Millennials are getting older, but are they getting wiser? When it comes to their finances, the answer seems to be a pretty clear “no,” according to this new survey by Navy Federal Credit Union.
In fact, they seem to have become LESS wise with age, as far as their finances are concerned… The survey revealed that the number of millennials who think about their financial goals has declined by nearly a third between 2015 and 2017.
You’d think that the most educated generation in history would be wise enough to at least think about their financial goals!
And that isn’t the only area that saw a decrease since 2015. More details on that in a bit. The Navy Federal Credit Union survey compared the financial habits of both military and non-military millennials, and the results are interesting.
Millennials and personal finance
There are still no exact dates stating when the millennial generation starts and ends. However, most demographers define this generation as those born anytime between the early 1980s and the mid-1990s to early 2000s.
The Great Recession was particularly hard on this group because the job market was bleak when they finished college. Now that the job market is looking up and millennials are in the workforce, they aren’t dedicating very much thought to their money and how to manage it.
With a large amount of debt and numerous monthly expenses, most millennials are currently unsatisfied with their financial situation, according to the survey. In fact, only 22% of millennials surveyed said they were satisfied with their current financial situation.
But there’s more. Here’s a look at five key findings from the Navy Federal Credit Union survey.
1) Millennials’ financial habits have gotten worse
In addition to the decrease in the number of millennials who think about their financial goals, the survey revealed a decrease in other areas as well.
- Has a household budget they review every year:
Non-military: 19% in 2017, compared to 30% in 2015
Military: 23% in 2017, compared to 43% in 2015
- Feels confident they know enough about managing their finances to meet financial goals:
Non-military: 28% in 2017, compared to 39% in 2015
Military: 29% in 2017, compared to 47% in 2015
- Has thought about their financial goals or what they should be:
Non-military: 42% in 2017, compared to 53% in 2015
Military: 33% in 2017, compared to 56% in 2015
- Has checked their credit score within the last year:
Non-military: 39% in 2017, compared to 47% in 2015
Military: 39% in 2017, compared to 54% in 2015
2) Millennials are delaying life events
More millennials are delaying life events and financial commitments as a result of being unsatisfied with their current financial situation.
For example, 26% of non-military and 35% of military millennials are delaying buying a car. 26% of non-military and 32% of military millennials are also delaying buying a home. In fact, 34% of millennials surveyed still live with their parents.
That being said, however, military and veteran millennials are more likely to own a home and least likely to still live with their parents, which brings us to our third key finding.
3) Military millennials more financially confident and mature
Despite having similar financial habits, the study revealed that military and veteran millennials have higher incomes, are more likely to have kids at home, feel more confident in their financial situation, and are more likely to own a home.
The study revealed that only 15% of military millennials live with their parents (compared to 20% of non-military millennials). In addition to that, 65% of military millennials own their home.
The average household income for military millennials in this study was $83,939 in 2017, compared to an average household income of $68,652 for non-military millennials.
Katie Miller, senior vice president of membership at Navy Federal, explains why they might be ahead of their non-military peers: “Military millennials have had to ‘grow up’ faster than their non-military counterparts. As a result, they’re financially more mature. They’re moving into careers sooner and getting steady paychecks a lot earlier, so they’ve had to establish household budgets and handle money at a faster pace than general population Millennials.”
However, military millennials surveyed also had more debt. For example, the survey revealed non-military millennials had approximately $4,000 in credit card debt compared to a little over $10,000 for those in the military.
4) Millennials are still optimistic about the future
Despite these findings, millennials are optimistic about their financial future.
- 74% of non-military and 91% of military millennials say that they’re currently on track to meet their financial goals.
- 59% of non-military and 82% of military millennials are confident that the U.S. economy will allow them the opportunity to meet their financial goals.
- 66% of non-military and 82% of military millennials are confident they will save more in 2017 than they did in 2016.
- 74% of non-military and 81% of military millennials say they are on track to pay down their debt in the next five years.
Miller is positive about their outlook as well. She says, “Millennials have the right attitude when it comes to their finances. Nine out of 10 millennials say savings is a top priority. And more than half of millennials are hopeful about the economy and their ability to save more this year. Millennials’ optimism, paired with resources a financial institution can provide, bodes well for their financial futures.”
5) Millennials don’t know how to save
While saving is clearly a key priority for millennials, the problem is they don’t know how to do it. In fact, only 18% of non-military and 27% of military millennials say they’ve saved at least three months worth of pay in an emergency fund.
The study also revealed that few millennials use tools to help them manage their savings.
It’s hard to say how accurate this report is when describing millennials personal finance skills. One thing we can agree on is that, regardless of our age, we can all benefit from improving our personal finance IQ.
The next step
If you’re a Millennial, military or otherwise, take advantage of the resources out there to help you get on track for the future.
One of the best and easiest ways to get started is to use a personal finance/money management app. Click here to review and compare all the top personal finance apps to find the best one for you.