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Young adults goals disconnected from finances
MADISON, Wis., and NEW YORK (11/21/08)--Young adults are finding financial security elusive, with 91% of those surveyed reporting they have financial goals while only 53% report sticking to a monthly budget. While 62% say they have thought about their own retirement, nearly as many (61%) say their retirement savings is behind schedule. In fact, 42% of young adults surveyed give themselves a D or F on how well they are saving. The reports are from a study by the American Savings Education Council and AARP in which Gen Xers (ages 28 to 39) and Gen Yers (age 19 to 27) define "financial security." The findings present an opportunity for credit unions to assist these groups, according to Jon Haller, director of market research at the Credit Union National Association (CUNA). "Young adults and kids have big plans for life, with big goals, but they haven't done anything to connect to their goals," Haller told News Now. "There's a disconnect, that feeling of 'I'm OK' when they're actually not." In the survey, when asked to define "financial security":
* 22% of respondents defined it as being able to make ends meet and not living paycheck to paycheck; * 19% said it means having enough money leftover to save for emergencies or a rainy day; * 16%, being able to simply live comfortably; * 15%, not having to worry about their finances; and * 13%, being able to weather hard times and deal with the unexpected. * 9%, being able to save for retirement, afford retirement, or maintain one's lifestyle in retirement; * 6%, being able to provide for ones' family with financial security; and * 5%, having leisure, entertainment or fun.
"From an educational standpoint, they know they should be saving early and budgeting, but they're not getting there," said Haller. Credit unions can help provide the financial education, financial literacy and information about retirement planning, he added. "As far as marketing to young adults, you have to convince them of the value of saving and budgeting. Financial security is the message that resonates with them," Haller said. "Start now to educate them early. Make that concern about security an opportunity to educate them. Today's kids are skeptical about whether Social Security and Medicare will be there when they need it. This makes it even more important for them to save for their future." Other findings include:
* Gen Yers (64%) are more confident in being able to accumulate enough for a comfortable retirement than members of the older Gen X (54%). * Young Americans are more likely to say they know more about their iPod (40% very knowledgeable) than about how to file their taxes (26%), buy a home (21%) invest outside of the workplace (15%); and save for retirement (15%).
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