Good news on the youth front:
Despite all the signs that young adults are becoming ever more dependent on their parents, they may be O.K. when it comes to saving, according to a study to be published early next year in The Journal of Consumer Affairs.
The study found that while those under 30 generally saved less than older adults in real dollars, when adjusted for factors like income levels, more young adults than older adults said they spent less than their income. The researchers found that about 61 percent of 25-year-olds and 58 percent of 35-year-olds said they would be spending less than their income, compared with about 56 percent of 45 and 55-year-olds who said the same. Spending less than one’s income was assumed by the researchers to mean saving.
Similarly, according to a Fidelity Investments study released earlier this month, more than 70 percent of employed adults aged 22 to 33 have set the goal of daily money management and budgeting as their biggest focus. More than 18 percent said saving for retirement was their “most crucial goal,” up from 13 percent in 2008.
A few thoughts:
- I wonder if the younger generation’s dependency upon their parents is directly related to their saving. Maybe they are only saving money because they are living with mom & dad. I would like to see the younger generation saving independently of familial assistance.
- Certainly the Fidelity study is hopeful. If 70% of young adults are budgeting, they are well on their way to success. If you don’t budget, you can’t do anything else…well.
- Maybe this is yet another upside to the great recession.