For millennials, the pandemic helped kick-start their savings

Between layoffs and unexpected medical costs in the wake of COVID, the pandemic caused financial setbacks for thousands of working Americans. But for one demographic, it also granted them the time and space to kick-start their savings.

Nearly one-in-three millennials reported boosting their funds, saving more than $4,200 on average, according to the latest New York Life Wealth Watch survey. The pandemic has also prompted millennials to practice wealth-building habits by seeking out advice from financial professionals.

Due to the economic slowdown, millennials reported that they were no longer paying for things like daycare, student loan payments and rent, as well as everyday costs like gym memberships, coffee runs, and going out to eat, adding to their savings.

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“One silver lining over the last several months is the ability for some millennials and GenZers to build nest eggs due to temporarily paused expenses,” says Aaron Ball, senior vice president and head of insurance solutions, service and marketing at New York Life. “Having these nest eggs to use as emergency funds or to put towards achieving financial goals can be a game-changer.”

The pandemic has led to new shifts in financial thinking and strategy in their everyday life, according to Ball. As a result, younger generations are more focused on their finances, with over half of total respondents saying they are thinking about their finances more this year compared to last year, the survey found.

For some, that focus includes continuing to save for the long-term, seeing as millennials are now almost twice as confident as Gen Zers that their retirement savings will last the rest of their life. For others, it may mean preparing for more imminent expenditures, like resumed or increased mortgage and rent costs (19%), resumed or increased student loan costs (11%) and resumed or increased child care costs (18%).

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Across generations, the top three long-term financial goals reported were building emergency funds, paying off credit card debt and being on track to retire and their desired age. Ball says savers can get on the right track by making good on their willingness to tap into the expertise of financial advisers.

“Regardless of what stage you’re in, working with a trusted partner can help build the right strategy,” Ball says. “Helping prioritize short and longer-term goals will remove some of the “now what?” from the equation.”