Millennials, long reviled for being flighty and irresponsible, are now the generation that’s socking the most money away. Two thirds of Millennials are now saving more than 5% of their income, up from the 42% who were doing so a year ago, according to a new Bankrate study.
In comparison, only half of adults age 30 and up are saving at that rate. And 29% of Millennials are saving more than 10% of their incomes, compared to 22% last year.
“The good news is that many working Americans, Millennials in particular, are saving, and saving more than last year, said Greg McBride, Bankrate.com’s chief financial analyst, in a press release. “The bad news is that 21% of employed Americans claim not to be saving any of their paycheck.”
With those savings rates, maybe Millennials have something to teach the rest of America about building a better nest egg. Here's how a few Millennials are piling up the cash:
“I calculate the number of hours I would have to work before buying anything. For example, if I see the brand new iPhone that I would like to purchase, I calculate the number of hours I would have to work for it—close to 40 hours—which would limit impulsive spending. This allows me to have excess cash at the end of the month, which goes directly to my savings account.” –AJ Saleem, 30, owner of startup tutoring company Suprex Learning in Houston
“In high school I read a classic book called The Richest Man in Babylon. The book talks about the concept of paying yourself the first 10% to 20% of each month’s earnings before you pay any of your bills. I'm so glad that I absorbed this book at a young age, because I practiced its teachings over the course of 15 years and have now acquired 12 paid-for rental homes.” –Bryan Clayton, 34, CEO of GreenPal in Nashville, TN
“One of the easiest ways that my husband and I have increased our savings rate is by saving more of our salary increase. Instead of substantially increasing our lifestyle when we started making more money, we increased our savings. We currently save 10% of our income for retirement and 5% for a rental property that will hopefully bring us passive income. We do allow ourselves to spend slightly more, but we've always socked away those salary increases.” --Zina Kumok, 27, writer and blogger at DebtFreeAfterThree.com.
“I set up several savings accounts with my bank: vacation fund, house fund, etc. Then I have my bank automatically transfer that money out of my checking account each month into those various savings accounts. I don’t even have to think about it.” –Katie Butler, 25, marketing coordinator in Houston, TX
“The biggest saving secret of mine is the Dave Ramsey envelope system, where I only pay in cash and budget for the month. If I want something, I go to the respective envelope. If I don’t have money in the envelope because I spent it earlier in the month, then that item has to wait until next month. By using this system for only a year, I was able to save enough to move from a tiny apartment into a two-bedroom house, pay off my credit card debt and pay off a large amount of my student debt.” –Crystal Ignatowski, 25, marketing content developer from Keizer, OR
“A buddy of mine told me about this app called Acorns and I haven’t looked back since. With Acorns, it links to your checking account and it rounds up your transactions and invests that in the market. For instance, if I buy a Starbucks latte for $3.70, it takes that 30 cents and invests it. It’s awesome.” –Kyle McMahon, 28, recording artist, speaker and writer
“A few years ago, I met the woman I was going to marry and had no way to buy her a ring. As a way to supplement my income, I purchased 57 Rubbermaid tubs full of old books off of Craigslist and opened an online bookstore. Four years later, BuzzBookstore.com is thriving and the additional income allowed me to buy the ring, fund a house down payment, and start investing in a stock portfolio for our future. By adding a new revenue stream that never goes towards monthly expenses like mortgage, food, or utilities, I was able to save for the things that really matter.” –Ben Pagel, 33, Washington, D.C.
“I've been using Digit, a mobile savings app, and have saved a whopping $963.74 since joining in October 2015. I like it because I don't truly notice when I'm saving; the app transfers very small amounts—roughly $5 to $10—every few days based on my earning and spending habits. The little savings definitely add up.” –Jessica Elle, 26, Louisville, KY
“I have increased my savings in the last year with comprehensive food saving—cutting out restaurants is the biggest—hypermiling, offsetting my car costs with rideshare driving, and utilizing free events through meetups and guides of things to do in Boston that are free. Lastly I have started buying lightly used high-end good quality clothing (Brooks Brothers, Bonobos, etc.) through eBay.” –Brad Hines, 32, digital marketing and social media strategist in Boston
“I find it really helps to have a completely separate savings account so it’s not so fluid to transfer money over immediately whenever you need it. When we log in to our checking and see the money in our savings account, it almost feels like it's available for us to spend. Get your savings into a high yield savings account—out of sight, out of mind.” –Ashley Feinstein Gerstley, 29, founder of The Fiscal Femme in New York City
“I've personally increased the amount of money I’m saving by reducing the amount of vacations I take. The YOLO mentality is toxic for your savings. Going to Thailand is awesome. You know what’s even more awesome? Buying a house at 30.” –Matthew Mercuri, 25, digital marketing manager in Montreal, Canada.
