Financial Well-Being Eludes Young Adults

    More than two decades ago, financial planner and author Venita Van Caspel wrote: “Our educational system continues to send forth our young with so little information about financial matters that they are like time bombs about to destroy their own and their families’ economic futures. We equip them to earn good incomes and to live the good life, but we fail miserably as a nation to prepare them to know what to do with the money they earn.”

    Unfortunately, the implications of Van Caspel’s sobering forecast are becoming more apparent each day. With the level of consumer debt skyrocketing and the cost of housing, education, and health care increasing at double digit rates, young adults in the U.S. and other industrialized societies are facing unprecedented challenges to achieving financial security.
 
    Recently Elisabeth Donati, the founder and director of Creative Wealth International, reported that only 10 percent of high school graduates have taken any course in managing money or building financial security. She also pointed out that more students are dropping out of college because of money problems than academic problems; and, those under 25 are the fastest growing group filing for bankruptcy. In light of the economic challenges facing young adults, the American Savings and Education Council and AARP conducted a study to examine the financial behaviors, attitudes, and concerns of individuals between the ages of 19 and 39. The following are some of the key findings:

1. Only 9 percent are “highly satisfied” with their current financial situations and 7 percent report feeling “very secure”
2. 59 percent agreed that they struggle to make ends meet
3. 35 percent believe their level of debt is a major problem
4. Approximately one-half of those surveyed believe that it is harder for them than former generations to: a) support a family, b) save for the long-term, c) buy a first home, and d) save for a child’s college education
5. 37 percent expect to provide financial support to their parents during their retirement
6. 36 percent cite their parents or in-laws as their primary source of financial advice while only 20 percent cite a financial advisor

    Clearly, helping the young adults in our lives to deal with economic challenges and to adopt good financial habits and attitudes is more important than ever. The first and most important step is to examine our own money beliefs and behaviors and take action to get our own financial lives in order. Nothing is more effective in guiding the younger generation than providing a powerful role model. Next, stay alert for teachable moments to share your financial wisdom.
 
    Very few topics affect us on a day-to-day basis like money, so there are endless opportunities to provide financial lessons via word and example. In addition, elicit the help and support of your trusted financial advisors. Many are eager to use their expertise to guide younger generations.

    It is also important to seek resources that are tailored to the unique needs and perspectives of young adults. Examples include Get a Financial Life: Personal Finance in Your Twenties and Thirties by Beth Kobliner, Your Financial Future: a Guide to Life after Graduation by Terry Arndt, and Debt Free by 30: Practical Advice for the Young, Broke, & Upwardly Mobile by Jason Anthony and Karl Cluck.

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