The adulthoods of millennials—who are between 26 and 41 years old—have been marked by some of the most monumental economic events in modern history. Though life experiences, debt burdens, and frequent money decisions have left many millennials quite stressed, The 2022 Investopedia Financial Literacy Survey found this generation is also the most confident and invested—literally—in their financial future. 

“I feel like we’ll never have enough,” says Chelsea Elliott, a millennial social worker and mother of two. “I’m afraid of missing a bill, losing our house, and ruining our nanny’s livelihood because we have run out of money. So I started a second business outside of my full-time employment to feel more comfortable financially.”

Though many millennials are stressed, they’re taking back control where they can: in investing. Both the Investopedia survey and interviews with millennials found this generation is proactive and self-guided—mastering the art of the side hustle and building wealth on their terms. 

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Financially Confident but Stressed

Despite the impact of economic events, Investopedia found that 61% of millennials say they’re quite confident about their financial knowledge overall. Many have felt prepared to make a financial decision recently (62%), have engaged in new financial practices like buying cryptocurrency, and actively seek out financial content online. 

Millennials are the most confident generation surveyed by Investopedia. Survey respondents told Investopedia they feel most knowledgeable about saving, consuming (such as spending money and managing a budget), and paying taxes, to name a few. That may be why 63% feel more knowledgeable about their finances compared to their friends. 

However, millennials are quite stressed—74%, in fact, based on Investopedia’s survey. Their confidence is juxtaposed with the pressure to make big financial decisions largely centered on child care, healthcare, homeownership, and retirement preparation at this stage of their lives. 

Millennials are also forward-thinking, juggling their financial future with the present, likely adding to their stress levels. Their top three financial worries are knowing how much to save and finding enough money for savings, debt management, and retirement. 

Kevin Mahoney, a millennial, a Certified Financial Planner, and the host of the podcast Financially Well, says it’s not the planning and decision-making that’s stressful for millennials, it’s the associated tradeoffs. 

Many millennials are in pivotal life stages with many moving parts. In fact, 52% percent of surveyed millennials said they’ve made a big financial decision within the past three months. Being proactive with money becomes difficult when there isn’t enough to spread around and making one big financial decision often means having less to put toward another, Mahoney explained to Investopedia. “It challenges them to question what’s in line with their current values,” he says.

That’s a struggle Elliott knows well. She and her husband made difficult decisions regarding money spent, child care, and finding time for work during the pandemic in the name of their mental health and ability to progress. They agreed that hiring a nanny, though costly, would be the most beneficial for Elliott, who founded a business and plans to start paying herself for the first time soon, an early business milestone.

For millennial Daniella Flores and their spouse, the growth and pursuit of a successful side hustle turned thriving business welcomed another set of stressors around financial decisions: health insurance.

“As my wife and I are planning for me to switch from my [day job] to working on my business full time, we’ve entered the arena of high-cost health insurance,” they said. “[It] makes me uneasy about the future of how healthcare costs will look like for my wife and I, and how the folks behind the medical table will treat us. This goes hand in hand with my worry about retirement and what our costs will be for healthcare by the time we retire.” 

Financial inequalities are another point of stress for Daniella and other millennials, especially when they hinder large money decisions on the horizon. Women earned 84% of what men earn, according to a 2020 Pew Research Center study. For women of color and people who identify as LGBTQ+, the inequality is even greater.

More to Learn—or Catch Up On

Despite their stress, millennials are eager to learn, especially about improving credit scores and reducing debt.

Considering millennials hold a lot of debt ($100,906 on average, according to Experian), the desire to learn about debt management and credit scores goes hand in hand—especially with a federal student loan forbearance through Dec. 31, 2022. They’re finding that because of debt, their financial portfolio is at a disadvantage in comparison to other generations, which their credit reports may consequently reflect.

Millennial women are particularly keen on financial education, perhaps in an effort to close the gender pay gap. Mahoney sees it frequently in his practice: “I work with millennial families and it’s usually the woman who reaches out to me and knows more about their financial situation.” 

Investopedia found women are 10% more likely to be interested in buying a home or getting a mortgage than men are. It’s women who tend to lead in the likelihood of learning to buy a house. They’re also more likely than men to want to learn how to do their taxes. According to Investopedia survey results, women are 10% more interested in the topic than men are. 

Women can be more security-focused, which may explain their desire to be more inclined to learn more about taxes, retirement, investing, and homeownership after being shut out of the conversation for years, says Ramona Ortega, financial educator and CEO of My Money My Future.

“Taxes are a key part of building wealth,” she says. “That’s smart money. If you don’t understand anything about taxes, you’re going to learn very quickly. The more money you make, the closer you get to your time to learn that lesson.”

Retirement is often a stressor for women, too. “Women usually live longer than men but also end up having less in retirement so it was scary for me when I realized my net worth was zero after paying off my debt,” says Melanie Lockert, millennial author of Dear Debt and host of The Mental Health & Wealth Show podcast. 

Invested in Their Futures

With their eyes on the future, Investopedia found millennials are the most invested generation: 63% of millennial survey respondents said they have investments, namely in cryptocurrency and stocks. 

For some millennials, investing is one way they are trying to make up for a delayed start with wealth building and retirement preparation.

