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The 2015 Millennial Money Survey: How Much Do 20-somethings Earn And Save?

Money Under 30’s exclusive 2015 Millennial Money Survey reveals how much average American 20-somethings earn, save and borrow. How do your financial habits compare?


The 2015 Millennial Money SurveyHow much does the average 20-something save? What are other 20-somethings earning? How are YOU doing financially compared to other young adults your age?

Wonder no more. Here are the results of Money Under 30’s second annual Millennial Money Report in which we take a look at the state of 20-somethings’ finances in the United States.

We conducted an online poll of 253 Americans between the ages of 21 and 29. Respondents were invited from a broad Internet audience – not just Money Under 30 readers, who tend to be a bit more money savvy than average. (You can pat yourself on the back for that!)

Today’s 20-somethings remain financially optimistic, despite current struggles.

We asked respondents three questions about their present finances and their outlook on the future.

While only 12 percent of respondents reported being “very satisfied” with their financial situations (unchanged from 2014), 52 percent are either “very satisfied” or “somewhat satisfied”. Meanwhile, 20 percent are “not satisfied” with their current situation.

Despite that, most 20-somethings are optimistic that things will get better:

  • 73 percent think their situations will improve in the next five years (down from 76.5 percent in 2014).
  • 80 percent expect to achieve the same as or a greater level of financial success than their parents (the same as last year).

That optimism is a good thing when you consider the financial struggles 20-somethings face.

Savings

How much do 20-somethings save?

Most 20-somethings are saving something, but 14 percent aren’t saving at all.

Less than 50 percent of American 20-somethings are saving for retirement.

  • Only 46 percent of respondents contributed money to a retirement account such as a 401(k) or IRA, down from 49 percent in 2014.

Here’s some good news: most 20-somethings are saving something, presumably for shorter-term goals like buying a home:

  • 63 percent of respondents reported saving between 1 and 15 percent of their income.
  • But 14 percent aren’t saving anything at all, up from just 8 percent who reported not saving anything in 2014.

Our respondents reported having an average of $6,713 in cash savings and $7,453 in retirement accounts (401ks, IRAs, etc.).

Debt

Student loan debt remains the biggest concern facing today’s 20-somethings. This year, 19 percent reported repaying student loans as their number one financial priority, up from 12 percent in 2014.

After increasing income (17 percent), repaying credit cards and other debt ranks 20-somethings’ third financial priority (15 percent).

How much debt does the average 20-something have?

2015-Millennial-Money-Report-Debt

This year, it seems that 20-somethings are borrowing even more for education.

Nearly half (47 percent) of respondents reported having student loan debt. Although it’s a bright spot that the percentage of millennials with student loans isn’t higher, among those who do, the burden is growing: The average student loan debt of our respondents was $36,584, up $663 from $35,921.

While our study looked at the rate of education debt among all 20-somethings, within the past few years, the percentage of students graduating with student loans is even higher (71 percent in 2012, according to The Institute for College Access and Success).

In our study, median student loan debt in 2015 was $28,000, up from $22,000 in 2014.

Although student loan debt continues to grow, millennials are reducing debt in other areas.

In 2015, 31 percent of respondents reported having credit card debt, down from 38 percent in 2014. The average credit card debt fell to $3,718 from $3,993 a year ago.

The percentage of 20-somethings with car loans remains unchanged at 26 percent, but the average auto loan debt fell to $12,273 from $14,157.

Work and income

2015-Millennial-Money-Report-Earn

Without many years of experience, we would except young adults’ incomes to be lower than average, and they are.

Among employed respondents:

  • 75 percent of 20-somethings earned less than $50,000. By comparison, 48 percent of all American households earn $50,000 or less, according to 2013 U.S. Census Bureau data.
  • 13 percent of 20-somethings earned more than $75,000, an 8 percent increase over 2014.
  • 36 percent of 20-somethings earned between $25,000 and $50,000, up 6 percent from 2014.

Unemployment remains high among young adults.

About 25 percent of respondents are unemployed, with 11.5 percent of them saying they are actively looking for work.

Among those who are working, many would rather be somewhere else: 32 percent of respondents have a job but it’s not related to their desired career or field of study. In addition, 25 percent of respondents reported working more than one job to get by.

Conclusions

Stagnant wages, a competitive entry-level job market and ballooning student debts continue to make it difficult for 20-somethings to get on their feet financially.

These facts explain low retirement plan participation rates among Millennials and contribute to other  predictable trends such as declining marriage rates and an increasing demand for smaller, more affordable homes. (The median age at first marriage has never been higher, according to The Pew Research Center. And when it comes time to buy their first home, 20-somethings are increasingly interested in houses that are older, smaller and less expensive, according to the National Association of Home Builders.)

How can Millennials get ahead?

