Millennials' Savings Rate Climbs For First Time In A Decade

America’s beleaguered millennials received a rare gift on Tuesday: A scrap of good news. Even with the aggregate student debt burden eclipsing the $1 trillion mark, and wages pressures across the US economy remaining relatively subdued, a new survey from claims that Americans’ savings habits are improving for the first time in a decade, with the strongest gains recorded among the 18-26 demographic.

Indeed, after almost a decade, Americans may finally be turning the corner on saving money. More than 30 percent of them say they have enough tucked away to cover six months’ worth of expenses—a seven-year high for this measure of financial calamity preparedness, a financial planning favorite, according to a Bloomberg report on the data.

“Ever since the recession, we’ve noticed in surveys that people realize how important it is to have emergency savings, but for so many years post-recession they just weren’t making any progress,” said Greg McBride, chief financial analyst at, which released the survey on Tuesday. Now a broader swath of people are finally making headway, he said.

“[A poll] of 1,003 Americans, conducted by Princeton Survey Research Associates International [at the behest of Bankrate], showed impressive savings habits among millennials, particularly younger ones, McBride said. Thirty-one percent of Americans age 18-26 have enough saved to cover three to five months’ worth of expenses. (Some, however, are likely living at home or with roommates—or counting their trust funds.)


“Millennials have a savings discipline that the preceding generations lacked,” he said.


“They have a greater aversion to debt, they’re not as consumption-focused, and they have a greater propensity toward saving than we’ve seen in some time.”

To be sure, millennials’ quest to save money is made easier by living with their parents, as nearly a third of them do, allowing them to save on rent, which is rising at nearly twice the rate of inflation. Millennials' age bestows another advantage: When they lose their jobs, they typically don’t struggle with long stretches of unemployment, unlike their parents (Americans aged 53-62) who are finding it increasingly difficult to secure a new job after being fired or laid off. Given their age, savings rates among this demographic – which Bloomberg has labeled “the young Boomers” - are particularly concerning, as only 32 percent say they have nothing set aside, while the same percentage say they have enough to cover at least six months.

In terms of savings, Boomers were hit the hardest by the financial crisis, which wiped out the financial cushion – not to mention jobs - for many members of the demographic. Those who managed to stay employed, however, still have a cash hoard in place.

As McBride tells it, many Americans made solid progress paying down debt or refinancing after the recession. Now they’re are putting more money into savings, but they’re also starting to add to their debt burden.

“It’s gone almost full circle,” McBride said. “People started feeling better about their level of debt several years ago, but in the past 12 to 18 months, debt loads started to grow again, and now the comfort level people have with their debt isn’t as strong.”

When comparing the savings rate as a percentage of disposable income, the picture is decidedly less rosy. That rate has turned up a bit and is well above its 2007 levels. But at the same time, debt on household balance sheets has been building.

Here are some more highlights from the report via Bloomberg:

  • “The percentage of Americans with some savings, but not enough to cover three months’ worth of expenses, rose to 20 percent, up from 18 percent last year. The percentage of Americans with enough to cover expenses for three to five months inched up to 17 percent from 16 percent.”
  • “As you’d expect, older boomers, those age 63 and older, are the most likely to have at least six months’ of expenses saved for an emergency, coming in at 44 percent. Seventeen percent of them reported having nothing set aside for an emergency.”
  • “…almost a third of Generation X—those people between their late 30s and mid-50s—aren’t doing that great. Some 28 percent say they have some savings, but not enough to pay three months’ of expenses.”
  • “A look at emergency savings by region shows the Midwest with the highest percentage of Americans saying they have enough to cover six months of bills. Southerners have the least.”
  • “Lower- to middle-income households, those making $30,000 to $50,000 a year, are more likely to have an adequate cushion than to have no savings at all. Twenty-four percent of these households had saved enough to cover six months’ of expenses, the survey found. An earlier survey found that 22 percent of these households were saving more than 10 percent of their annual income.”

Household debt has returned to record highs, according to the most recent quarterly report from the New York Federal Reserve. Total debt held by US households reached $12.73 trillion during the first quarter of 2017, finally surpassing its $12.68 trillion peak reached during the recession in. This marked a$479 billion increase from a year ago, and up $149 billion from Q4 2016 after 11 consecutive quarters of growth since the deleveraging period immediately following the Great Recession.