“I feel like I made a mistake in that I did not invest for retirement until I paid off my debt at 31. Going from negative net worth to net worth of zero felt good for about a second until I realized I had nothing in my name,” said Lockert, who documented her journey to quickly pay off $81,000 of student loan debt on her blog. “Now, I’m 37 and I do have assets, but I feel perpetually behind. I wish I had put even $20 to $50 a month toward investments instead of focusing only on savings and debt.” 

Though millennials widely pursue investing, they have more to learn, especially when it comes to balancing saving and investing, what makes up a balanced portfolio, and where to invest their money, Mahoney says. 

“I often see millennials with savings they want to invest and just don’t know where to start. They’re asking: Should I put this in my IRA? Should I buy shares?” he said. “They’re more eager to invest and getting more comfortable with it.”

The Investopedia survey found many millennial investors are confident: 65% said they are doing an “above average” job managing their portfolio. 

Worried About Risk

Major economic events, such as the 2008 Financial Crisis that occurred when many millennials were heading off to college or entering the workforce and the COVID-19 pandemic during their peak earning years, have further added to this generation’s stress levels. 

Though many millennials are invested and confident in their financial know-how, there is some wariness towards taking risks. For example, the Investopedia survey found that 37% of millennial investors would classify their portfolios as “lower-risk” investments.

Keen on Crypto 

The stress of financial risk hasn’t stopped millennials from incorporating volatile assets into their retirement plans. Many millennials—38%, according to the Investopedia survey—own cryptocurrency, the most of all four surveyed generations. 

Ortega, who helps millennials make confident financial decisions, has watched this generation—especially its members of color—skipping traditional assets in the market in favor of a start in cryptocurrency. Millennials seem drawn to it because of its accessibility. 

“Cryptocurrency is meeting them where they are. You can buy it with Venmo, through Cash App, and more. So it feels more transparent and accessible,” she said. “It doesn’t feel like it’s hiding behind a bank or information they don’t understand, even though crypto is quite complicated.” 

Seeking Accessible, Relatable Guidance

Many millennials are making financial decisions on their own, relying on accessible resources to learn about money management. According to the survey, 39% of millennial investors research investment information at least weekly, and one in three cited YouTube as their preferred source of investing and personal finance guidance.

Self-sufficiency appears in millennial investing habits, too, as most are choosing self-managed investment platforms over traditional financial advisors or robo-advisors. Millennial interest in financial control and emerging investment options was on display in 2021, as meme stocks soared in value, spearheaded by Reddit investors and later covered by the documentary series Gaming Wall St. 

Seeing that transparency on social media and the ability to engage with people who are directly maintaining investments are attractive, says Ortega, pointing to the role of Reddit as GameStop (GME) stocks rose. It’s an example of the alternative, shame-free financial guidance many people—including millennials—seek.

Traditional financial advisors aren’t accessible to everyone, and even if they are, you don’t necessarily feel comfortable talking to someone who seems out of touch with your personal financial situation, says Mahoney. TikTok and YouTube have changed that. 

“For the first time, we can be pickier about where we learn about our money,” he adds. “You can find someone who is knowledgeable and relatable to give you advice on a personal level as opposed to years ago when everyone was reading the same financial article that only pertained to select people.” 

“Videos are great because they provide easy-to-follow actionable steps, but there’s still only so much you can get from a 30-second sound bite,” says Ortega. 

What Do Millennials Need?

Though additional guidance and accessible wealth-building tools will continue to help millennials manage money and investments, financial literacy can only do so much if societal and economic issues keep working against them, Mahoney says. “Financial literacy does have value, but I think it’s overstated,” he says. 

What’s needed to improve millennials’ finances, help them confidently build wealth, and eliminate stress are systemic changes so people have the money to apply their financial knowledge. That could mean passing legislation that supports income equality, affordable and accessible child care, or increases in the minimum wage, says Lockert.

The most anticipated means of support for millennials may be student loan forgiveness. The burden of student loan debt affects millennial purchasing power, delaying or preventing the generation from making decisions that also support the larger economy, such as buying homes and starting businesses. 

Finally, though millennials are in favor of financial literacy, they also crave support when it comes to their mental state as it pertains to their finances.

“In previous generations, talking about money and how it mentally affected you was hush hush,” says Lockert, who hosts talks about financial shame and emotions. “Millennials are starting to break those taboos. Talking about those emotional money aspects and how it’s affecting your financial situation will lead to a certain kind of financial confidence that’s really necessary to thrive.”

The Bottom Line

Millennials have suffered historic catastrophes in the early part of their careers, including a global financial crisis and a global health pandemic. These caused millennials to start on the wrong foot in terms of financial success. Exasperated by that, high inflation, high rents, and high student loans have impaired their financial prospects, yet, the story has been changing for this generation.

Millennials are improving their financial profile by investing, much of it self-taught and self-guided, and they have seen their average net worth grow. Though their financial condition has improved, many are still stressed about their economic prospects.

Methodology

The 2022 Investopedia Financial Literacy Survey quantifies U.S. adults’ understanding of their own financial literacy at the generational level. The survey was fielded via an opt-in, online self-administered questionnaire between Jan. 27 through Feb. 7, 2022, to 4,000 U.S. adults, 1,000 each of which were from the following generations: Generation Z (18-25), millennials (26-41), Generation X (42-57), and baby boomers (58-76). Quotas and data weighting served to ensure race/ethnicity, gender, regional, and income representation among the total and within each generation. To learn more, see the full methodology. 

Survey research and data analysis led by Amanda Morelli.