Young Millennials Move towards Financial Independence
America’s youngest consumers pull ahead of mid-generation counterparts.
Life for young professionals fresh out of college is rough. Recent grads are facing bigger challenges than Generation X and includes higher student loan debt and limited job opportunities. On the other hand, a recent survey from financial experts at TD Bank found that the youngest consumers – or Generation Z – are pulling ahead of the youngest Millennials.
- Gen Z members, (ages 17-20) have almost as many financial accounts as their young millennial counterparts (ages 21-24) – 2.4 accounts versus 3.3.
- 29% of Gen Z respondents knew their credit score
- 38% of both groups combined are extremely or very concerned about their ability to repay student loans and personal debt.
- 31% of Gen Z members have student loan or personal loan debt, averaging $13,119. However, 30% of Gen Z respondents didn’t know how much the borrowed exactly.
- 24% of Gen Z members are getting spending money from family versus 7 percent of young millennials.
- 84% of Gen Z respondents are putting money into savings while 82% of young millennials are.
- 47% of Gen Z and 63 percent of young millennials say they pay their bills on time.
“It is encouraging to see young adults taking so much more initiative than before.” says April Lewis-Parks, Community and Public Relations Director at Consolidated Credit. “Getting financial basics like budgeting, bill payment and debt management to repay student loans set up early means that these young Americans will have a leg-up in a few years when they take bigger financial steps, such as buying a first home.”
Additionally, Lewis-Parks says thoughtfully provided parental support can be a significant boon to young professionals trying to get ahead. Parents just need to be careful that support doesn’t become a crutch that adult children refuse to give up.
“Parents can do things that may seem small to them, like keeping children on the parents’ car insurance or continuing to pay for their mobile service on a family share plan, in a way that helps the child immensely without burdening the parents’ finances,” Lewis-Parks affirms. “What parents want to avoid is continuing to offer that kind of support even after the children achieve an income level that would allow them to be completely independent.”
Consolidated Credit encourages parents and children to sit down and talk about money. Making plans together that transition the child from support to independence can go a long way to reducing financial fights in your family.
“When adult children are given a cutoff date for financial support, it gives them a goal to work towards with a definitive timeline,” Lewis-Parks concludes. “This helps the family avoid a situation where parents feel their generosity is being taken advantage of by adult children who are still working to achieve full financial independence.”