While Americans aged 25 to 44 may have a lengthy list of life goals, achieving financial independence is their highest priority, according to a new survey.
The 2024 Millennials' Financial Milestones study by the CFP Board reveals that nearly half (46 percent) of millennials prioritize financial stability, making it Gen Y’s most widely held ambition.
Other significant goals include traveling (39 percent), enjoying a long, healthy retirement (38 percent), achieving career fulfillment (32 percent), and fostering relationships with family and friends (31 percent).
"It's no wonder financial independence and stability are paramount for millennials," Kevin Keller, CEO of CFP Board said in a statement. "The eldest millennials entered the workforce during the 2008 financial crisis, which left lasting impressions."
A strong majority of millennials have little doubt they can reach their goals, with 70 percent believing in their ability to achieve them, and 58 percent having a positive financial outlook. Much besides, 43 percent perceive their financial situation as better than their parents or guardians at the same age, while only 32 percent feel they are worse off.
There might something to that. In an analysis of data from the Federal Reserve, the Center for American Progress found US adults under 40 saw a 49 percent increase in their wealth from the fourth quarter of 2019 to the same period in 2023. That surge of wealth, which was broad-based across income groups, has propelled today’s young Americans to a net worth level exceeding any period in history, even after adjusting for inflation.
The CFP Board’s survey found 63 percent of millennials are confident in their ability to achieve financial milestones, with 41 percent believing it is easier for them to achieve these milestones compared to their parents or guardians.
Three-fifths (58 percent) of millennials in the survey said they’re focused on feeling financially independent or stable. To reach that goal, they’re prioritizing several strategies including creating a savings account or emergency fund (57 percent), becoming financially self-sustaining (50 percent), minimizing debt (50 percent), owning a home (47 percent), and funding a retirement account (41 percent).
Notwithstanding their broad optimism, 90 percent of millennials see challenges in the way of their financial goals. The top obstacles include having too many expenses (47 percent), insufficient savings (36 percent), and significant debt, including credit card and student debt (34 percent).
To meet their financial milestones, millennials are taking several steps such as finding new ways to earn extra money (49 percent), reducing spending on necessary items (47 percent), and cutting back on discretionary expenses (45 percent).
Additionally, 44 percent are developing and sticking to a budget, 34 percent are saving for future known expenses, and 31 percent are opening or adding to retirement or investment accounts.
"By developing a financial plan, millennials can enjoy their lives today while staying on track to achieve their life goals of financial independence and stability," said Kevin Roth, managing director of research at CFP Board.
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