Younger millennials might be more financially mature than those just a few years older, according to a survey by PNC Financial Group.
Adults ages 20-24 are less likely to carry debt and more likely to save than adults ages 25-29, according to results from PNC's Financial Independence Survey, released Thursday.
The younger millennials, as the 20-somethings who came of age during the turn of the millennium are called, entered the adult world at the height of the economic downturn, making them more conscious of their financial decisions and less likely to have access to financing, said Cary Guffey, a certified financial planner and financial adviser at PNC.
Thirty-one percent of 20-24 year-olds are debt free, according to the survey, compared with just 21 percent of 25-29 year-olds. And the average debt for that younger group ($17,100) is less than half that of the older one ($35,600).
The credit crunch at the end of the last decade made it more difficult for younger millennials to own unsecured credit cards and procure other forms of financing. It also encouraged them to avoid the mistakes of older millennials, such as taking on too much debt.
Economic downturns often cause people to delay certain life stages -- marriage, children, home ownership -- until better economic circumstances prevail, Mr. Guffey said.
Fifty-two percent of the younger cohort still live with parents or relatives, compared with 28 percent of the older group. And just 20 percent of the younger group has children, compared with 42 percent of the older group.
In short, the older group of millennials has accrued more debt because they have more expenses.
"They're coming into the job market at a time when companies aren't hiring, when credit has been restricted," Mr. Guffey said of the younger group, "and they're going to put off those life stages that add an increase in expense."
While both groups have similar education-related debt -- an average of $8,500 -- older millennials have more debt related to mortgages, medical bills, car loans and credit cards.
Since younger millennials have fewer expenses and less debt, they have more of their income to save. Of the younger group of 20-somethings, 90 percent save at least a portion of their income on a regular basis, compared with 83 percent of the older group.
There are a few steps millennials can take to improve their financial standing, Mr. Guffey said. He suggests people check their credit score every year at AnnualCreditReport.com to look for discrepancies and to get a better idea of their financial standing. He also urged people to enroll in retirement savings programs, particularly 401(k) and 403(b) programs.
He also advised anybody with debt to distinguish their good debt -- mortgages and student loans -- from bad debt -- credit cards -- and suggested paying off the bad debt as soon as possible.
PNC conducted the survey of 3,288 young adults over 17 days in June. The survey was designed and managed by Artemis Strategy Group of Washington, D.C.
Michael Sanserino: firstname.lastname@example.org, 412-263-1969 and Twitter @msanserino.