Tags: millennials | savings | rate | spending

Moody's Survey: Young Adults Savings Rate Is Negative 2 Percent

By    |   Monday, 10 November 2014 01:30 PM

Here's another sign that the finances of millennials — adults under the age of 35 — are in bad shape.

These folks have a savings rate of negative 2 percent, according to a survey from Moody's Analytics obtained by The Wall Street Journal.

The numbers are much better for older adults: a positive savings rate of 3 percent for ages 35 to 44, 6 percent for ages 45 to 54 and 13 percent for ages 55 and older.

So what are the ramifications of millennials' savings deficit?

"In the very near term it's a plus for spending and economic growth, but in the long run these households are not saving, and that will impair their ability to spend in the future," says Moody's Chief Economist Mark Zandi, co-author of the report, according to The Journal.

Hefty student loan and credit-card debt play a major role in millennials' financial crunch.

"They are truly a vulnerable group," Annamaria Lusardi, an economist at George Washington University, told The Journal. "They don't have assets to buffer themselves against shocks."

"There's people who really can't save because they don't have the means to save and that's not a small group of people," said Shai Akabas, an economist at the Bipartisan Policy Center. "If you're in a $25,000-a-year job and starting a family, it's going to be very hard to accumulate savings regardless of your consumption decisions."

Meanwhile, the weak economy of recent years has led to less job-hopping by younger workers, The Washington Post reports. And that has economists worried about the employment market.

"It's a different game now," Anthony Carnevale, director of Georgetown University's Center on Education and the Workforce, told The Post.

"Employers are demanding much higher skills requirements at the entry level. The possibilities for learning and earning on the job are better than they ever were. But only if you can get your foot through the door, and stay in."

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Here's another sign that the finances of millennials — adults under the age of 35 — are in bad shape.
millennials, savings, rate, spending
Monday, 10 November 2014 01:30 PM
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