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Millennials aren’t saving a dime

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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 2%, 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 3%.

Millenials are struggling in spite of an improving job market, with an unemployment rate that dipped to 5.8% 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%, 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.

1 Comment

  • d. blow

    People every where are having a hard time saving money. A lower unemployment rate doesn’t really mean anything. There are many unemployed that simply stopped looking for work after several years and/or took minimum wage jobs; sometimes two full time minimum wage jobs and still not making as much income as the job they lost. The youth of this country are coming out of school and stepping into uncertainty, carrying massive student loan debt and still not finding decent paying jobs. Corporate America is paying lower wages because they can; there are way too many people looking for jobs. I still hold out hope that things will change for the better but, I’m really not seeing it so far.

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