Millennials have had a rough road when it comes to money. Not only did they come of age during the Great Recession, which made jobs scarce and benefits even scarcer, but many saw their parents lose big time in the stock or real estate markets, which scared them off of making their own investments. Still, there's no more time for excuses, because millennials are all grown up and taking on increasing amounts of responsibility. From mortgages and parenthood to caring for aging parents, millennials are facing big financial milestones, whether they're ready or not.
According to Bank of America's Year-End Millennial Snapshot, which analyzed 2015 data from over 3,500 millennials, this young cohort of 20- and early 30-somethings continues to struggle financially: a tough job market, hesitancy to invest and student loans are just a few of the challenges in their way to prosperity. Still, the data suggest they are firmly committed to achieving financial independence one day. About half of millennials said the Great Recession changed the way they think about saving, investing and spending, with 40 percent saying they are more reluctant to invest in the stock market and 36 percent saying they are more hesitant to buy a house.
Yet over 80 percent of millennials are optimistic that they will be able to save and invest more in the future. "There is still a sense of optimism with the millennials. Although they're more hesitant, it's not stopping them. They feel good about the future," says John Jordan, client experience and programs executive for preferred and small business banking at Bank of America.
Many are also getting some big financial assists from their parents, and 46 percent of millennial-supporting parents say they don't plan to stop anytime soon.
A survey by the investment app Acorns of 1,020 millennials found that almost half of those surveyed said they were "treading water" financially or worse and would be in big trouble if they missed a paycheck. Most millennials (85 percent) said they haven't yet invested any money in the stock market, largely because they don't feel comfortable with it. While respondents said they wanted to save more, they found it difficult to do so given the pressures of living expenses and student loans.
"So many millennials are working on a contract basis or as freelancers; they don't have full-time benefits," says Jennifer Barrett, vice president of editorial and founding editor of Grow, a digital magazine published by Acorns and aimed at millennials. "They have to be more proactive ... [and] engage with finances much earlier than with earlier generations. Millennials are on their own in a lot of ways," she says.
That's why forming good money habits is a key part of creating financial stability for the millennial generation, Barrett adds. "We recommend that people get in the habit of investing early on," she says.
That's a message echoed by other millennial financial experts. "The biggest money mistake most people make – and I know I certainly did – is simply waiting too long to care," says David Weliver, 34, founder of the millennial finance website Money Under 30. When you're juggling your career, love life and other big issues, it's hard to also find time for your finances.
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