Young Americans improving saving, spending habits
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It took a while, but the seriousness of the economic meltdown finally seems to be sinking in for the younger set.
Gen Y members between the ages of 20 and 29 are saving more, spending less and generally doing a better job of managing their money, according to recent data from Fidelity Investments.
Most -- 84% -- have limited their discretionary purchases, and nearly half of those are putting aside a median of $150 a month for rainy days.
The top sacrifices: travel and vacation expenses, followed by spending on consumer goods such as electronics and clothes.
Young Americans are focusing on buffering their emergency funds, paying off credit card bills and storing money in checking and savings accounts. Meanwhile, their older counterparts are draining their savings trying to make mortgage and auto loan payments.
Still, Gen Y is a little shaky on the mechanics of saving. Nearly half don’t know where to direct their savings in order to reap the greatest tax benefit, and a similar number don’t use a budget to manage their monthly finances.
But 55% of young people would welcome help developing a budget, and 89% want general financial guidance. Still, 58% have yet to ask for professional direction because it’s seen as too expensive.
-- Tiffany Hsu
