Top Lesson Learned from the Great Recession

While a strong majority of millennial Americans say the Great Recession taught them to save now, savings rates vary by gender, according to a new survey.

The 2014 Wells Fargo Millennial Study conducted by Harris Poll found that 80% of Americans between the ages of 22 and 33 (aka the “millennials”) say they learned they should save now in order to survive future economic troubles.

“The silver lining of the recession that started over 5 years ago is that a majority of millennials get that saving is a necessity and even equate it with ‘surviving’ tough times,” said Karen Wimbish, director of Retail Retirement at Wells Fargo. “But millennial women are starting out their working lives making far less than men and, as a consequence, are saving less and feeling less contentment at the start of their working lives.”

Just half of millennial women report they are saving compared to 61% of men, which can be attributed to the large gap in median household income. College-educated millennial men earn $83,000 while their female counterparts earn $63,000. Unsurprisingly women are less satisfied (41%) with their savings than men (58%).

Of those millennials who have started saving, 46% are saving just 1% to 5% for retirement, 31% are saving 6% to 10% and 18% are saving more than 10%.

“Millennial men are earning more, saving greater percentages of their income and report having more accumulated assets,” Wimbish said. “Women are lagging behind men in their savings efforts, and this could explain why they feel less satisfied with their overall financial situation.”

While millennials report they are struggling under the pressure of debt, with 29% citing student loans as their top concern after day-to-day bills, 69% of this age group reported feeling better off financially than others. Nearly the same percentage expects their standard of living before retirement to be better than their parents.

Millennials also showed an increasing confidence in the stock market, although less so than other generations. While 59% of millennials say the stock market is the best place to invest for retirement, it’s still less than the 66% of baby boomers. Male millennials are also much more confident in the stock market with 69% agreeing this is the best place to invest for retirement compared to 49% of women. However, 30% are invested 25% of less in stocks or mutual funds.

“I was pleased to see that millennials are warming up to the stock market, yet concerned to see the huge difference in sentiment among women, who should be on par with men at this stage,” said Wimbish. “Still there’s about a third who are underinvested in stocks or all in cash, and a quarter who aren’t even sure what they’re invested in. Optimism doesn’t always translate into investing in the stock market for retirement.”