US millennials (aged 18 to 34) are the first generation to make long-term financial plans for travel, dining out and exercise, rather than just focusing on saving for retirement. This is the finding of a Spring 2017 report from Merrill Edge – the online brokerage service provided by Bank of America Merrill Lynch.
Other highlights from the Merrill Edge Report include:
- Freedom & Flexibility: Most millennials (63%) are saving money to enjoy their desired lifestyle, compared to the majority (55%) of Gen Xers (aged 35 to 52) and baby boomers (aged 53 to 71) who are saving so they can leave the workforce.
- FOMO Mentality: Millennials' fear of missing out (FOMO) means they are more likely to spend their savings on travel (81%), dining (65%) and fitness (55%) than saving for financial security in the long-term future.
- Overthrowing Stereotypes: Americans view their elders as better savers, but in reality, it's the younger generations that are saving the most. Millennials save on average 19% of their income per year, while Gen Xers and boomers both save only 14%. More than one-third of millennials (36%) set aside more than 20% of their salary annually.
- Financially Insecure: Americans don't feel they could still achieve their financial goals if they were to get a divorce (71%), have children (64%) or live to 100 years of age (62%). To better prepare them for life's uncertainties, 48% believe they would benefit from financial education.
For more on how consumers manage their money, see Flash Finance and Rethinking Finance: Wired Money 2017.