How to fund a college education and pay off student loans are the chief concerns of four in ten young people today, new research reveals.
TD Ameritrade Holding Corporation, (NYSE:AMTD), Omaha, Neb., published this finding in a summary of results from an online survey of 2,001 U.S residents. The respondents included 1,001 youths born between 1990 and 1999; and 1,000 of their parents.
The top concern of young people ages 13 to 22, which the study labels “Generation Z”, are affording college (39%) and having a large student loan balance (39%).
Nearly 6 in in 10 (58%) of Gen Z parents who were surveyed say they took out their own student loans. And of these, 43% are still paying the loans back.
More than half (51%) of Gen Z parents who are still paying back college loans also have a 529 college savings plan to support their child’s education. One in four of Gen Z youths and their parents, the survey says, share a concern about jobs and unemployment.
Three in four (76%) of Gen Z youths say that saving money is important. And four in 10 (41%) say they have a budget and follow it closely.
When asked what they would do with an extra $500, 55% of Gen Z respondents say they would save the month; 11% say would save the money for college.
The survey observes, however, that Gen Z is “showing signs of developing early bad financial habits.”
Among Gen Z respondents who have a credit card, more than half (56%) have carried a balance for six months or longer (only 23% pay off the balance each month). Additionally, 23% of 19-to-22 year olds and 41% of 16-to-18 year olds claim they do not have either a checking or savings account.
Gen Z respondents who had experience with more financial products were found to be better budgeters. And on average those good budgeters had $850 more in savings than those who didn’t budget as well ($950 vs. $100 saved).
Additionally, the survey found, good budgeters have “extensive discussions” with their parents about saving money (67%) compared to those who aren’t good budgeters (34%).