Millennial savings accounts are in trouble. Less than half of people under age 34 have more than $1,000 in savings, a survey by cost information website How Much found. Of the 2,585 people between the ages of 18 and 34 surveyed, 51.8% said they had less than $1,000 squirreled away, while another 18% had between $1,000 and $5,000. Just over 16% had managed to save more than $20,000.
Greater savings were generally correlated with a higher income. Half of people earning more than $150,000 a year had saved more than $20,000. But the group most likely to have paltry savings wasn’t actually the lowest earners. Fifty-six percent of those earning between $25,000 and $49,999 annually had less than $1,000 set aside. In comparison, 44% of those earning under $25,000 a year had less than $1,000 and 28% had managed to save between $1,000 and $5,000. Younger millennials also had less saved than older millennials, and men were better savers than women.
The survey results are a sobering reminder of the financial challenges facing many young people. Research by T. Rowe Price found that while millennials generally had good financial habits, many didn’t have much of a financial cushion for emergencies. Fifty-five percent said they’d ask family or friends with help when faced with a financial crisis and 57% said they’d use a credit card to get through a tough time.
Neither approach to managing financial emergencies is ideal. Generous loved ones can turn off the money tap at any time, while whipping out a credit card when your bank account is low can be a fast path to debt. Saving more money, especially for unexpected expenses, is the best way to protect yourself. If you’re among the group of millennials with a very skinny savings account, here are five ways to double your savings from $1,000 to $2,000, fast (none of which involve selling your beloved possessions).
1. Share your knowledge