70% of Millennials Expect Financial Outlook to Improve In the Next Six Months
September 25, 2015 — NEW YORK–(BUSINESS WIRE)–When it comes to finances, more than half (53% vs. 45% in 2014) of Americans expect a greener outlook in the next six months, and this optimism is strongest among Millennials (70% vs. 64% in 2014) according to the American Express Spending & Saving Tracker.
With job and financial confidence high, Americans are comfortably spending and adequately saving. For the second year in a row, employed Americans are reporting that they feel more stable in their jobs than they did a year ago (34% vs. 25% in 2014).
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“Over the past few years, we’ve seen consumer spend confidence improve steadily,” said Jed Scala, Senior Vice President, Consumer Lending at American Express. “Millennials especially are feeling more optimistic than ever, and they are apparently ahead of the savings game, too.”
Millennials Are Growing Up
The generation known for creativity and self-expression can now be praised for something else: financial smarts. Millennials, on average, have achieved 49% of their year’s projected savings, 40% more than they had at this time last year. This might be due to setting more-realistic goals: In 2014, Millennials projected they would save a total of $12,189 for the year. When asked at the start of 2015 what their projected savings for the year would be, they revised their projection and reported $10,063 as the magic number.
Most Millennials feel optimistic about their financial situation: 70% report they expect that it’s only going to get better over the next six months, as compared to 53% of the general population. Perhaps that forward-looking optimism can be attributed to that fact that nearly twice as many Millennials as the general population are looking to second jobs to help increase their existing savings (21% vs 11%).
Americans On Track to Save
When asked in January 2015, Americans reported an average savings goal of $11,292 for the year. During a financial check-in in August, consumers reported a total average savings of $7,518 – up 5.1% from a check-in at the same time in 2014. At nearly 70% of their savings goal, and with three months left of the year, consumers are in a good position to end the year strong.
When it comes to methods of reaching savings goals, most Americans rely on their paychecks to fund their savings accounts. However, consumers are also finding thrifty ways to add more dollars to the bank. For example, top ways to save include:
Savings Method Annual Impact (2015 vs. 2014)
– Savings from tax return 26% vs. 21%
– Reducing spending on luxuries
(e.g. morning lattes, manicures) 23% (on par)
– Selling items and possessions,
e.g. Craigslist, eBay 22% vs. 17%
– Saving a portion of bonus 12% vs. 11%
– Working a second job 11% vs. 9%
Spending Is Up Overall in 2015
While consumers are socking away their savings, they are balancing that with their discretionary spending. Seventy-four percent of survey respondents (73% in 2014) have spent more than or the same as they had planned to at the beginning of the year on discretionary items, such as leisure, fashion, home, gaming, grooming and computer expenses.
Most Americans experienced “unforeseen” expenses this year (53% vs. 47% in 2014), such as car trouble, healthcare, other insurance and house- and education-related items. Despite these unexpected expenses, spending is expected to rise throughout the holiday season, as most still intend to spend large between now and the end of the year (71% vs. 62%). Some of the large items planned for the final months of 2015 include TVs, furniture and new or used cars.