Reports describing the financial health of millennials usually strike a cautionary tone. This generation—commonly defined as people born between 1981 and 1996—often is described as weighed down by debt, saving too little, and investing too conservatively. However, Schwab’s 2018 Modern Wealth Index survey painted a more optimistic picture.

Among the study’s highlights:

• Nearly one-third (31 percent) of millennials said they have determined their financial goals and have a written plan. By contrast, just 20 percent of Generation X (born 1965-1980) and 22 percent of baby boomers (1946-1964) said the same.
• Millennials also are more likely than their older counterparts to have specific savings goals, work with an investment advisor, and, among those who invest, regularly rebalance their portfolio.


Millennials in the Workforce

Millennials became the largest generation in the workforce in 2016, according to a 2018 study by the Pew Research Center. As of 2017, about 56 million members of the generation either are working or actively seeking work, compared to 53 million Gen Xers and 41 million baby boomers. Gen X plateaued starting around the year 2000, while baby boomers have seen a steady decline from a peak of 66 million in 1997. Millennials saw their number in the workforce rise from less than 40 million to its current number in less than a decade.



Of course, all is not perfectly well on the millennial money front. The generation does, in fact, have a lot of debt. According to a 2018 study by NBC News/GenForward, about 75 percent of millennials have debt—mostly credit card balances and student loans, with 25 percent carrying more than $30,000 of debt and 11 percent trying to pay back more than $100,000.

So heavy is their debt burden that more than half of all millennials say it has made them put off buying a house, saving for retirement, or getting married. Debt factored prominently in the Schwab study as well, with 36 percent of millennials saying student loans make it a challenge for them to save money—far more than Gen Xers and baby boomers.



It isn’t just debt getting in the way of millennials saving for the future. Their long-term savings goals simply appear to be less important to them than near-term spending objectives. The Schwab study found millennials to be more likely than older generations to say significant expenditures on experiences (like big vacations) are worth it, even if that spending may delay retirement.

Many millennials acknowledge that short-term—even indulgent—spending is more important to them than setting money aside for the future. Asked about obstacles they face when trying to save money for future goals, they were more likely than their older counterparts to cite lifestyle items like dinners out and vacations. Other research has found that millennials eat out more often than other generations and that 87 percent say they’re willing to splurge on a nice meal out even if money is tight.

LendEdu, a student loan marketplace, found in a 2018 survey of 1,000 millennials that more than 25 percent of the generation spends more on coffee each month than on retirement savings, about one-third spend more on clothes than on retirement, and almost half of respondents reported spending more on dining out than on retirement.

When asked what they’d be willing to do in order to save money, millennials were less likely than older generations to say they’d be willing to give up shopping at specialty grocery stores or use public transportation instead of a car service such as Uber.


Financial Tips

Millennials have an asset that people in older generations wish they had more of—time. However, millennials need to make the most of that time by changing some spending habits to improve their financial situations through more planning and more saving:

Plan to succeed. It’s great that millennials are more likely than older generations to have a plan for their financial goals, but it’s also important to have a plan for day-to-day cash flow. Free online tools like can help with planning for the best use of income, allocating money for needs, wants, and future.
Be done with debt sooner than later. Student loans typically are designed with a 10-year payoff. That’s a long time to let such debt hang around. There’s never a pre-payment penalty with student loans, so it’s a good add a little more to minimum required payments and ditch that debt as soon as possible. Run some numbers and find out how much more quickly you’ll be out of debt if you add another $25, $50, or $75 to your monthly payments.
Put some away. After building an emergency fund with at least three months’ worth of essential living expenses, start investing. Consider this: If you’re 18 and want to build a million-dollar nest egg by the time you’re 70, investing just $71 per month should get you there assuming a 9 percent average annual return. However, if you wait until you’re 28, it’ll take $176 per month, and if you wait until you’re 38, it’ll take $448.