When it comes to managing money, millennials are putting their confidence squarely in themselves.
The Fall Merrill Edge report shows that millennials continue to distinguish themselves from the generations that came before them, with some surprisingly conservative philosophies about managing money.
“Today’s youngest generations are financially motivated by the lessons of the Great Recession,” said Aron Levine, head of Merrill Edge in a video about the report. “A decade later, millennials are proving to be confident yet conservative as they take saving and investing into their own hands.”
Millennials are putting their faith in their own stewardship, relying on a self-created and self-funded source: their savings account. That’s in contrast to Generation X and baby boomers, who expect to rely on employer-sponsored accounts such as 401(k)s, and baby boomers, who depend on employer pensions and government-funded programs such as Social Security.
To achieve their long-term savings goals, millennials are willing to sacrifice. More than half are cool with cutting back on going out, while 42% will skip vacation for a year to put those funds toward their nest egg instead.
They’re also putting off expensive life decisions to save up a few more bucks first. A third are postponing getting married or having children, and 36% are delaying buying a house.
“This millennial ‘Do-It-Myself’ mindset is also evident in their spending decisions, as many have started making sacrifices and delaying life milestones to have more money in the long run,” Levine said.
The Great Recession has had a huge impact on millennials’ approach to managing money. And most, 80%, expect to see another recession in their lifetime. That may be why 85% don’t take risks with their day-to-day investments. And almost half consider themselves more conservative than their parents when it comes to money.
“The majority of younger generations say they are ‘playing it safe’ with their investments,” Levine said, “and many millennials see themselves as more financially conservative than their parents and even their grandparents.”
But the upside of taking money matters into their own hands is that millennials feel more responsible (64% vs. 54% of other generations), forward-looking (64% vs. 52%), and successful (54% vs. 48%) than other generations.