Millennials Are More Prepared for a Recession than Baby Boomers — How Do You Rank?
Written by
David Nadelle
Edited by
Carly Brashears
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It now seems more likely that the U.S. economy is heading toward a soft landing rather than a crash. However, if a sustained decline in economic activity tips the country into a recession, Americans in general are feeling financially confident. And one generation in particular believes its better prepared to withstand the fall than others.
According to a recent survey conducted by OnePoll and commissioned by payment network Affirm, 76% of the 2,000 U.S. adults polled feel prepared for a recession, in spite of the financial struggles many Americans had this year. The study found that 79% of millennials feel more prepared for a recession, compared to 60% of baby boomers.
Additionally, 64% of those surveyed reported that they feel “in control of their finances,” but 79% think they could be doing better. Meanwhile, 55% of respondents stated they took measures to address their personal finances this year, with 63% doing so in anticipation of a looming recession.
Respondents who tried to regain control of their finances did so primarily by saving more (68%), spending less (65%), creating a budget (54%), talking to a financial adviser (50%) and downloading financial or budgeting apps (43%).
“Despite having financial confidence, Americans still want to do more. In fact, about 80% think they could be doing a better job managing their finances,” said Wayne Pommen, Chief Revenue Officer at Affirm. “While about 70% of people have created or are using a personal budget, the average person has spent about $350 over budget in the past six months.”
We can only conjecture whether most Americans will be ready to ride out a future recession, but many are at least doing something about their savings. Optimistically, almost seven in 10 OnePoll survey respondents have a definite plan to manage their finances for the rest of 2023.
And, as Business Wire reported, the U.S. personal savings rate — the percentage of people’s disposable income that they save instead of spending — hit 4.3% in June, significantly increasing year-over-year from the 15-year low of 2.7% in June 2022, per the Bureau of Economic Analysis data.
In a separate study conducted by Nationwide Retirement Institute last year, 56% of millennials feel confident in their ability to protect their finances if there is another downturn, compared to 43% of Generation X and 33% of baby boomers.
“Compared to other generations, millennials have lived through more formative events, including three significant financial crises, in a short time span,” said Kristi Martin Rodriguez, head of the Nationwide Retirement Institute. “Those disruptions have increased their awareness of the importance of planning for the unexpected and taking ownership of their financial futures.”
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