The Better Financial Habits Millennial Report found that a majority of millennials (80% of 1,000 respondents), 18 to 34 years old across the country are confident that their financial situation are better or similar to their parents.
Two-thirds believed they have good financial habits, nevertheless the results of the study showed that many of the respondents likely have less-than-ideal financial condition.
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“Many young adults have great confidence in their financial situations, but we can’t ignore the fact that so many are living day to day, not able to prepare for their financial future,” according to Andrew Plepler, executive, global corporate social responsibility at Bank of America Corp (NYSE:BAC).
Majority of millennials are worried about financial situation
The study showed that 53% of millennials are actually living from paycheck to paycheck, but many are probably not saving for their future. Thirty five percent (35%) are still receiving financial support from their parents or relatives while 19% still live at home without paying rent or expenses.
The report also found that 15% of millennials still receive regular financial support from their parents to pay their mortgage or rent and 25% still receive money to pay their phone bills.
According to the report, 74% of millennials are worried about their financial situation. Fifty-seven percent (57%) find it “really difficult” to live within their budget and not to spend beyond their means while 36% said overspending is one of the primary causes of their stress.
Millennials who are currently staying with their parents have no plans to live with them forever. Seventy four percent (74%) of those receiving regular financial support plans to stop taking money from their parent over the next four years.
Many millennials practice good financial habits
Many of them are practicing good financial habits to stay on track over the short-term. The findings showed that 49% pay all of their credit card debts every month while 35% said they only carry cash to limit their expenditure.
These short-term good financial habits may not be sufficient to help millennials secure their long-term financial target, according to Bank of America Corp (NYSE:BAC).
The report showed that 31% of respondents believe they are excellent or good at saving for retirement. Only 16% of those who save have an IRA and one out of three contributes to a 401(k).
Sixty-eight percent (68%) said they learn about money from parents while 58% said their financial habits came from their parents.
According to the report, the millennials who participated in the study have a positive, if not slightly idealist view about their future. Only 4 out of 10 respondents believe that salary is more important than doing what they love.