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Today we have a guest post from Amy Nickson, a web enthusiast! Amy graduated from Oglethorpe University, Atlanta, Georgia and now works as a financial writer, sharing her expertise through her crisp and well researched articles based on money management, money saving ideas and debt. You can follow her on Oak View Law Group where she shares her expertise on personal finance field.

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The statement, “Millennials are bad with money”, is now a myth.  

Most of the people point out the millennials are irresponsible money managers. They are excessively brand familiar, party lovers and shopping addicts.

Yes, millennials spend a lot, but they also save magnificently! It’s not just me, the stats are also indicating that today’s generation is handling money very well.

Matt Sadowsky, director of the retirement for TD Ameritrade said, “Millennials are doing something fantastic when it comes to budgeting,”

As per a  survey report of Transamerica, 2016, 72% of millennials are trying to build their retirement fund, either on their own or through their workplace retirement plan.

Also, a large number of millennials have started saving money early at the age of 22.

Many financial experts are claiming that Millennials are more efficient with money than the previous generation. Well, to some extent the comparison is invalid as the economic situation has changed.

11 Ways millennials are spending and saving smarter

But, millennials are  spending and saving smarter than before.

How are they playing the money game to win the financial success?

Let’s have a look:

How are millennials spending money differently than the previous generation?

  1. Millennials research before spending money

Whether it is a phone or a furniture, today’s generation will not buy anything without analysing the features and comparing the prices. They search for a good deal before buying electronics, gifts, clothes, even home and kitchen supplies.

They believe in spending money that is worthy. They always try to value their hard-earned money.

  1. Millennials know where their money is going

Millennials understand the importance of budgeting. They know, with the help of a personal budget, they can track their money.  As per the TD Ameritrade report, 8 in 10 millennials follow a budget, compared to 61% of baby boomers.

Yes, millennials know that it is impossible to track all the expenditures they do in a whole month. And without a neat picture of their spending, they will never be able to cut down unnecessary expenses that suck their hard-earned earning. Thus, they prefer a budget, where they prepare a list of their monthly expenditures.

They can easily create their budget using a budgeting app in their smartphone. This way, they are managing their expenses without going broke. They can understand which expenses to eliminate or add.

  1. Millennials know debts are forbidden

Millennials entered adulthood experiencing one of the worst financial meltdowns in the history (Great Recession). Bruce Drake, the senior editor at Pew Research Center’s wrote, “Millennials are the first in the modern era to have higher levels of student loan debt, poverty and unemployment and lower levels of wealth and personal income than their two immediate predecessor generations had at the same age.”

11 Ways millennials are spending and saving smarter

The worst economy made them aware of the pitfall of debts, especially credit card debt.

According to a survey conducted by creditcards.com, “Almost 36% of millennials don’t keep credit cards at all. Credit card debt for people younger than 35 is the lowest, it has been since 1989.”

They only prefer using credit staying within the credit limit. They make credit card payments on time. However, most of the millennials take out a student loan to finish their higher studies.  The education cost is becoming sky-high. However, they are dealing with their financial obligation smartly and trying to live a life peacefully.

  1. Millennials purchase a home that they can afford

When it comes to buying a home, millennials buy within their means. Our previous generation thought – the bigger, the better. But a bigger home had costed them dearly and many of them were unable to pay off the mortgage. Today’s generation knows that an unnecessarily bigger home is a burden. They need to spend a lot for its maintenance.

  1. Millennials adopt new payment technology easily

The previous generation had only 3 ways to pay for purchases – cash, check, or charge, but today’s generations are using several paperless payment options where physical money is not required.

Barry McCarthy, executive VP of network and security solutions at First Data, said, “With 51% of millennials favouring new payment technologies over cash, debit, and credit cards versus 33% of Gen X-ers and 17% of Baby Boomers, it’s no surprise that money management among millennials — whether they’re just starting college or beginning to build a family nest egg — is different.”

How are millennials saving money differently than a previous generation?

  1. Millennials never miss saving deals

The Internet and smartphone combination is becoming very useful hacks for saving money. There are always  good deals awaiting in different shopping portals. Today’s generation never let the good deals pass by.

They keep the shopping app in their smartphone to buy the necessary items on sale. Thus, they save a significant amount on every purchase.

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11 Ways millennials are spending and saving smarter

  1. Millennials plan about their financial future

Millennials are concerned about their future as well. Besides short-term planning, they value long-term financial planning too. They set aside money not only for a trip, but also for securing their future.

Besides baby boomers, millennials are also saving money for their retirement.

According to a Transamerica report in the past year, the retirement savings rate were: Millennials – 40%)

Boomers – 28%) a

Generation Xers – 30%).

To build up a fat retirement fund, millennials are taking advantage of  401(k) plan, auto escalation (that automatically increases the amount they contribute to their retirement fund every year), and investments (stock, bond, and mutual fund).

  1. Millennials start saving earlier

The statement, “Millennials are bad money savers” is no longer true.

As per the Natixis Global Asset Management report, “Millennials on average began saving for retirement four to eight years sooner than Baby Boomers or Generation X savers”.

According to an August 2016 survey conducted by the Transamerica, “A 7% median savings rate among millennials who participate in their workplace retirement plans.”

They know, there is no actual age to start saving; the sooner, the better. They know that early bird catches the worm. If they start saving money earlier, they can achieve financial goal earlier.

  1. Millennials work hard to earn and save more

Most of the millennials believe in working hard to earn as much as possible. They prefer to keep a second source of income while doing a full-time job.

Thus, they are able to save a good amount of money each month to balance their lifestyle and retirement saving.

11 Ways millennials are spending and saving smarter

  1. Millennials keep multiple bank accounts for several purposes

Millennials always play a safe game. They want to save 20% of their monthly income into a savings account, which add interest and grows with time .

Also, they know any emergency (accident, job loss, unemployment) can occur at any time. Thus, they prefer to keep an emergency account where they establish a good saving to combat any unforeseen emergency.

They buy life insurance, medical insurance, etc. to avoid taking out a loan while in need.

  1. Millennials stay away from debts

Millennials plan a lot, thus, they don’t need to incur additional debts all of a sudden. As a result, they are more focused towards securing their financial future.

They say “no” to a payday loan as it comes with higher interest rate. They prefer to save money first to achieve the need.

11 Ways Millennials are saving money and spending less than baby-boomers. Check out why millennials may be better at budgeting than any other generation!


Lastly, it is true that millennials are making smart money moves while dealing with stagnant wages and mounting student loan debt issue. But, the baby boomers also didn’t get the benefit of technology and the internet like today’s generation.

So, it can be concluded by saying that the spending and saving habits of two generations (millennials and baby boomers) are not justified as the economical situation of the two time gaps is very different. Their financial goals are much the same, i.e., financial security and comfort for their retirement.