According to a recent Wells Fargo survey of U.S. adults between the ages of 22 and 33 (millennials), spending, saving, and borrowing habits are much different than previous generations.

Even though most millennials have a higher debt load, thanks to the Great Recession they see the importance of saving for retirement from an early age and are more confident in their retirement-planning abilities. If millennials become just a little more confident in the stock market and a little less dependent on credit cards, the retirement crisis we keep hearing about could be less of a problem that experts would have you believe.

Lots of debt, but not the kind you think

It’s true that millennials are a debtor generation, with about 40% of those surveyed saying they feel overwhelmed by their debt, nearly double the amount of baby boomers who feel the same. Nearly half of millennials spend 50% or more of their paycheck paying down debt.

However, despite what most news reports would have you believe; in most cases it’s not student loan debt that’s drowning our younger adults. While it’s definitely a significant expense, averaging 12% of monthly pay, it’s actually the third highest form of debt.

Surprisingly, credit card debt is what’s really drowning this generation, eating up 16% of the average millennial’s pay.

And unlike student loans, there isn’t even a good justification for carrying this level of debt. The average millennial who went to college earns $72,800, more than double the $34,700 average salary of non-college grads, so it actually makes the $29,600 in student loan debt carried by the average 2012 graduate seem like a pretty decent deal.

For the average millennial, eliminating credit card debt could mean almost $9,000 of their income would now be free to use for savings or to ease the burden of other living expenses.

Much better savers than their parents

The fact that 56% of millennials say they live paycheck-to-paycheck makes the survey’s findings on spending habits even more impressive.

flickr/401(k) 2012

Nearly 60% of millennials are actively saving for their own retirement, and more than half of those who are saving are putting away 6% or more of their income.

College-educated millennials average nearly $45,000 in investable assets, so there is definitely progress being made toward responsible saving in this generation. In fact, 60% of American workers of any age have less than $25,000 put away for retirement, and 36% have less than $1,000.

The majority (72%) of millennials feel confident that they will be able to save enough to create the retirement they want, and most seem to have a better idea of what they’ll need to do that. 60% of millennials say they have a good idea of how much they’ll need to save to retire comfortably, as opposed to less than half of baby boomers.

However, the question of whether or not they are investing wisely is another matter.

The confidence to invest right is not where it needs to be, but we’re getting closer

In the only area in the survey where millennials lag behind their older counterparts is investing. Millenials seem to have confidence in their ability to deal with financial problems and to save money, but many don’t understand that saving alone won’t get them to their goals.

Only 59% of millennials say the stock market is the best place for their retirement savings, which is a substantial increase from last year’s survey but still behind baby boomers, of which two-thirds are confident in the market. One-quarter of millennials who are actively saving for retirement have no idea how much of their savings is in stocks and another 30% say less than one fourth of their savings is invested in stocks or mutual funds.

The trend that needs to continue

While the saving habits of millennials are very good, simply stashing money in a savings account is not going to produce the million-dollar retirement nest egg many millennials believe they will need. As the memory of the Great Recession continues to fade, the combination of market confidence and sound saving habits could help solve the problem of a retirement crisis in the U.S.

Top dividend stocks for Millennials to buy for the long haul