A recent PNC survey found that many millennials, a group generally considered born in the 1980s and 1990s, are not saving money, but they'd like to.
More than 3,000 people were surveyed, and 56 percent identified savings and budgeting as their biggest financial issue. The problem is many millennials don’t know where to start when it comes to saving.
“I think the first thing is really understanding your spending,” said Michael Ley, senior vice president with the Digital Experience Team at PNC. “You can’t really save without understanding your spending and one way to do that is to track your finances. One way to do that is to get organized, see where your money is going and understand what you’re spending it on and when you get a better understanding you might see where there’s opportunities to change your spending habits so that you can save some.”
One way to do that, said Ley is setting a budget and learning how to follow it. Once the budget is understood, that’s when saving should start, and Ley said it doesn’t have to begin with large sums of money.
“Start small maybe, and prove to yourself that you can save,” he said. “Save towards a smaller item or goal that you would normally go out and purchase, but save for it first, get that money and prove to yourself that you can do it. Once you prove to yourself you can do it once, you can move up and set bigger and bigger goals and watch your savings grow.”
Ley doesn’t have any one recommendation for method of saving, and just emphasized that any way is better than not saving at all. He said once a substantial amount of money is amassed, a person can look into ways to optimize their savings.
Another challenge can be millennials believing there will be plenty of time to save later, but Ley cautioned against that notion.
“Being a little bit older, I understand that time flies by and there’s always things coming up, so the sooner you start the easier it is now, and those things really do build up over time,” he said, “and if you start early you can start with smaller amounts, probably not so painful, then you have a good jumpstart for what you would need for retirement in the future.”
Millennials aren’t the only group struggling to save; a separate report from MetLife found half of Generation X’ers (those born between 1965 and 1976) are behind in retirement saving.