A newly-released study from the Wells Fargo Investment Institute explores the financial habits of Baby Boomers, Generation X, and the Millennials. The study defines Millennials as those born between 1982 and 2000 (who are aged 17 to 35 today) and includes some very revealing statistics about this often-misunderstood generation.
For example, the median household income for this generation today is $48,039. This is about 20 percent less than Baby Boomers earned at the same stage in life, according to the report. Generation X (ages 36 to 52) currently makes a median of $90,000 per year, and Baby Boomers clock in at $64,664.50.
Millennials contribute $1.3 trillion direct spending, which is predicted to increase as more enter the workforce and advance in their careers. The study reported that the majority of Millennials are saving for retirement, but 41 percent have not yet begun to do so. Among that portion, 64 percent say they aren’t making enough to save. Tendency to invest and save for retirement may be affected by student loan debt – 34 percent of Millennials have such debt, with a median balance of just under $20,000. 75 percent of Millennials with student loan debt say their debt is unmanageable.
The report stated that Millennials spend most of their income on housing – a 36.9 percent share. The next greatest category is transportation, with 20 percent, followed by food, 14.4 percent. 10.7 percent goes to personal insurance and pensions. The four lowest categories of Millennial spending are entertainment at 4.8 percent, health care (outside of insurance costs) at 4.7 percent, 4.6 percent education, and 3.9 percent apparel and services. It should be noted that for other generations surveyed, the general distribution of the pie looks similar – notable differences being that Baby Boomers spend more directly on health care and less on education than either of the other groups, and Generation X spends the most on insurance and pensions.
The report noted the high educational attainment of Millennials (perhaps not surprising given the high rates of student loan debt), as well as the tech savvy character of Millennials as well as the extent to which this generation values social and environmental change.
Read the full report here.