Hey millennials – you're really good at saving for surprise bills

The fear of getting into credit card debt is encouraging more millennials to save.
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Of all the generations you'd expect to be the best equipped to cover an unexpected $500 or $1,000 expenses, millennials probably wouldn't be top of the list.

We're always reading some study or another about how the younger generations are being hit by lower wages and higher living expenses, while baby boomers light cigars with $5o bills and use their grandchildren as footstools.

But according to some research by Bankrate, while the millennial generation may not be the best paid, they could well be the best savers.

Bankrate asked Americans if they have enough money in their savings to cover an unexpected bill of at least $500 – and six out of 10 Americans said they couldn't. Just 41 percent of adults said they could cover the cost from savings (others would have to use credit).

While this is still a 4 percent increase compared to the same survey conducted last year, it doesn't speak well of the financial contingencies many Americans have in place.

Perhaps surprisingly, it's the millennial generation who have the most cash in reserve to cover the bill – 47 percent of 18- to 29-year-olds said they could dip into their savings to pay for unplanned expense.

This is a marked difference from two years ago, when just 33 percent said they had enough savings to cover such a bill.

The "silent" generation of over-71s said they would have to use a credit card to cover such an expense, putting them at risk of accruing interest if they can't then pay it off in full.

The study found the most common causes of unexpected expenses were car problems, appliances breaking down and sudden illnesses.

It's sound financial planning to have a decent-sized chunk of money in reserve to cover unexpected bills, and millennials are once again leading the way at cutting their spending to ensure they have this contingency in place.

Some 69 percent of 18-29s said they preferred to use savings or cut their spending to pay for a bill, rather than using credit. And more than half said they would cut back on alcohol if they wanted to save even more money.

They were also the most likely to cut back on other luxuries, such as coffee, to increase savings.

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