More than half of young Americans (58% of Gen Zs and 52% of young millennials) expect to be more financially successful than their parents, according to a new survey conducted by The Harris Poll on behalf of TD Ameritrade. And with high expectations comes pressure, which may explain why nearly half of young Americans (48%) surveyed say they have experienced a quarter-life crisis.
“In today’s socio-economic climate where years of stagnant wages1 meet ‘hustle culture,’2 it’s easy to understand why some young Americans feel they’re falling short of achieving their high financial ambitions,” said Chris Bohlsen, director of Investor Services at TD Ameritrade. “But as the concept of ‘adulting’ continues to evolve, so should young Americans’ thoughts and attitudes toward their financial expectations and milestones. Even though wage growth has started to improve and the job market is better than it has been in years,3 what may have been realistic for their parents or even older siblings still may not be now.”
Redefining adulthood
According to the survey results, young Americans believe that paying for streaming services is now one of the first markers of modern adulthood, more so than traditional milestones such as moving out of one’s parents’ house, getting a full-time job or even paying one’s own phone bill. And as this group redefines these traditional milestones, they’re doing so in a way that’s at odds with their peers’ actual behavior.
Age a person is expected to be able to do the following, on average:
Pay for their own streaming service: 19
Start a full-time job, pay their own phone bill and move out from their parent’s home: 20
File their own taxes: 21
Pay for their own health insurance, start saving for retirement and start investing in the stock market: 23
Despite ambitions to start saving early, only 28% of young millennials over 23 have started saving for retirement, according to the survey.
Get married and have a child: 25
27 is the average age American women actually have their first child4, while 30 (men) and 28 (women) are the actual average ages that they get married.5
Buy a home: 27
32 is the average age Americans actually buy their first home.6
The financial independence disconnect
Although high hopes and expectations abound when it comes to financial independence, there appears to be some flexibility among young adults when it comes to staying dependent on their parents.
On average, young Americans expect to be financially independent by age 22, although one in five young millennials expects to be reliant on their parents into their 30s.
Meanwhile, 91% of parents don’t expect their children to be financially independent until age 25.
On average, young millennials say it’s not embarrassing to receive parental financial support until age 30, while parents think it’s embarrassing if kids are still receiving financial support past the age of 27.
The saving struggle is real
One in five young millennials say they still can’t afford to save money.
Gen Zs are more optimistic, with the number of those who report they’ve started to save money increasing 6% from two years ago (62%, up from 56% in 2017).7
Savings are down in every category tracked in the survey, from money set aside for tech splurges to emergency funds to home down payments.
Meanwhile, the number of young Americans who say they are not currently saving money has increased 10% in the past two years.7
Parents are the go-to for financial guidance
The majority of young Americans admit to not having a budget or not following it. And across generations, young Americans are turning to their parents for help.
One in three Gen Zs say they don’t have a budget either because they are too young to have one (19%) or they don’t know how to budget yet (13%).
Two-thirds of Gen Zs (69%) and half of young millennials (52%) say they most often turn to their parents for financial advice, followed distantly by their friends.
Parents are also the go-to source for learning about basic financial concepts, but young Americans are seeking less input from them and other sources than they were just a couple of years ago.
Forty-seven percent of Gen Z and 43% of young millennials said they learned about basic financial concepts like budgeting and saving from their parents, compared to 60% of Gen Z and 53% of young millennials in 2017.7
“While it’s promising that support for teaching money management skills to high school students is gaining traction8, it’s never too early to start building financial literacy,” said Bohlsen. “Whether it be from their parents, free online resources or otherwise, young Americans should do what they can to better prepare themselves for the realities of money management and aim to set expectations that are in line with the current economic environment. Time is on their side to start investing and saving early.”
About TD Ameritrade Holding Corporation
TD Ameritrade provides investing services and education to more than 11 million client accounts totaling approximately $1.3 trillion in assets, and custodial services to more than 7,000 registered investment advisors. We are a leader in U.S. retail trading, executing an average of approximately 850,000 trades per day for our clients, more than a quarter of which come from mobile devices. We have a proud history of innovation, dating back to our start in 1975, and today our team of 10,000-strong is committed to carrying it forward. Together, we are leveraging the latest in cutting edge technologies and one-on-one client care to transform lives, and investing, for the better. Learn more by visiting TD Ameritrade’s newsroom at www.amtd.com, or read our stories at Fresh Accounts.
Brokerage services provided by TD Ameritrade, Inc., member FINRA (www.FINRA.org) / SIPC (www.SIPC.org)
Source: TD Ameritrade Holding Corporation
About The Harris Poll
The Harris Poll is one of the longest-running surveys in the U.S., tracking public opinion, motivations and social sentiment since 1963. It is now part of Harris Insights & Analytics, a global consulting and market research firm that strives to reveal the authentic values of modern society to inspire leaders to create a better tomorrow. We work with clients in three primary areas; building twenty-first-century corporate reputation, crafting brand strategy and performance tracking, and earning organic media through public relations research. Our mission is to provide insights and advisory to help leaders make the best decisions possible. TD Ameritrade is separate from and not affiliated with the Harris Poll, and is not responsible for their services or policies.
Survey Methodology
This survey was conducted online within the United States by The Harris Poll on behalf of TD Ameritrade from February 28 to March 14, 2019, among 3,054 U.S. adults and teens ages 15 and older. Key populations include: Gen Zs (n=1027, ages 15 to 21), young millennials (n=1026, ages 22 to 28) and parents (n=1001, ages 30 to 60). The parents had more than $25,000 in investable assets.
1 https://www.nytimes.com/2019/05/02/business/economy/wage-growth-economy.html
2 https://www.nytimes.com/2019/01/26/business/against-hustle-culture-rise-and-grind-tgim.html
3 https://www.cnbc.com/2019/04/18/new-college-grad-job-outlook-more-offers-higher-salaries.html
4 https://www.cdc.gov/nchs/fastats/births.htm
5 https://www.census.gov/data/tables/time-series/demo/families/marital.html
6 https://www.nar.realtor/research-and-statistics/quick-real-estate-statistics
7 https://s1.q4cdn.com/959385532/files/doc_downloads/Summer-Jobs-and-Internships.pdf
8 https://www.nytimes.com/2019/04/26/your-money/student-loan-debt-financial-literacy.html