In nine years of writing personal finance advice on Money Under 30, I have seen the tactics successful young adults use to begin building financial security as well as the excuses many others use to explain their lack of it.

Here’s the difficult truth: Building a financial foundation in your 20s takes some sacrifices, hard work, and several years. The critical steps are:

1. Find well-paying work.

First, you have to earn enough money to meet your expenses. This may mean taking jobs you consider beneath you (or several) while you continue looking. Just don’t get stuck there.

Your talent is your largest asset, and the most successful young adults are aggressive in pursuing a good job and either getting promoted or moving into a higher-paying position within a few years.

2. Avoid new debt by building a buffer.

Ideally, you want to avoid living paycheck-to-paycheck like so many Americans. As soon as you can, build a ‘bank account buffer’ of two weeks’ pay so you can better weather ups and downs in your cash flow. (And yes, this may mean finding side gigs or taking a second job to earn some extra money).

3. Keep your largest expenses as low as possible for as long as possible.

For most 20-somethings, rent and transportation take up a sizable chunk of income. The smaller you can keep these expenses, the more you’ll have to save. Can  you live with Mom and Dad for a year or two? Do it. Can you use public transportation and postpone buying a car? Consider it. Then, pay yourself what you’re saving on rent and auto expenses.

4. Maximize your returns by allocating savings strategically.

Financial success compounds just like the money invested to create it. A better paying job makes it possible to save. Having savings enables you to pay extra towards student loans. Paying off a loan frees up cash you can put towards other goals.

Make sure you’re taking advantage of all the available tools that can help you achieve these goals by allocating your savings strategically as I outline in The ‘6 + 1 System’ for creating a financially stable life.

5. But don’t forget to have fun.

Like many of the Millennials in our survey, I spent a majority of my 20s stuck between big debts and too little income, stressed out and depressed.

While you may be anxious to make rapid progress on your finances and in your career, try to remember that you won’t be 20-something forever. Take the time to enjoy it.

Achieving your first financial goals may seem a long way off, but if you’re calm and consistent in working towards them, you’ll get there sooner than you think.

Earn and save more with our free course:

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About David Weliver

David Weliver is the founding editor of Money Under 30. He's a cited authority on personal finance and the unique money issues we face during our first two decades as adults. He lives in Maine with his wife and two children.

Comments

  1. Genius post!
    It’s a staggering number of people in their 20’s and early 30’s that fall into this category. Even amongst our friends, we always get asked how we invest, how to start saving, and we’re always more than happy to engage in the dialogue.
    The who YOLO generation, frankly, sucks. $25 here, another $50 for happy-hour – it all adds up! And pretty soon, you’re living paycheck-to-paycheck! I’d love to start saying YOSO – You Only Save Once! How about that?!? LoL And you do only save once – when that paycheck is good and allocated, you can just forget it and watch your money grow.
    Great post again!! Sharing this with everyone I know :-)

    • Haha! I agree with you there – YOSO!

      Here’s the thing, everyone’s situation is different, and with the cost of higher education costs and higher rates of underemployed, there’s going to be a problem with the “savings” part.

      My story is a little different. I have credit card debt (had to live off it for a few months while unemployed), I also have over 30k in student loans (got the payment down to $330 per month with an income contingent plan). I bought my car with cash (it’s not new, and you don’t need a new one). I also run a business from home so I have monthly expenses related to that, which I know if part of the business, but it’s still an expense that is needed. I take home enough to pay the bills and pay my taxes….I can go out once in a while, and I golf quite a bit in the summer.

      Every situation is different and people just have to smart if they are taking home just enough to pay the bills.

  2. Thanks for sharing!
    All 20-somethings graduate and are faced with the realization that we are no longer graded with A’s, B’s, etc. I remember when it hit me that I had no idea how to grade myself in the “real world.” Am I saving enough? Do I have too much credit card debt? How much liquidity should there be? It’s not likely you can ask others how much they have or don’t have.
    Lets face it; we all compare ourselves with others even though we each run our own race in life. But I think this post is a fantastic tool for recent graduates to establish that financial benchmark of what is the norm. Some friends have been given more while others have had to fight to stay afloat, but in the end – we all want to live without relying on that very next paycheck and retire comfortably.

    • David Weliver says:

      Appreciate it, Nick.

      I agree it’s good to have benchmarks, especially when we’re starting out. We have to be careful, though…some people get way too caught up in the comparison game. Like I said in the post — we’re all at different places in life and we all make difference choices.

      A few years back I wrote an article about a goal for your 401(k) balance by your 30th birthday party and the comments devolved into a nasty game of “who’s the richest young person here”. That’s certainly not the point. But when you see, for example, that 18% of Money Under 30 readers are saving more than 15% of their income — that might provide some healthy inspiration to stretch your own savings.

