Millennials managed to stash away more cash than any other generation last year, according to New York Life's recent "Wealth Watch" survey.
Just over half of American adults — 52% — met or exceeded their savings goals in 2023, managing to save an average of $6,138 despite facing economic challenges like inflation and high interest rates. That's up from an average of $5,011 saved in 2022.
This jump in savings could be attributed to more Americans building and executing financial strategies, New York Life's head of consumer insights Donn Froshiesar tells CNBC Make It.
"Having a financial strategy in place plays a key role in meeting savings goals," he says. "63% of adults with a financial strategy met or exceeded their savings goal for 2023, compared to only 37% of those without a financial strategy."
Here's how much Americans saved on average in 2023, by generation:
- Gen Z (ages 12 to 27): $6,441
- Millennials (ages 28 to 43): $9,299
- Gen X (ages 44 to 59): $5,132
- Baby boomers (ages 60 to 78): $4,060
Millennials saw the largest increase in savings from 2022 to 2023, which "may be due in part to external factors, like being able to save more during the student loan repayment pause, or using 2023 to save for a down payment on a house, as we saw the housing market slow in 2023," Froshiesar says.
Froshiesar isn't surprised that the youngest generations of American adults saved the most, noting that most Gen Zers and millennials are still working. They're also more likely than older generations to have long-term savings goals, like purchasing a home.
"Gen Xers and boomers may be more focused on funding children's college educations, caring for an aging parent, saving for retirement or even entering a phase where they are spending down assets in retirement rather than saving," says Froshiesar.
How to save more in 2024
If you want to add more cash to your savings this year, setting yourself up for success comes down to having a solid financial strategy. Here are three tips on how to build one.
1. Take stock of your current finances
Those looking to save more should carefully examine their current financial situation, including income, debt and investments, Froshiesar says.
From there, "take the time to write out specific short-term and long-term financial goals that also include a desired timeframe to stay accountable," he says.
2. Focus on eliminating debt
"If credit card debt is in the mix, individuals should consider diverting more funds to paying down credit cards with the highest interest rates," says Froshiesar. "Since debt can be a major barrier to building wealth, it's essential to have a holistic strategy in place that addresses both savings and debt management."
By paying off credit card debt, which tends to snowball faster than student loan debt, thanks to the high interest rates credit cards often carry, individuals can contribute more toward their savings — and in turn lower their dependence on credit cards in the future.
"This all contributes to greater financial resiliency," Froshiesar says.
3. Check on your strategy regularly
To reap the benefits of a financial strategy, you have to stick with it.
From using a pen and paper to budget to following the 80/20 rule, there are a number of methods recommended by financial professionals to help you stick to your plan.
But "whatever method a person decides to use for paying down debt, the most important step is to have a strategy in place, and to reassess that strategy over time to ensure it continues to align with their goals, especially when life changes occur," Froshiesar says.
Want to land your dream job in 2024? Take CNBC's new online course How to Ace Your Job Interview to learn what hiring managers are really looking for, body language techniques, what to say and not to say, and the best way to talk about pay.
