Millennials are caught in a tug-of-war between their long-term financial aspirations and the lure of spending now, a recent Northwestern Mutual study found. When has that ever not been the case for young people?
The company, in its 2017 Planning & Progress Study, found that nearly two thirds of Millennials (64%) recognize that they need a financial plan that anticipates up and down cycles compared to 55% Gen X and 43% Boomers.
Nearly 1 in 4 (23%) view themselves as “highly disciplined” financial planners (compared to 15% Gen X and 19% Boomers) but are still substantially more likely than Gen X and Boomers to say that their financial planning needs improvement (82% Millennials relative to 71% Gen X and 54% Boomers).
But there’s hope yet
Millennials, more than other generations, view “starting to save early” as a financial best practice where they excel (34% Millennials, 24% Gen X, 17% Boomers).
“It’s encouraging to see that this generation is committed to thinking ahead and takes pride in establishing positive financial habits,” said Rebekah Barsch, vice president of planning, Northwestern Mutual.
The research released today is part of Northwestern Mutual’s 2017 Planning & Progress Study – an annual research project exploring Americans’ attitudes and behaviors toward finances and planning.
Financial balancing act takes a physical and emotional toll
The pressure of trying to meet competing financial and lifestyle priorities appears to be making Millennials significantly more professionally and financially anxious than other age groups.
More than half (53%) of Millennials experience high to moderate anxiety about losing their job, compared to less than a third of Gen Pop (29%). The same is true for level of savings (67% Millennials vs 50% Gen Pop) and income (69% Millennials vs 48% Gen Pop).
And the financial stress Millennials are feeling is having a pronounced impact on their health, careers and social lives:
- 28% say that anxiety impacts their job performance daily, weekly or monthly – more than twice the rate of Gen Pop (12%).
- Nearly one quarter (23%) say financial anxiety makes them physically ill weekly or monthly compared to just 12% Gen Pop.
- Nearly 2 in 10 (18%) feel depressed due to financial anxiety on a weekly basis (twice as often as Gen Pop – 8%).
- 24% say financial anxiety affects their relationship with a spouse/partner hourly, daily or weekly (10% Gen Pop) while a similar number says it has caused them to miss social events and opportunities (25% Millennials, 10% Gen Pop).
If you’d like to put a real savings plan together, go see your credit union today. CUs are not-for-profit, and don’t have an incentive to “steer” you into particular products. They do what’s best for you.