9/4/2023 0 Comments Finances for young adultsThe trend among young adults of having high debt and low savings becomes even more concerning when we examine the uncertainty they demonstrate, as a group, about types of debt. Young adults demonstrate an alarming confusion regarding good debt versus bad debt. These options involve high interest rates that will almost certainly add to these young adults’ debt. While these are typically low- or no-interest ways to make ends meet, many young adults chose expensive alternatives when times got tough-including skipping bill payments (20%), carrying a credit card balance (16%), and/or taking out a loan from a payday lender (7%). When young adults found themselves running low on funds in the past year, 43% reported that they turned to their parents, and 25% borrowed from friends. And how they choose to bridge the gap when they’re short on cash can all too easily exacerbate the problem. Young adults’ go-to sources for quick cash may be putting them deeper in debt.ĭebt is a serious issue for Gen Zers and Young Millennials. A small but still significant percentage rely on financial aid (4%), government benefits (4%), freelancing for companies like Uber and Postmates (3%), or trust funds (2%) as their primary source of income. Other primary sources of income include part-time work (22%) and odd jobs (7%). When asked about their primary source of money, 25% of young adults point to their parents, while only 23% list a full-time job. Many consistently rely on their parents for most of their cash. 25% of young adults get most of their money from their parents.Ī large part of the reason young adults feel financial independence is years away may be that they aren’t calling on mom and dad just for occasional help to make ends meet. The average age at which Gen Zers expect to achieve financial independence is 25 for Young Millennials, that age jumps up to 29. Yet only 12% of Gen Zers and 28% of Young Millennials say they are already financially independent-and most believe it’s at least a couple of years off for them. ![]() While 16% define financial success as getting a high-paying job, and 12% say it’s owning a house, far more young adults (46%) define financial success as being able to live independently, without financial help from their family.īecoming completely financially independent is a top goal for 75% of young adults. Four in five young adults are not financially independent-yet 75% consider it a top goal. Perhaps most importantly, the majority of young adults are experiencing difficulty attaining financial independence, but say it’s their top goal. More than three-quarters (76%) of young adults surveyed believe they will have a better financial future than their parents, despite simultaneously reporting significant present-day financial struggles.įor instance, one-third of young adults (33%) reported skipping at least one meal in the previous year due to lack of funds, and nearly one-fourth (21%) sold possessions to cover a bill they would not otherwise have been able to pay. Their expectations for the future also appear to be in conflict with their current financial reality. Additionally, more than half (53%) believe they’ll inherit assets from their parents-while only 40% of parents say they plan to leave an inheritance. They expect, on average, to retire at age 60-seven years earlier than full Social Security benefit eligibility for their age bracket. The majority of young adults are optimistic about their financial futures, but to a degree that some might find a tad unrealistic. Young adults believe their futures will be bright-but lack a strong basis for that belief. With all that in mind, here are additional key survey findings that reveal the financial challenges facing Gen Zers (those born between 19) and Young Millennials (those born between 19)-along with resources to help steer conversations about money management toward future financial success. In fact, most young adults (69%) say their parents are good financial role models, and many (39%) say their parents are their most trusted source for financial advice. And research shows they trust their parents to provide the best guidance in this arena. This comes as a surprise when you consider that more than 80% of the young adults surveyed witnessed their parents experience financial hardship during the Great Recession.įortunately, these young adults also exhibit a strong interest in learning more about how to manage their finances. The 2018 Schwab Young Adult Financial Literacy Survey found that just a decade after the financial crisis, young adults are optimistic about their financial futures.
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