Updated:
Original:

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.
Author:

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.

Next Up

Knuth - Nezhad - side by side

Frey challengers Knuth, Nezhad agree to rank each other 2nd

They're urging supporters to do the same on Nov. 2.

Jerome Horton - Sherburne Co. Jail - CROP

Charges: Man lied to buy gun later used by St. Paul mass shooting suspect

He's accused of making false statements during the purchase of a firearm.

Screen Shot 2021-06-04 at 6.30.24 AM

BCA releases investigative file in Winston Smith's shooting death

The file contains 1,000 pages of documents, hundreds of photos and dozens of audio files.

Slice

Fire at Mpls. pizza joint weeks after opening, owners suspect arson

The owners arrived at work Tuesday to find the building on fire.

vaccine, covid

New COVID charts show hospitalization, death rates based on vaccine status

The unvaccinated are far more likely than the fully vaccinated to become hospitalized or die.

Flickr - Superior National Forest Boundary Waters

White House begins process to ban new mining near BWCAW

The stated goal is to protect the "unique natural wonder" of the BWCAW.

Autumn Merrick, Autumn Rose Merrick

Man charged in shootout, crash that killed 18-year-old on scooter

Autumn Rose Merrick was with a friend near the Holiday gas station.

D Quagon - DOC photo

DOC searching for convicted sex offender who has gone on the run

The recently released man removed his GPS monitoring device.

Anthony Edwards

Timberwolves: 5 things you can count on for the 2021-22 season

The Timberwolves hope to return to relevance this season.

Related

If you're young and have savings, you're doing better than most

Millennials aren't saving for the future, but they're optimistic about it anyway.

Is the 'American Dream' now a pipe dream for millennials?

Only half of Americans born in 1985 earn more than their parents did at the same age, a study has found.

The Tip Jar: 4 things millennials should be doing with their money

Just got a job and have no idea how to manage your money? These tips can set you up for the future.

The Tip Jar: How to stop yourself spending $27K on your wedding

Seeing the average cost of a wedding is arguably more of a disincentive to get married than a crippling fear of commitment.

Millennials are embarrassed to still live with parents, but some are too poor to move out

Young millennials also have plenty of regrets about their college experience.

The Tip Jar: A beginner's guide to setting up and saving into an IRA

Want to get an IRA for retirement but the prospect is too daunting? Check out this guide.

The Federal Reserve just hiked interest rates – here's what it means

Ir you're looking at student loans, thinking about buying a house, or have a credit card, this is good to know.