    • Barbara says:

      Nick- I agree we need more benchmarks. It’s a scary feeling not knowing how how fiscially healthy you are. Now is the time I could make or break my finances for years to come. One of the downsides of this blog is they constantly have articles about investing, and it makes me wonder if I’m behind schedule because I’m not doing that. But then I look around and I don’t know a single person in their 20’s investing. My point is we have no benchmarks to compare to. Can the next survey be on how much money each life group is spending on things? What does a fiscally responsible late 20’s married couple look like?

  3. Great post and awesome infographic!

    My finances definitely suffered from the YOLO attitude in my early 20s, but fortunately I’ve gotten things under control. Anneli is so right when she says you can only save once! Even though I spent my first few years after college earning a below average salary, I definitely should have done more to save. I’m surprised that only 16% of Money Under 30 readers are saving more than 20%.

  4. I was extremely surprised with the survey. I didn’t how broke people under 30’s are until I read this post. But I totally agree with the survey. This is an eye opener for those people who’s just starting up.

    One of the things I learned is that, when it comes to our financial we should always save and think ahead, meaning think of the future and prepare for it. It’s good to relax and have fun sometimes, but too much of it is really bad.

  5. This does not surprise me as I am one of those 20 somethings. Especially with the 401k there comes a point where you are looking at your pay stub like wow I could of used that extra money. But once I found this blog, I changed my saving habits tremendously. I think it is harder in your 20s because you feel you have all the time in the world. I really appreciate this blog, it’s awesome.

  6. This was great, and I only wish I had seen these numbers in my early 20s. I just wanted to point out that you have Software Engineer salaries listed twice: Once for $110,000 and another for $58,000. Both are feasible mid-career and starting salaries, respectively, depending on the employer’s industry.

  7. Were all “Money Under 30 readers” confirmed as under 30 years of age? I’m curious if the increased stats for readers is an actual pat on the back for the readers, or if there are possibly some older readers being included and inflating numbers.

  8. Tony Cat says:

    If only more people within my generation cared about what they need for “tomorrow” instead of in the moment…I feel like there is this perfect storm of everyone having a sense they are entitled to stuff or becoming a VP when they leave school in combination with the YOLO lifestyle/spending.

    • I agree that young people don’t necessarily put enough thought into the “future savings” subject, however, there is a strong cultural pull for young people like us to blow our money and live in the moment. That combined with the fact that the jobs and money just isn’t there is detrimental not only to the financial well-being of our generation, but to that of the future generations to come. It’s more than just our fault, there are other forces to take into consideration. We are only but products of our environment and culture. Somewhere along the line, education has failed us be it with the cost of tuition or not teaching us how to think about finance in the first place. If we really thought about finance seriously half of us wouldn’t have gone to college from the get go considering how much it costs us in the future.

  9. This was a great post and it was pretty spot on among my 20-something friends. It’s always interesting to hear different views on saving and planning for the future.

  10. I’m not surprised by the survey, but I’m thankful for finding this site and aiming to rectify the mistakes of my early twenties. In my family, we never talked about money. And once I got to college, it was still considered a private subject. All I knew was, pay your bills, tithe, then the rest is for you… That landed me in an ugly place! But over the last year, I have managed to pay off all of my debts and am preparing to buy a home in the fall. I’m still not where I want to be, but I’m working aggressively to get there. I hope people will be inspired to make positive changes, but not get caught up in what other people have! Some of us weren’t getting professional OR family advice when we started earning our first pay checks.

  11. In my 20’s it was all about paying off school related debt, Now the only thing left for me is 1500 of credit card debt. I did that backwards and should have payed off the 19% credit card first but now I have 1500 of debt left and that’s it, I am approaching my zero debt zero asset year and then it will be all up hill for asset accumulation from here

  12. This is a very interesting survey and it hardly says anything surprising about the current dialogue surrounding young people and student debt. I was, however, surprised at the findings that 43% of 20-somethings are making less than $25,000 a year. That is a staggering fact considering that student loan debt averages at $29,000. I think the fact of the matter is that young people are in a state of economic crisis. If we don’t do anything to pull our younger generations out of this paycheck to paycheck cycle the larger economy is going to start to suffer as a whole. I don’t know why our country seems to overlook the glaring truth that young people are the core building block towards the future economy. Why do you keep bottle necking them into paying huge amounts of money for economic stability and education? This is not a working model for our country’s economy. It is not sustainable, period. This economic paradigm we are living in forces young people to put off major purchases such as houses, cars etc. It forces responsible people to put off having children, which means couples are having riskier pregnancies at older ages, which also burdens the healthcare system and economy. There is a huge shift going on with the millennial generation and at this point it seems as if we really bought into the American dream without any solid results to back it up. We really are the YOLO generation who places blind faith in the fact that everything will be alright in the long run.

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