Here’s a breakdown of the Fed’s data:

  • Total household indebtedness stood at $12.73 trillion as of March 31, 2017. This increase put overall household debt $50 billion above its previous peak set in the third quarter of 2008 and 14.1 percent above the trough set in the second quarter of 2013.
  • Mortgage balances, the largest component of household debt, reached $8.63 trillion as of March 31, a $147 billion uptick from the fourth quarter of 2016.
  • Balances on home equity lines of credit fell slightly in the first quarter, down $17 billion to $456 billion.
  • Non-housing debt saw mixed changes—an increase of $10 billion in auto loans and $34 billion in student loan balances, and a $15 billion drop in credit card balances.
  • Despite the new nominal all-time high, on a relative basis, household debt remained below past levels in relation to the size of the overall U.S. economy, and in Q1 total debt was 66.9% of GDP, nearly 20% lower compared to 85.4% of GDP in Q3 of 2008.



thevekja Wed, 06/21/2017 - 23:26 Permalink

Debt free but also asset free. Priced out of the housing market and watching the slow implosion of American enterprise has disenfranchised a great deal of my generation ('90-'00). Much like the young Japanese realized 10 years ago, our average standard of living will be much lower than our parents, and most of it is due to forces outside of personal control.

The financial cost of having a child to two working class parents is astronomical, so more young people are abandoning the prospect altogether. We are realizing how the debt serfdom cycle ends and are opting out of the raw deal

Pigeon Wed, 06/21/2017 - 23:25 Permalink

8 years of Obamaville - living w/ free room, board, car, utilities and insurance courtesy Mom & Pop. Yeah, they saved a few months' living "expenses". Which is what? Gas, beer  and Starbucks  $$?

oldguyonBMXbike (not verified) Wed, 06/21/2017 - 23:38 Permalink

I just about got all of my debt paid off.  I'm at that point where it seems like I'm actually about to start getting something for my tireless labor. It's a great feeling.  Like digging your way out of a shallow grave.

Dazman (not verified) Thu, 06/22/2017 - 00:11 Permalink

But I thought that something like 65% couldn't afford a simple $400 emergency expense!But 31% can do 6 months or more from savings?One of these must be incorrect.

captain-nemo Thu, 06/22/2017 - 00:13 Permalink

So maybe things are not so bad in America after all. So why are people complaining?It turns out they have money saved , business are doing good, unemployment are going down , stocks and bourses are all time high and Trump wants to make health insurance cheaper and tax cuts bigger than ever. Meanwhile, interest rates are still close to zero and the sun is still shining. The next thing we probably hear is that the pensions funds have lots of money as well. Maybe America even can afford a few wars too. Funny how everything is just swell just by telling people so.

indygo55 Thu, 06/22/2017 - 01:09 Permalink

Its all bull shit. The poll even admits many are still living with their parents. Its all about the confidence. They rig these polls just like they rig all the polls to create the illusion that everything is OK. Its not OK. I see it every day. Financial repression at work everywhere and the illusion that the opposite is happening is being displayed everywhere. Its all bull shit. 

Boca Thu, 06/22/2017 - 01:14 Permalink

Kids today are just plan stupid with their money, I know I have 2 teenagers.  Can't legally have a job now in California until your 16, BS, I worked part time since I was 10, it taught me the value of a dollar, expecially since my parents were frugal.  Key is, make no interest payments on anything but your house, live a modest lifestyle and enjoy the simple things.  Camping is much more enjoyable than Disneyland, at least to me

smallbedbug Thu, 06/22/2017 - 01:35 Permalink

Nope, they will suffer because they are all about themselves and do not see how the government screw them over. Keep putting money away inyour 401k...first step of following the 99%. 

Twee Surgeon Thu, 06/22/2017 - 02:51 Permalink

No one that I know puts their "Money" in a Bank except to do the on line Electric Bill Payment (Utilities) and some running Money as a convenience and stuff like that.The only people putting Money in Banks is people who Have Real Money and I suspect that is 20% of the population in the USA.What goes in the Bank is what Has to go in the Bank.It is reasonable and standard procedure as far as I know. Nobody trusts Banks anymore. Getting fucked in the ass by Wells Fargo and Bank 9of America in the Ass in the 80's and 90's +.If I had any large amount of Cash, I certainly would not put it in a Bank. $300 is a large amount of cash to me and many and can make the difference between EATING, Homeless, and all those other little real world realities, not considered by Squall Street. and their Cop patriot, hit men, defenders.Posing as Patriots.

ElTerco Thu, 06/22/2017 - 02:54 Permalink

Seriously, this is good news. Maybe not good for the economy in the short term, but it shows personal responsibility -- something that has been sorely lacking in our increasingly liberal society.

1033eruth Thu, 06/22/2017 - 15:53 Permalink

Contrast this idiot story with the story we just had on how few Americans have any money for emergencies.  Lots and LOTS of conflicting polls.  And we base our decision making processes on polls?  Shit, we even have a daily poll on Trump approval.  Just think we're going to hear what his approval rating is every day between now and the next election.  SICK AND TIRED of canvassing tiny, TINY sections of america just so they can lie to the pollsters.  Unless the bastards are on the polygraph WHILE they are taking the poll, the poll is INVALID.