Common Money Myths About Millennials

Millennials often get stigmatized as being awful money managers, whether it’s indulging in avocado toast instead of enjoying life’s simple pleasures, taking on debt like a sinking ship takes on water or yelling “YOLO!” while watching their emergency fund go to frivolous indulgences.

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Read: What It Means To Live a Truly Rich Life and How To Achieve It

However, are these millennial stereotypes rightfully deserved?

Debunk common myths about millennials, and see why this generation is better than you when it comes to money.

Older millennials — those ages 25 through 34 — have the second-highest average amount of credit card debt, according to GOBankingRates’ survey on household debt. The average is over $7,000 per person.

And another GOBankingRates survey found that 2 out of 3 millennials admitted they had paid for social experiences with their friends when they couldn’t afford it. This fact coupled with the credit card debt statistic might suggest millennials have bad spending habits and don’t understand how credit cards work.

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The group with the highest amount of credit card debt are actually baby boomers, who averaged almost $10,000 per person, according to the same GOBankingRates survey on household debt. Gen Xers also have the highest percentage of people with credit card debt at 57%, followed by baby boomers at 54%.

Younger Americans, ages 18 through 24, actually have the lowest percentage of people with credit card debt at just 37%.

See: 8 Surprising Industries That Are Thriving — and Have Millennials To Thank

Typically, older people have better credit than younger people, according to a Value Penguin study.

The study noted that more than 50% of people age 70 or older had a credit score over 780, while only 2% of people under 30 could make such a claim.

On the other end of the spectrum, 38% of people under 30 had scores below 621, while only 8% of people over 70 had scores that low.

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More than 60% of millennials report checking their credit report at least once a year, according to Financial Finesse’s Generational Research reports. Just 60% of Gen Xers and 56% of baby boomers report doing the same.

Another important note: Part of your credit score is based on the length of time you’ve had credit. So, millennials are at a natural disadvantage if you look solely at credit scores.

If you judge strictly by the numbers, millennials have the least amount of money saved for retirement.

According to GOBankingRates’ Retirement Savings survey, over 40% of millennials have nothing saved for retirement and almost 30% have less than $10,000.

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“I see a lot of millennials contributing to their 401(k) plans,” said Sophia Bera, a certified financial planner with Gen Y Planning. “They at least want to get their company match, so they don’t give up free money. Many are watching their parents retire, and they want to make sure they’re saving enough.”

In addition, millennials are the most likely generation to be contributing to a Roth IRA. And, 80% said they take advantage of the 401(k) matching funds offered by their employer.

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GOBankingRates conducted a five-question survey asking people across the country — and of all age groups — about 401(k)s, banking products and credit scores.

A mere 43% of younger Americans (ages 18 to 24) were able to correctly describe a 401(k), and only 36% could define bank CDs. In addition, only 29% knew the three credit bureaus, and less than 60% knew that your income doesn’t affect your credit score.

Younger millennials likely haven’t had much experience with how credit scores work or working at a company that allows them to participate in a 401(k) plan. So, it makes sense that they wouldn’t be as familiar with these terms.

However, older millennials scored better than their younger counterparts. For example, 60% of older millennials know what a CD is compared to the 36% of younger millennials.

More: The World’s 20 Richest Millennials

When GOBankingRates asked people how they would spend an unexpected windfall of $10,000, 6% of millennials ages 25 to 34 said they would spend it on a new wardrobe — the second-highest percentage of any age group.

Another 12% — the highest of any age group — said they would go on a nice vacation and invest in themselves.

The younger group (ages 18 to 24) weren’t far behind, with 4% getting new clothes and 9% taking the trip.

Millennials spend less per year than baby boomers and Gen Xers, according to the U.S. Department of Labor. Average spending each year for millennials is $47,113, compared to $66,981 for Gen Xers and $59,646 for boomers.

Though it would be tempting to blame not having kids as the only reason for the lower spending, millennials have the lowest spending among all three age groups in every category examined: housing, clothing, eating out, food at home and entertainment.

Student loan debt has increased to a mind-boggling $1.7 trillion, according to CNBC.

Millennials are often thought of as being responsible for all student debt, but this isn’t quite true. Many student loan borrowers, and especially co-signers, are older. And, they’re either borrowing to go back to school or to pay for their children or grandchildren’s education.

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GOBankingRates’ Debt survey compared debt balances across age groups and found that millennials have less overall debt than Gen Xers.

Millennials ages 25 to 34 averaged over $36,000 in debt. But, younger Gen Xers averaged almost $82,000 in debt, and older Gen Xers average well over $130,000 in debt.

Some of this is due to the fact that the age for buying a first home has increased. Even taking that into consideration, millennials should be given credit for postponing major financial decisions until they have a stable financial footing.

According to Life Delayed, a whitepaper by American Student Assistance, over 50% of young Americans surveyed said student loan debt affected their decision or ability to buy a house.

Financial Finesse’s report found that only 26% of people under 30 were married, and only 20% owned a home.

It can be tempting to interpret this data to mean that all millennials are self-centered and focused on enjoying their own life rather than preparing financially for a family — but that’s not always the case.

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Many millennials are cognizant of the costs associated with getting married and starting a family.

According to Life Delayed, 35% of millennials found it difficult to pay for daily necessities because of their student loan obligations. Twenty-one percent said they put off getting married because of student loans, and 28% said student loan debt had played a role in their decision to delay starting a family.

So, at least for some millennials, these decisions are made with financial responsibility in mind.

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