A new report confirms what we all fear to be true: Americans, no matter their age, are generally terrible at managing their money. In short, we all need to save more. A lot more.
This insight comes from Financial Finesse, a think tank geared toward helping people reach financial independence and security, in its 2015 generational research study released today. Financial Finesse’s assessment of each generation’s financial health is based on employee responses to its financial wellness questionnaires, which is used at more than 600 companies in the country.
In this study, generations are broken into millennials (employees younger than 30), Generation X (30 to 54) and baby boomers (55 and older). Based on what people reported about their financial situations, no group gets bragging rights or much room to criticize their older or younger counterparts. As for how they scored, it’s pretty even: On a scale of 0-10 millennials got a 4.6 for financial wellness, Gen X a 4.7 and boomers a 5.7.
The youngest segment of the workforce seems to do pretty well with the in-the-moment financial decisions. Essentially, these consumers were scarred by the debt problems they saw in the recession, and they’re more likely to spend within their means, have plans to pay off debt, pay their credit card balances in full and avoid bank fees than Gen Xers.
Despite being in the best position to prepare for retirement (the earlier you save, the easier it is to reach your goals), millennials listed it as their third most important priority, after paying off debt and managing cash flow. The other generations had retirement planning at the top.
The debt issue is really what sets millennials apart. More of their income goes toward student loan payments than it did for other generations when they were younger, and those payments may be cutting into savings potential. The lifetime cost of debt calculator shows how even low-interest debt can impact your savings.
Gen Xers have a higher median income than millennials, but they have a harder time managing the bills. This report attributes that to having so much going on, with managing their own finances, supporting children and caring for aging parents taking up a lot of time and resources. At the same time, the report identifies this generation as focused on improving their credit, despite the trouble they have paying bills on time and spending within their limits. (You can see your credit scores for free every month on Credit.com.)
With so many demands on their finances, Gen Xers generally don’t have enough savings to fall back on, sometimes leading them to take money from retirement funds in a pinch. With each passing year, it gets harder to catch up on retirement savings, which could really hurt Gen Xers as they near the end of their careers.
With insufficient retirement savings threatening the financial stability of many older Americans, boomers need to focus on analyzing their investments and adjusting their living standards to meet their resources. There’s not much time to make up for poor retirement saving earlier in life, so boomers may have to re-evaluate one of the few things they can really control: Their expectations.
We’re not all doomed for financial ruin, but this report highlights something that cannot be emphasized enough: Setting long-term goals and sticking to plans for meeting them should dominate your financial planning. Do it your own way — there are many effective approaches to balanced money management — but don’t dismiss the importance of planning ahead.
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This article originally appeared on Credit.com.