While a majority of young adults say they have absorbed the lessons from the financial collapse six years ago, fewer are putting them into practice. The reasons are tied up in beliefs about investing, the burden of debt and income inequality between young men and women.
Save early and often
A Wells Fargo survey of millennials (age 22 to 33), found that 80 percent believe in saving now in order to survive economic problems later. However, only 55 percent are currently saving and 56 percent say they are living paycheck to paycheck.
There is a gender gap in both savings rate and income in the survey. While 61 percent of young men say they are saving, only 50 percent of women are, which could be attributed to the fact that median household income reported by men is $61,000, versus $45,000 for women.
"The silver lining of the recession that started over five years ago is that a majority of millennials get that saving is a necessity and even equate it with 'surviving' tough times," Karen Wimbish, director of retail retirement at Wells Fargo, said in a release. "But millennial women are starting out their working lives making far less than men and, as a consequence, are saving less and feeling less contentment at the start of their working lives."
Higher education debt is worth it
Debt is a problem for both young men and women, but women are feeling the burden more, according to the survey. Forty-five percent of young women describe their debt as "overwhelming," versus 33 percent of young men who say the same.
Student loan debt is of highest concern for both millennial genders, yet three-quarters believe higher education makes a positive difference in their paycheck.
Median household income for college graduates is $72,800, versus $34,700 for those without a higher degree. The investable assets of the college-educated group are $43,300, versus $21,600 for non-graduates.
No reason to fear investing
Millennials have taken note of the stock market's bull run since the recession, with 59 percent saying it's the best place to put their retirement money. That's up roughly 10 percentage points from a year ago.
Once again, there are gender differences, with only 49 percent of millennial women believing in the stock market, versus 69 percent of men.
Overall, millennials are a financially confident group, with 68 percent saying they expect their standard of living before retirement to be better than that of their parents and 72 percent saying they are confident they will be able to save enough to create the lifestyle they want in the future.
"I was pleased to see that millennials are warming up to the stock market, yet concerned to see the huge difference in sentiment among women, who should be on par with men at this stage," said Wimbish. "Still there's about a third who are underinvested in stocks or all in cash, and a quarter who aren't even sure what they're invested in. Optimism doesn't always translate into investing in the stock market for retirement."
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