If you’re like many millennials, you think the safest way to
handle money is keeping it in cash. For those 21 to 36 years old,
it’s seen as a better choice than sinking it into the stock market,
according to a 1st-quarter 2014 UBS Investor Watch report.
If you’re a millennial, you’re from the generation that’s been
scarred by the Great Recession, making you part of the most
financially conservative generation since the Great Depression, the
Although you like cash, you’re probably not carrying around
stacks of it to pay your bills. So, how do you compare with other
generations when it comes to banking? And what do you really know
about investing that hard-earned cash? Take our quiz and find out
how “millennial” you are with your money.
The higher your credit score, the lower the interest rate you
may get. Check your score for free at myBankrate.
A. Who needs a bank branch? I do everything online.
B. I go to the bank with the closest branch.
Answer: A. About 9 in 10
millennials bank online, and 72% are active users of mobile
banking, according to the 2014 North America Consumer Digital
Banking Survey conducted by Accenture. Millennials also are more
likely than other generations to be willing to switch to banks with
no branch locations.
A. I have a wallet full of credit cards and use them regularly
when I shop.
B. I'm happy with my debit card. I already have enough
Answer: B. Millennials have fewer
credit cards, on average, than other generations -- about 1.5
credit cards per person, according to Experian -- and they carry
lower amounts of debt on those cards. But, you've got plenty of
other kinds of debt, such as school loans and car loans.
A. Who can save? Everything I earn goes to pay my bills.
B. I'm nearing the 6-month mark of emergency savings.
Answer: B. Experts say you should
have 3 to 6 months' worth of expenses set aside for emergency
savings, but one-quarter of Americans haven't managed to save a
So, it will probably come as a shock to older generations that 18-
to 30-year-olds are most likely to have 5 months' worth of
emergency savings squirreled away. Bankrate's chief financial
analyst Greg McBride, CFA, says that's because many millennials
have lower expenses and are still in college, or live with roomies
or Mom and Dad.
A. I still have a long way to go, but I'm off to a strong
B. I'll never be able to retire.
Answer: A. Because millennials have
seen the toll that the Great Recession took on their parents, many
are already socking away money for retirement. And they're starting
early -- at age 22.
A 2014 survey by the Transamerica Center for Retirement Studies
found that 70% of millennials are saving for retirement in an
employer-sponsored plan and/or outside of work. They're
contributing a median 8% of their income to 401(k)s or similar
plans each year and the median household retirement savings is
A. I'd go out and purchase hot stocks.
B. Any extra cash goes to paying off my debt.
Answer: B. Millennials tend to be
overloaded with debt. In fact, a student who graduated from college
in 2013 was burdened with an average of $28,400 in school loans,
the Project on Student Debt and College InSight found.
A survey by financial services company UBS found more than 4 in 10
millennials would use a windfall to pay off debt, compared with
just 15% of non-millennials. Only 12% would invest it in the market
compared with one-third of those from other generations.
A. I trust my financial adviser to look out for my best
B. Father knows best. Let me talk to my parents, my spouse or
Answer: B. Millennials have great
faith in their family and friends to give them the best financial
advice. A UBS survey found that 41% of millennials will seek advice
from their parents. Meanwhile, just 14% of millennials will seek
advice from a financial adviser, compared with 40% of respondents
from other generations.
A. I keep a hefty balance in my checking account so I can
avoid monthly service fees.
B. I won't bank at a financial institution that charges
Answer: B. The era of free checking
accounts at big banks is nearly dead, which is anathema to
millennials. About 83% say fees are a key consideration when
choosing a bank or credit union, according to th!nk Finance, a
Texas data company that serves lenders.