Every responsible parent has, at one time or another, sat their teenager down and had The Talk. No, not that talk — the one about money.
You know how it goes: Budget your expenses, don’t spend wildly, save for the future. It’s advice that applies to anybody, but it’s hard to get young people to take it seriously.
Or maybe not. A recent survey done for T. Rowe Price, the Baltimore, Md.-based global investment firm, indicated that millennials — people between the ages of 18 and 33 are doing as well as, if not better than, baby boomers — ages 51 to 69 — in several key areas regarding saving, spending and investing for retirement. The study was based on online interviews with 4,308 workers and retirees; most are contributing or did contribute to a 401(k) savings plan.
The survey showed that more millennials than baby boomers track expenses carefully, 75 percent vs. 64 percent, and live according to a budget, 67 percent vs. 55 percent. It revealed that more millennials than boomers, 40 percent compared with 21 percent, have increased their retirement savings within the past year. And despite being decades from retirement, millennials are saving almost as much of their salary as boomers.
These numbers should be a relief to the country. The millennials “are exhibiting financial discipline in managing their spending and are defying stereotypes that this generation is prone to spendthrift, shortsighted thinking,” said Anne Coveney, a T. Rowe Price senior manager.
It’s a good thing more young people are taking their finances seriously since it’s unlikely that their future will come with a traditional pension or the level of Social Security benefits received by their parents. And who knows? This responsible generation may be just the antidote for the nation’s $18 trillion debt.