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Millennials cut spending to pad their savings

  • Most millennials who have reeled in their spending, did so in order to save more money, according to a new report by Bankrate.com.
  • That's in contrast to previous years, when stagnant income was the main reason most 18-to-36-year-olds felt the need to save.

Americans, in general, are putting a greater emphasis on savings. For millennials, in particular, it's a way of life.

The majority, or 60 percent, of 18-to-36-year-olds who have reeled in their spending, did so in order to save more money, according to a Bankrate.com report released Tuesday.

That's in contrast to previous years, when stagnant income was the main reason most Americans felt the need to save. (Over this time frame, the median household notched solid economic gains.)

Other top reasons cited to rein it in included worries about the economy, job security as well as debt, according to the survey. Bankrate polled more than 1,000 adults in October.

In addition, millennials were more than twice as likely to set a spending cap in order to save more, compared with older generations, Bankrate said.

"Millennials have an inclination toward saving that we have not seen from our predecessors," said Greg McBride, Bankrate's chief financial analyst.

In part because of the financial distress so many households faced during the Great Recession that this generation witnessed early on, millennials also have a greater aversion to debt and less focus on consumption, McBride said. "Those all bode very well for their financial future."

Millennials' financial conservatism is paying off. They are the generation most likely to say they are comfortable with their savings now compared to one year ago, according to Bankrate.

"It's great to see millennials so focused on saving," McBride said. However, "everyone should prioritize saving and take advantage of the tax benefits of retirement accounts now — workplace 401ks and Roth IRAs — and shop around for the best savings rates to store, and add to, your emergency fund," he said.

"Your future self will thank you one day."

More from Your Money Your Future:
Under-35 Americans share two stressful views on what money means to them
Sibling money fights are rare, but there's a common cause: Parents
Haven't saved enough for retirement? You're not alone

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