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?

How 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.

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About the author

David Weliver
Total Articles: 304
David Weliver is the founder of Money Under 30. He's a cited authority on personal finance and the unique money issues he faced during his first two decades as an adult. He lives in Maine with his wife and two children.