Millennials are becoming money-smart, with 45 per cent of 18 to 34-year-olds managing to save at least a quarter of their disposable income each month…
Millennials are becoming money-smart, with 45 per cent of 18 to 34-year-olds managing to save at least a quarter of their disposable income each month.
This is according to a recent report produced by Experian, which showed that in contrast just 34 per cent of 35 to 55-year-olds are saving this much.
However, the research shows that the younger generation has been very much influenced by their parents. Millennials who believe that their parents have had a positive influence on their money habits have almost double the savings of those who say their parents had a negative influence.
Likewise, those who have benefitted from their parents' financial experiences are savvier when it comes to managing credit. This puts them in a much better position to access better rates on borrowing, which will inevitably save them a considerable amount of money when it comes to big purchases later in life.
In contrast, Millennials who believe that their parents have had a negative influence on their money management are more than twice as likely to have missed an agreed credit repayment (17 per cent vs. seven per cent).
Additionally, 33 per cent of those negatively influenced have found themselves going into an unplanned overdraft, compared to 19 per cent of those who believe they had positive financial influences.
They're also twice as likely to have run out of money before payday in the past (44 per cent vs. 21 per cent), twice as likely to have been refused credit (20 per cent vs. ten per cent) and more than twice as likely to have been refused credit (ten per cent vs. four per cent).
Commenting on the research, Clive Lawson, managing director at Experian, said: "It’s striking to see just how much of an impact parental influence can have on the financial wellbeing of Millennials in adulthood.
"As it stands, it appears that Millennials already surpass older generations when it comes to money management and this is good to see; however, there are still a few lessons to be learnt. Many are still making crucial errors in the way they manage credit and these mistakes, such as not even checking their own credit report, can have far-reaching effects on their financial future."
It seems that with 80 per cent of them having had no formal financial education, Millennials have learnt a lot about finance from seeing the mistakes of older generations. In addition to this, 67 per cent say that their parents or guardians have had a positive influence on their money management habits, with just 17 per cent considering their parents to have had a negative influence.
The average Millennial has £8,384 in savings and £2,931 outstanding debt, excluding mortgages and student loans.