NEW YORK, October 26, 2021 – The latest New York Life Wealth Watch survey found that nearly one-in-three Millennials (29%) reported having built a nest egg, saving an average of $4,241.21 due to paused costs such as deferred student loans, fewer daily expenses, and forgoing leases to move home with parents. Further, a higher number in this cohort now report being open to guidance from a financial professional.
The economic slowdown caused by the pandemic halted major costs like daycare, student loan payments, and rent, and even paused everyday costs like gym memberships, coffee runs, and going out to eat. These slowdowns in costs were the primary drivers of increased savings among younger generations, with 61% of Millennials experiencing pandemic-related paused expenses. Of this group, 48% of Millennials were able to save towards their financial goals over the past 18 months, compared to 45% of Baby Boomers and 41% of Gen Xers.
“Millennials, while relatively early in their careers, have already had to face two financial shocks in their lifetimes: the 2008 recession and now the COVID-19 pandemic. It’s a silver lining that nearly two-thirds of Millennials have had the chance to really think about their financial situation in the last 18 months,” said Aaron Ball, Senior Vice President, Head of Insurance Solutions, Service and Marketing, New York Life, “While some of the deferred expenses are starting to return, younger generations have had a rare opportunity to consider their financial position and began to establish nest eggs. I’m encouraged by the degree of financial self-care and openness to hands-on professional guidance as this group begins to plan for major life events.”
As a result of these paused expenses and savings, younger generations are more focused on their finances, with over half of total respondents saying they are thinking about their finances more this year compared to last year (58%). Across generations, the top three long-term financial goals reported were building emergency funds (41%), paying off credit card debt (32%) and being on track to retire and their desired age (28%). Because of this focus on achieving financial goals, in tandem with increased savings, younger generations are open to professional financial guidance. In fact, more than half of Gen Zers and Millennials said their nest egg savings made them more likely to consider getting help from a financial professional (53% and 51%, respectively) compared to just 33% of all adults.
Despite their newfound savings and willingness to work with a financial professional, the majority of Millennials’ lack confidence in knowing how to achieve their financial goals. When asked how best to describe their financial strategy, only 22% of Millennials said they “absolutely” know what they are doing and 41% said they “somewhat” know what they are doing, compared to 13% of Gen Zers who “absolutely” know and 37% who “somewhat” know.
“One misconception about establishing a financial strategy is the notion that people need to have their finances ‘figured out’ in order to work with a financial professional,” said Ball. “As Millennials and Gen Zers begin to reach financial and personal milestones, having the help of a trusted professional can help them feel more confident about their financial outlook, knowing they have an expert helping them adjust their financial priorities as expenses resume and the day-to-day routine may begin to shift.”
New York Life Wealth Watch’s newest results highlight trends that have emerged as Americans face the ongoing effects of the pandemic. Additional findings from the survey include:
Confidence differs along generational lines for long-term planning and emergency preparedness
Every generation has experienced some sort of savings as a result of paused expenses
Americans are anticipating resumed costs such as mortgage and rent expenses, student loan payments and childcare expenses
For a more in-depth look at the New York Life Wealth Watch survey findings, you can access the supplemental data sheet here.
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