New Survey Shows 84 Percent of Millennials Are Worried About Making Ends Meet
Not having enough emergency funds tops the list across Generation X, Generation Y and Boomers
PARK RIDGE, Ill. (February, 16 2015) – While the U.S. economy has rebounded, the financial environment is still cloudy to more than 50 percent of Generation Y (18-34 years of age), Generation X (35-54 years of age) and Boomers (55+ years of age) who have financial concerns, according to a recent financial wellness survey conducted by Harris Poll on behalf of the Million Dollar Round Table (MDRT), The Premier Association of Financial Professionals®.
“It’s never too late to make resolutions and one area not to overlook is a person’s financial wellness. The findings in this survey reinforce the need for people to speak to a financial advisor and develop a tailored plan to accomplish their short and long-term financial goals,” said James Pittman, CLU, CFP, Secretary of MDRT.
- Top Financial Concern
According to the survey, 84 percent of Generation Y, 83 percent of Generation X and 66 percent of Boomers have financial concerns. The top financial concern among each generation is not having enough money in emergency savings funds, (51 percent of Generation Y, 50 percent of Generation X and 34 percent of Boomers). A close second for Generation Y (42 percent) and Boomers (31 percent) is not being able to pay off monthly bills, while almost half of Generation X (48 percent) fears not being able to retire when they want.
“Most people have a spending issue that drives their insecurity. Setting aside a small amount of money can quickly turn into a few hundred dollars that can be seed money for an emergency fund,” said MDRT’s First Vice President, Brian D. Heckert, CLU, ChFC.
- Feeling Secure with Current Finances
The study reveals 38 percent of Generation Y, 40 percent of Generation X and 29 percent of Boomers feel having no debt would make them most secure with their current finances. Having more financial education ranked lowest among each generation, Generation Y (4 percent), Generation X (1 percent) and Boomers (1 percent).
MDRT’s Second Vice President, Mark J. Hanna, CLU, ChFC, shared, “People have 100 percent of the ability to tackle their debt with the help of a financial advisor. Developing a budget and avoiding the use of consumer credit cards to pay for daily expenses will keep most people out of financial stress.”
- Debt Management
Among credit card, mortgage, student loan and car debt, all three generations rank credit card debt as the debt they would choose to pay off first (29 percent of Generation Y, 40 percent of Generation X and 46 percent of Boomers). Generation Y ranks paying off credit card debt slightly higher than paying off student loan debt (29 percent vs. 28 percent, respectively). Paying off mortgage debt is ranked second for Generation X (29 percent) and Boomers (30 percent).
According to Heckert, “Mortgage debt is the last debt typically recommended to pay off. A mortgage is secured by the house and usually has the least amount of interest of any loan. It’s important to first pay off high-interest debt such as credit cards.”
- Ways to Save
Respondents were asked what expenses they would cut first to save more money from a list including dining out and traveling less, reducing home, entertainment and clothing expenses, and buying less expensive groceries and brands. When asked how they would adjust their spending if they wanted to save more money, all three generations noted dining out less, Generation X (32 percent), Generation Y (32 percent) and Boomers (22 percent). Reducing entertainment and home expenses were the next two top saving areas.
“Saving just 5 percent on a monthly budget across all of these expenses could save the average family making $60,000 a year about $3,000 per year or $250 per month. That sum saved over a 10-year period would amount to a very nice fund for college or an addition to a retirement program,” Heckert said.
- Top Financial Advice
When asked what the most important piece of financial advice is, Millennials said it’s to start saving/investing (29 percent) and make a financial plan (28 percent). Their older counterparts noted paying off high-interest debt as most important, Generation X (28 percent) and Boomers (28 percent).
Interestingly, close to half (48 percent) of Generation X said not being able to retire is one of their top financial concerns, yet only a mere 9 percent indicated saving more for a comfortable retirement was the most important piece of financial advice to know.
According to the study, 50 percent of Generation Y, 35 percent of Generation X and 25 percent of Boomers have not done anything to prepare for retirement. Ten percent of Millennials note they have spoken to an advisor to prepare for retirement, compared to only 7 percent of Generation X.
“The hardest part of a financial plan is finding the time to get started. The new year is an excellent time to take control of your finances—and your future—with a financial plan and stick to it,” Hanna said.
The study was conducted online from December 29-31, 2014 among 2,041 U.S. adults ages 18+ (among which 523 are Gen Y/Millennials, 775 are Gen X, and 743 are Boomers) by Harris Poll on behalf of MDRT. Figures for age, sex, race/ethnicity, education, region and household income were weighted where necessary to bring them into line with their actual proportions in the population. For complete survey methodology, including weighting variables, please contact Heather Mulae.
Founded in 1927, the Million Dollar Round Table (MDRT), The Premier Association of Financial Professionals®, is a global, independent association of more than 42,000 of the world's leading life insurance and financial services professionals from more than 470 companies in 71 countries. MDRT members demonstrate exceptional professional knowledge, strict ethical conduct and outstanding client service. MDRT membership is recognized internationally as the standard of excellence in the life insurance and financial services business.
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