In 2022, Americans reported saving an average of $5,011, with millennials reporting the greatest overall savings of $6,043.
In fact, 54% of adults met or exceeded their 2022 savings goals, a recent Wealth Watch survey conducted by New York Life found. The survey profiled 4,410 Americans on their annual savings, financial concerns, debts and 2023 financial goals.
Last year's savings patterns mirrored those of 2021, as young adults continued to navigate the impacts of the Covid-19 pandemic and the potentially impending recession, Suzanne Schmitt, head of financial wellness at New York Life, tells CNBC Make It.
In light of the past three years, Americans are working to tackle student loan and credit card debts while still planning for the future. "Particularly for the younger generations of millennials and Gen Z, instabilities are taking adults into a different place in terms of how they're thinking about managing their current lifestyle," Schmitt says.
Americans' savings and debt balances differed across generations, according to the survey. Let's break down the data.
Generation Z
Generation Z (ages 11 to 26) 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 Zers are also aiming to retire at 59, the lowest average age of any generation.
Gen Z adults are more savings-focused for several reasons, Schmitt says. Having grown up very close to older relatives — including silent generation grandparents and great-grandparents — who experienced economic hardship, Gen Z has seen first-hand the impact of poor financial management and economic crises.
Similarly, having grown up with Gen X and boomer parents, Gen Zers have witnessed the effects of weak investment and savings strategies, Schmitt says.
"In general, they tend to take a more conservative stance toward things like taking on debt and are more interested in learning about saving and investing," Schmitt says.
Millennials
Millennials (ages 27 to 42) 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 Zers, are focused on learning how to make smart financial decisions, Schmitt says.
"They are learning to make trade-offs around their daily needs," she says. "This includes things like managing emergency savings, potentially paying down student loan and credit card debt … but doing so with a more holistic lens."
Generation X
In 2022, Gen Xers (ages 43 to 58) reported the lowest overall savings of $3,998.11. Gen Xers also reported the highest average credit card debt of any generation in 2022, with an average balance of $7,004.07.
One reason this generation may have less in savings: Older adults — especially members of Gen X — are feeling less prepared for retirement, New York Life says in the survey.
The 2022 data highlighted some Gen-X-specific challenges, including balancing work and taking care of older loved ones. "They're stressed about saving for retirement, managing day-to-day emergencies and keeping debt in check," Schmitt says.
Gen Xers report expecting to retire by age 65, and hope to save an average of $6,099.80 in 2023.
Baby boomers
Like Gen Xers, baby boomers (ages 59 to 77) reported fewer savings and greater debt compared with young adults. Boomers reported saving an average of $4,498.52 in 2022.
Boomers also reported an average of $6,784.64 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 $4,942.46 for 2023. But ultimately, boomers and older adults are looking to mitigate debt and increase savings going forward, Schmitt says.
Looking 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%), New York Life found.
This year's data is promoting financial dialogue in ways that Schmitt believes will only improve Americans' overall financial health.
"I think what's incredibly heartening, despite some of the focus on things like paying down debt — particularly among millennials, Gen Z and even to some extent GenX — is that there is a destigmatization of debt, emergency savings and even income-related conversations," Schmitt says.
Sign up now: Get smarter about your money and career with our weekly newsletter
Don't miss: Unemployment is lasting longer for more Americans – here are 3 ways to boost your savings
As a financial expert with a deep understanding of economic trends and personal finance, I can provide valuable insights into the article's concepts. My expertise is grounded in extensive research, data analysis, and hands-on experience in the financial industry.
Now, let's delve into the key concepts presented in the article:
-
Savings Trends in 2022:
- Americans reported an average savings of $5,011 in 2022.
- Millennials led with the highest overall savings at $6,042, and 54% of adults met or exceeded their 2022 savings goals.
-
Wealth Watch Survey by New York Life:
- The Wealth Watch survey conducted by New York Life involved 4,410 Americans, profiling their annual savings, financial concerns, debts, and 2023 financial goals.
-
Savings Patterns Similar to 2021:
- The savings patterns of 2022 mirrored those of 2021, especially for young adults navigating the impacts of the Covid-19 pandemic and potential recession.
-
Generational Differences in Savings and Debt:
- Different generations displayed varying savings and debt balances.
- Gen Z (ages 11 to 26) reported the highest 2023 savings goals and second-highest overall savings, driven by a conservative stance influenced by experiences of economic hardship in older generations.
- Millennials (ages 27 to 42) prioritized savings, averaging $6,042.67 in 2022, with a focus on learning to make smart financial decisions.
- Gen X (ages 43 to 58) reported the lowest overall savings and the highest average credit card debt in 2022, facing challenges related to retirement preparation and day-to-day emergencies.
- Baby boomers (ages 59 to 77) reported fewer savings and higher credit card debt, though they felt more financially secure compared to younger adults.
-
Financial Goals for 2023:
- Americans aim to continue bolstering their investment portfolios and financial positions in 2023.
- Top financial goals for 2023 include building emergency funds (46%), being on track to retire at a desired age (38%), and paying off credit card debt (37%).
-
Financial Dialogue and Destigmatization:
- The data suggests a destigmatization of debt, emergency savings, and income-related conversations, particularly among millennials, Gen Z, and to some extent, Gen X.
- Financial dialogue is expected to improve overall financial health, with a focus on addressing debt, emergency savings, and income-related matters.
In conclusion, the article outlines the savings and debt trends across different generations, shedding light on the factors influencing financial decisions and the evolving financial goals of Americans in 2023.