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Millennials aren’t saving a dime

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Image: MGN Online

NEW YORK (CNNMoney) — Cash-strapped millennials are slipping into the red.

People younger than 35 are not saving money, according to a study by Moody’s Analytics. In fact, their savings rate has dipped to negative two percent, meaning that they’re spending more than they have. They’re the only age group that has a negative savings rate.

In contrast, workers between the ages of 35 and 44 have a positive savings rate of about three percent.

Millenials are struggling in spite of an improving job market, with an unemployment rate that dipped to 5.8 percent in October as the U.S. economy added 214,000 jobs.

But wages have remained stagnant, barely budging since the 1990s. So even with a low unemployment rate, millennials are having a tough time making ends meet. Many have taken on hefty student debt to attain the skills they need to be competitive in the work force.

Things were a lot worse just a few years ago. Millennials had a negative savings rate from 2004 to 2009, bottoming out in 2007 with a deficit of about 15 percent, according to Moody’s.

They recovered in 2009 and managed to stay above water until 2012, when they slipped back into the red.

Many college-educated millennials are able to find professional jobs, but they have limited upward mobility according to Babson College finance professor Dr. John Edmunds.

“The millennials are waiting for those above them to either retire or die,” he said. “But the baby boomers are not going to give it up that easily.”

3 comments

  • Watcher

    It’s all good. Fiat currency is only created thru debt anyways and is intrinsically worthless. The only people who are punished the most are the responsible ones who save their money, as it’s stolen away thru inflation. Remember, that dollar bill you have is not backed by Gold or Silver. Smart people are exchanging the worthless paper for real goods that they can use.

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