The mass media fascination with millennials has left us with no shortage of studies and assessments of millennial behavior, and millennial money habits are no exception.

Judging by the headlines, millennials are either on the cusp of financial disaster or super saving rockstars.

So, which is it? Are millennials helpless overspenders with no consideration for their overwhelming loads of debt, or are they in fact the most money conscious generation of our time?

Check out these latest findings on millennial money habits – good and bad- and decide for yourself.

 

Bad Millennial Money Habits

Millennial Overspending 

• One in ten millennials overdraft more than ten times a year according to data from the Consumer Financial Protection Bureau.

 

• A recent Rent.com survey of 1,000 millennial renters between the ages of 18 and 34 found that over half of those surveyed were spending more than the suggested 30% of their income on rent and nearly one in five were spending more than half their income on rent each month.

 

• According to The Knot’s 2014 Real Weddings Study, the average wedding cost, excluding the honeymoon was $31,213 in 2014. A hefty price tag considering the oft cited burden of student loan debt, now an average of around $35,000.

Millennial Debt 

 

• Speaking of student loans, a report from the Brookings Institute found that many students are completely unaware of their debt. 28% of students with federal loans reported having no federal debt and another 14% with federal loans said they had no student debt at all.

 

• Research from Experian found that millennials are more than twice as likely to pay their credit card bills late compared with baby boomers. The average millennial credit score is just 628, well below the boomer average of 700.

 

The Millennial Savings Gap

 

• Bank of America’s Millennial Money Habits survey found that one in five millennials haven’t even started saving, and three in ten don’t have savings accounts. Of those who do, nearly 40 percent have less than $5,000 saved.

• A Bankrate survey found that 69% of people ages 18 to 29 had no retirement savings at all.

• Business Insider reports that of employees 25 and under, less than one-third participate in a 401(k).

 

Good Millennial Money Habits 

 

Millennial Budgeting

 

• A recent survey from T Rowe Price suggests millennials may be the “Money-Conscious generation” as they are better about tracking their spending and sticking to a budget than baby boomers. 75% said they track their expenses carefully (as compared to 64% of baby boomers) and 66% say they stick to a budget (compared to 55% of baby boomers).

 

Millennial Retirement Saving 

 

• The T Rowe Price study also found that 40% of millennials have increased their 401(k) contributions in the past twelve months.

• Fidelity’s Millennial Money survey found that nearly half of millennials have already started saving for retirement, with 43 percent indicating they have a 401(k) and 23 percent indicating they have an IRA.

 

So… are millennials really money conscious savers or blissfully unaware spendthrifts?

 

There are undoubtedly a combination of both financial types represented in this diverse, largest living generation, but assuming some semblance of an average or median exists, what does the data really say about millennial money habits?

 

In delving deeper into each of these studies I find the data suggesting that millennials exhibit good financial habits is largely gathered from surveys. In other words, the conclusion that millennials are money conscious comes from millennial self-assessments. Whereas the data suggesting troubling millennial financial behaviors comes from more objective measures, like actual spending.

 

In other words, there appears to be a disconnect between the way millennials see their financial behaviors and the manifestation of their fiscal reality.

 

Perhaps the most telling millennial money data comes from a recent Merrill Edge survey, finding that 88% of millennials say they intend to save more in 2016, but only 36% say they plan to spend less.

 

Millennials seem to understand the need to save, and indicate the intention to do so, but when it comes to implementation, a kind of delusional optimism appears to take over.

The only way to enjoy more savings without spending less is for income gains to fill in the gap – a reality hard to come by in today’s job market, even early on in a career, and dangerous to bank on.

 

See: The Danger in Assuming Future Income Increases

 

This millennial optimism for the future has been noted in many studies, including a recent Wells Fargo survey finding that Americans ages 18-35 are the most optimistic about their finances, and Bank of America’s Better Money Habits Millennials Report finding that 80% of millennials think they’ll be financially better off than their parents – though more than half are still living paycheck to paycheck.

 

I applaud millennial optimism, particularly following the abysmal circumstances of their early adulthood – namely soaring college costs, crushing student loan debt, the sluggish post-recession job market and rampant underemployment. That said, I feel compelled to caution my peers not to rely solely on the passage of time as means to a more financially sound future.

 

There is a fine line between optimism and delusion and to stay on the right side, action is required.

 

Optimistic thoughts won’t pay down your debt or fund your retirement, actions and behaviors in alignment with achieving those optimistic future realities will.

Mindset undoubtedly matters, but we can’t dismiss reality from the formula, and a look at the reality suggests that we millennials still have a long way to go in bringing our financial habits today in line with what we want our financial future to look like.