According to a recent report, Americans were able to save an average of $5,011 in 2022. Millennials were able to save the most, with an average of $6,043. The report surveyed over 4000 Americans on their annual savings, financial concerns, debts, and 2023 financial goals, and found that 54% of adults were able to meet or exceed their savings goals for the year.
The Covid-19 pandemic and the possibility of an incoming recession continue to impact the savings patterns of young adults. Many Americans are working hard to tackle their student loan and credit card debts while still planning for the future. This is especially true for the younger generations, such as millennials and Gen Z, who are experiencing a different set of challenges and uncertainties when it comes to managing their current lifestyle.
While the savings patterns of Americans have remained consistent over the past few years, it is important to note that saving money is crucial for financial stability and security. By following good financial habits, such as budgeting, reducing debt, and living within your means, you can achieve your savings goals and plan for a better financial future.
Americans’ savings and debt balances differed across generations, according to the survey. So let’s break down the data.
Generation Z (aged 11 to 26)
Generation Z reported the highest 2023 savings goals and second-highest overall savings, according to the survey. Gen Z adults saved $5,833.17 overall in 2022.
Additionally, they reported aiming to save an average of $13,881.77 in the upcoming year. Gen Z are also aiming to retire at 59, the lowest average age of any generation.
Gen Z adults prioritize saving money, which can be attributed to a number of factors. One of the reasons is that they have witnessed the financial struggles of their older relatives, such as their grandparents and great-grandparents from the silent generation, who experienced economic hardships. As a result, they have learned the importance of proper financial management and the consequences of economic crises.
Moreover, Gen Z adults have also observed the investment and savings strategies of their parents from Gen X and the baby boomer generation. They have seen how weak strategies in these areas can lead to financial struggles and uncertainty.
Overall, Gen Z adults tend to take a more cautious approach when it comes to managing their finances, including being more hesitant about taking on debt. Instead, they prioritize learning about saving and investing to secure their financial future. By having a savings-focused mindset, Gen Z adults are better equipped to navigate financial challenges and achieve their long-term financial goals.
Millennials (aged from 27 to 42)
Millennials also prioritized savings in 2022, putting away an average of $6,042.67 — the highest generational savings amount this past year, according to the survey. Their savings were higher than those of both their older and younger counterparts.
Millennials also reported having significant credit card debt in 2022, with an average balance of $5,927.75.
Millennials, like Gen Z, are also prioritizing financial literacy skills and are actively seeking ways to make sound financial decisions. They recognize the importance of managing their daily expenses effectively, including setting aside emergency funds and working towards paying off high-interest debts such as student loans and credit card balances.
Moreover, due to the economic challenges they faced during the Great Recession, many Millennials have developed a cautious approach towards their finances. They are more likely to question traditional financial institutions and are more open to exploring alternative financial solutions, such as digital banking and peer-to-peer lending.
Overall, the financial concerns and priorities of Millennials reflect a generation that has become more financially savvy and pragmatic, and is taking proactive steps towards building a more secure financial future.
Generation X (aged 43 – 58)
In 2022, Gen X reported the lowest overall savings of $3,998.11. Gen X also reported the highest average credit card debt of any generation in 2022, with an average balance of over $7,000.
One potential reason why younger generations may have less in savings is that older adults, particularly those in the Gen X age range, are because they are feeling unprepared for retirement. The latest data from 2022 sheds light on some of the specific challenges faced by Gen Xers, such as balancing work responsibilities with caring for aging relatives. Many are experiencing stress related to saving for retirement, managing unexpected expenses, and keeping debt levels manageable.
For Gen Xers, retirement may be on the horizon or rapidly approaching, and with that comes a need for substantial savings. However, many are finding it difficult to set aside enough money for retirement while also dealing with competing financial priorities, such as caring for aging parents or paying off debt. The pressure to balance these financial obligations can be overwhelming, leading to a sense of insecurity about the future.
Despite these challenges, it is important for Gen Xers to prioritize their retirement savings and seek out strategies that can help them achieve their goals. This might include seeking guidance from financial advisors, looking for ways to reduce expenses, or exploring alternative sources of income. By taking proactive steps to address their financial concerns, Gen Xers can gain greater peace of mind and work towards a more secure financial future.
Gen X adults expect to retire by age 65, and hope to save an average of $6,100 in 2023.
Baby boomers (aged 59 – 77)
Like Gen X, baby boomers reported fewer savings and greater debt compared with young adults. Boomers reported saving an average of nearly $4,500 in 2022.
Boomers also reported an average of $6,784 in credit card debt, slightly lower than that of their Gen X counterparts.
As indicated by the survey results, boomers seemed to feel more financially secure than younger adults in 2022. Yet they also report the lowest average savings goal of $4,942 for 2023. But ultimately, boomers and older adults are looking to mitigate debt and increase savings going forward.
Looking forward to 2023
In the coming year, Americans overall want to continue to bolster their investment portfolios and financial positions. Many adults — 41% of those surveyed — hope to focus on financial basics in 2023, with emergency savings being a top priority.
The most common 2023 financial goals include building emergency funds (46%), being on track to retire at a desired age (38%) and paying off credit card debt (37%).
