to 2016.
Forty percent of millennials who saved more in 2017 compared to the year prior attribute the increase to a better understanding of how to set up a budget, followed by 26 percent saying that they cut a recurring luxury expense.
Millennials are also more likely than Generation Xers or baby boomers to put money aside when they are saving for a specific goal, such as a vacation or an auto repair. The study shows that 67 percent of millennial respondents are saving for something specific, while only 56 percent of Generation Xers and 49 percent of baby boomers noted 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."
How you save may be contingent on your age
Generational differences exist even when it comes to developing cost-saving strategies. For example, boomers are more likely than Generation Xers or millennials to cook at home and incorporate household efficiencies, millennials are more likely than other age groups to take public transportation and Generation Xers are more likely than millennials or baby boomers to use coupons.
More Than Three-Fourths of Americans Are Saving, with Nearly Half of Savers Using Multiple Resources
The survey also finds that 77 percent of Americans are currently saving in some capacity, with nearly half (48 percent) of those who save doing so through multiple savings resources. For example, 41 percent of those who use a savings account also use a checking account to save. Similarly, 34 percent of those who use a savings account also use a retirement account.
Nearly one-quarter of Americans aren't saving … and many don't know why
While more than three-fourths of Americans currently save, nearly one-fourth of consumers do not. When asked why they aren't saving, 35 percent of respondents say a lack of income is the main reason. Surprisingly, 17 percent say they don't have a reason for why they aren't saving. An additional 17 percent say they aren't saving due to bills that need to be paid, while 10 percent cite too many debts.
Among those who are not saving, 35 percent do not know which product or type of account they would use to save if they were to start.
"We understand that saving can sometimes feel daunting, which is why we've taken steps to provide consumers with helpful tips that are relevant for people in all financial situations," said Roche. "Doing research into the types of accounts you're looking for is a great place to start. Discover's product comparison tool and financial education blog will help you determine the best fit, whether you're interested in an online savings account, CD or IRA."
Millennials are individuals between the ages of 18 and 34 at the time they completed the survey. Generation Xers are individuals between the ages of 35 and 54 at the time they completed the survey. Baby boomers are individuals aged 55 or older at the time they completed the survey.