Whether it's the notion that they consistently splurge on avocado toast or always struggle to repay their student loans, millennials have a reputation for being bad money managers. Like most stereotypes, however, it's not a universal truth that millennials can't handle their own finances. In fact, many millennials are doing well with their money despite the economic difficulties.
Click through to pick up a trick or two when it comes to managing money.
1. Millennials Make Financial Plans
One of the first steps toward taking control of your finances is making a financial plan. According to a study conducted by Koski Research for Charles Schwab released in June 2017, 74 percent of millennials had a financial plan, and 34 percent of millennials put that plan in writing. By comparison, only 21 percent of Generation Xers and 18 percent of baby boomers had written financial plans, and about the same percentage of Gen Xers and baby boomers had unwritten plans as millennials.
2. Millennials Have Side Hustles
Millennials might not be making as much money from their main job as other generations, but they're taking on a number of side hustles to compensate. According to a 2016 CareerBuilder report, 44 percent of 25- to 34-year-old workers had a side gig, and 39 percent of 18- to 24-year-old workers also had more than one job. Older age groups were less likely to have a side hustle: 29 percent of people between the ages of 35 to 44, 22 percent of people 45 to 54 and 19 percent of people 55 and up.
3. Millennials Are More Engaged in Health Insurance Decisions
According to a study released in 2017 by the Employee Benefit Research Institute and Greenwald and Associates, Inc., millennials are more engaged with their health insurance plans than other generations. For example, EBRI found that millennials were more likely to request additional information or talk to their doctor, friends, family or coworkers when picking a plan.
Learn: Why You Need an HSA
4. Millennials Are More Cost-Conscious With Medical Treatment
In addition to being more engaged in their choice of health insurance, EBRI also found that millennials were more likely than other generations to proactively research costs of medical treatment before they went to the doctor. In addition, millennials were also more likely to use online tracking tools provided by their health plan to manage expenses and to budget for healthcare expenses.
5. Millennials Set Monthly Savings Goals
About 28 percent of millennials have an emergency fund that would last at least three months, as compared to 31 percent of Gen Xers and boomers, according to Schwab's study. However, millennials haven't had nearly as long to save for their rainy-day fund. When it comes to savings goals, however, millennials lead the way with 38 percent having a monthly savings goal. Only 36 percent of Gen Xers and 20 percent of boomers have similar goals, according to the study.
6. Millennials Take Better Care of Themselves
Millennials are more likely to report taking part in healthy behaviors, such as exercising regularly and maintaining a healthy weight, according to the EBRI study. Although this might not sound like it makes millennials better with money, staying healthy can save you a lot of money. Visits to the doctor for high blood pressure, diabetes and other weight-related ailments can really add up.
7. Millennials Don’t “Set It and Forget It”
From time to time, different types of investment will over- or under-perform, causing your portfolio to be out of alignment based on your risk tolerance. To prevent your portfolio from becoming too risky or too conservative for you, you need to rebalance your portfolio from time to time. When it comes to retirement plans, however, many people make their elections once and forget about it. Schwab's study found that 44 percent of millennials rebalanced their employer plan, compared to only 30 percent of Gen Xers and 25 percent of boomers.
8. Millennials Know What Fees They’re Paying
Millennials also lead the way when it comes to being aware of the brokerage and investment account fees they're paying. Almost 85 percent of millennials reported that they were aware of the fees they were charged, compared to only 75 percent of Gen Xers and 65 percent of boomers. Over 20 percent of boomers didn't think they paid any fees.
9. Some Millennials Are Saving
According to a Bank of America study released in 2018, almost half of millennials have at least $15,000 saved, and 16 percent have at least $100,000 saved. To put that in perspective, according to a 2017 report by the Transamerica Center for Retirement Studies, the average baby boomer has only $164,000 in retirement savings.
10. Millennials Consider Finances in Family Planning
When it comes to starting a family, millennials are running the numbers before starting: 30 percent said finances played a major role in their decision. When Gen Xers and baby boomers were asked, only 22 percent and 9 percent said their finances played a significant role in their decisions. And, 27 percent of older millennials are already saving for their kids' future educations.
11. Millennials Try to Improve
No one, and definitely no generation, is perfect when it comes to managing money. But recognizing you need to improve is the first step, and millennials are doing that. According to the 2018 Bank of America Study, 73 percent of millennials say their generation overspends on unnecessary indulgences, and 75 percent say they overspend compared to other generations.