80% of 20-somethings expect to do at least as well financially as their parents — Click to Tweet
The State of 20-somethings’ Finances in the United States
In January 2014, Money Under 30 surveyed 300 random Americans between the ages of 21 and 29 about their money. We also got responses from 1,500 of Money Under 30′s email subscribers.
Here are the results.
Growing student loan debts, a competitive job market and stagnant wages are still making it difficult for 20-somethings to get ahead. Even though one in five 20-somethings live with their parents and only 60 percent are able to save at least 5 percent of their monthly income, 76 percent believe their financial situations will improve in the next five years and 80 percent except to achieve the same or a greater financial success than their parents.
Respondents said their most important financial goals were repaying debt (26 percent), finding a job in their field (23 percent) and increasing their income (18 percent).
43% of 20-somethings earn less than $25,000 — Click to Tweet
A lot of life happens between 19 and 30. We grow up and (hopefully) move out. Maybe we go to school. Then we (again, hopefully) get a job…or two or three or ten.
But years later, few 29- or 30-year olds are in exactly the same place. Some have been working (and saving) for eight years. Others are just getting out of medical school. Some are getting married and starting a family. Others have school-age kids and are working two jobs while trying to finish a bachelor’s degree.
Even so, a majority of 20-somethings don’t earn a whole lot. Over 42 percent earned less than $25,000 and only 3 percent earned more than $100,000.
Not surprisingly, Money Under 30 readers earn more than the general population. We can speculate that people who go out of their way to read financial advice may already have more money to invest or are actively working at increasing their income. Of course, we also think our advice is helping them get there!
Nearly half (46 percent) of 20-somethings have student loans with an average balance of $29,337. Slightly fewer have credit card debt (42 percent) or auto loans (30 percent).
Unfortunately, when it comes to debt, Money Under 30 readers aren’t doing any better than the general population, with average debt loads matching almost dollar-for-dollar.
Saving and Investing
Only half (49 percent) of 20-somethings contributed to a 401(k) or IRA in the last year.
Although it’s easy to say that young adults don’t understand the importance of saving for retirement (or figure they are young enough to put it off a few more years), 20-somethings’ low rate of retirement savings may have more to do with income than education…among 20-somethings earning $100K or more, 95 percent contributed to a retirement plan.
Many 20-somethings are not just failing to save for retirement; they’re failing to save at all. Two-thirds of 20-somethings save less than 10 percent of their income, and 20 percent aren’t saving anything at all.
Only 49% of 20-somethings contributed to a 401k or IRA last year — Click to Tweet
Only 38 percent of 20-somethings are working full-time in their field of study or career of choice. About 18 percent work more than one job and 6.8 percent are unemployed.
In the last year, 20 percent of 20-somethings reported earning money through self-employment or by starting a business.
Here’s a look at the various salaries adults under 30 are earning today.
Our first decade as adults remains an exciting time, but one fraught with increasing student loan debts, a competitive job market, and measly starting pay.
Although educational achievement remains a critical indicator of income – both in your 20s and for your lifetime – the price tag for that degree keeps going up. Many college-educated 20-somethings are earning more than those without a degree, but they may not be able to save any more because of big student loan payments.
What do you think? Does anything in this survey surprise you? What do you think today’s 20-somethings can do to more quickly improve their financial situation? Share your opinion in the comments.
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