Millennials aren’t saving a dime

This is an archived article and the information in the article may be outdated. Please look at the time stamp on the story to see when it was last updated.
MONEY3

NEW YORK (CNNMoney) — Cash-strapped millennials are slipping into the red.

People younger than 35 are not saving money, according to a study by Moody’s Analytics. In fact, their savings rate has dipped to negative 2%, meaning that they’re spending more than they have. They’re the only age group that has a negative savings rate.

In contrast, workers between the ages of 35 and 44 have a positive savings rate of about 3%.

Millennials are struggling in spite of an improving job market, with an unemployment rate that dipped to 5.8% in October as the U.S. economy added 214,000 jobs.

But wages have remained stagnant, barely budging since the 1990s. So even with a low unemployment rate, millennials are having a tough time making ends meet. Many have taken on hefty student debt to attain the skills they need to be competitive in the work force.

Things were a lot worse just a few years ago. Millennials had a negative savings rate from 2004 to 2009, bottoming out in 2007 with a deficit of about 15%, according to Moody’s.

They recovered in 2009 and managed to stay above water until 2012, when they slipped back into the red.

Related: First-time homebuyers abandoning the housing market

Many college-educated millennials are able to find professional jobs, but they have limited upward mobility according to Babson College finance professor John Edmunds.

“The millennials are waiting for those above them to either retire or die,” he said. “But the baby boomers are not going to give it up that easily.”

 

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

1 Comment

  • Gus T. Breeze

    It’s probably because they finally realized that interest paid on money saved doesn’t keep up with the devaluation of the dollar. So ya might as well piss it away while ya can.