PhotoThat old stereotype of young people frittering away their money on trivialities and plunging deep into debt may be in need of serious updating. The evidence continues to suggest that isn't the case at all.

The second PNC Financial Independence Survey has uncovered some interesting facts. No only are young people doing a pretty good job of managing their money, but the younger members of the Millennial generation – those 20 to 24 in particular -- are doing the best.

The entire group, regardless of income, holds debt but younger Millennials hold less than their older peers. The younger set reports just $17,000 in debt compared to $35,600 for those 25-29. Nearly one third of the younger set carried no debt at all, compared to the older set, noticeably lighter at just one in five.

Big drop in debt

There was another key finding: Among respondents with some level of college education, average reported debt came in at $31,800, a significant 30 percent drop from $45,400 in 2011. That includes credit cards, car loans, student loans, and mortgages.

"Financial maturity in this generation has noticeably shifted," said Cary Guffey, financial advisor at PNC Wealth Management. "Younger millennials just entered adulthood when the economy shifted downward and as a result, it's clear they've become more cautious by avoiding debt."

This study dovetails with another done in 2013 by McGraw Hill Federal Credit Union, which found that only one in 20 of Millennials uses a credit card – which is not good news for the credit card industry. For nearly 60%, cash is a primary payment method, followed by debit cards at 36%. Most notably, nearly 70% expect to cover part of the cost of college, and 60% say they have a plan for college expenses.

Instead of shopping for the newest designer labels, young people are frequenting thrift stores. Getting a bargain is now cool.

Learning what not to do

“Teens today are learning from the mistakes of adults,” said Shawn Gilfedder, President and CEO of McGraw Hill Federal Credit Union. “Five years out from the recession, the job market does not look that hopeful for them, even with a college degree. They're recognizing that responsibility first resides with themselves.”

The PNC study found that both younger and older Millennials are carrying about the same amount of college loan debt, but there the similarity ends. The older set, according to the survey, has double the level of car loans, triple the amount of credit card debt and quadruple the amount of mortgage debt. The later is likely explained by the fact the younger set hasn't entered the home buying life stage yet.

It also shouldn't be too surprising that the number of Millennials who report saving money is also trending down. Reported saving is down six percent since PNC's 2011 survey.

Bigger savers

But the frugality trend is still apparent among the youngsters. Ninety percent of the younger set are putting money away, compared to 83% for the older set. And both probably are well ahead of what their parents are managing to put away.


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