Study Also Overturns Common Misperceptions About Gen Xers
Public Company Information:
SAN FRANCISCO--(BUSINESS WIRE)--Charles Schwab’s Gen X Money Mindsets Study, a segmentation study of more than 5,000 Americans aged 25-40 found that younger investors generally fall into six distinct categories based on their mindsets and attitudes toward money. The study also overturned some commonly held beliefs about Gen Xers and their attitudes toward finances, investing, and achieving the “American Dream.”
“One of Schwab’s primary goals is to better understand and serve Gen Xers, who are facing some real financial challenges,” said Jonathan Craig, vice president at Charles Schwab. “The generation is challenged by rising costs of healthcare and education, diminishing defined benefits through employers, and uncertainty around the future of Social Security. We wanted to dig deeper to uncover this group’s attitudes when it comes to money, and better understand how these attitudes guide their behaviors.”
Different Mindsets, Different Needs
The Schwab Gen X Money Mindsets Study identified six distinct Money Mindsets, each with its own lifestyle goals and financial attitudes:
Money Mindset One: Paycheck to Paychecks
By far the largest group representing 25 percent of Gen Xers, members of this predominately female group are extremely stressed about their personal and professional lives. They are less confident than any other group about having a bright future, and are twice as likely to be unsettled and pessimistic about their financial situations.
Money Mindset Two: Spend Now, Pay Laters
Seventeen percent of Gen Xers fall into this category of predominately city dwellers that tend to be optimistic, yet somewhat unrealistic about their futures. Overwhelmingly male (77 percent), this group is incurring significant debt, and believes that Social Security will be there for them when they retire.
Money Mindset Three: Confident and Risk-Tolerants
Representing 15 percent of the overall Gen X population, members of this group have high incomes, active lifestyles and high levels of engagement in their financial future. They are more likely to be married, and believe that by taking risks they can reach lofty financial and lifestyle goals.
Money Mindset Four: No Money, No Worries
This group represents 15 percent of the Gen X population. They are at the bottom of the earnings spectrum yet are very optimistic about life. They are more likely to be single, consider investing risky, and have the fewest number of credit cards. This group also has very little trust in financial firms or advisors.
Money Mindset Five: Cautious Savers
Approximately 14 percent of the Gen X population, this group tends to be financially conservative and concerned about money, highly educated and financially secure, yet is late to adopt new products. They are also more likely focused on home and family than they are on having active social lives.
Money Mindset Six: Overwhelmed but Optimistics
Predominately female, these Gen Xers have significant debt, adjustable rate mortgages, and high rates of financially-induced irritability or anxiety. Despite this, they manage to stay positive about their futures. This group represents 13 percent of the Gen X population.
Some Common Traits
In addition to the six mindsets, the Schwab Gen X Money Mindsets Study identified several key characteristics that are held by the majority of Gen Xers. The study reveals that many Gen Xers are not characterized by skeptical attitudes, and instead favor a more traditional outlook on life and financial aspirations.
About the Study
Few generations have been so thoroughly scrutinized and misunderstood as Generation X. The members of the MTV Generation have been consumers almost since birth, but their importance grows as they transition into investors, homeowners and parents. To provide fresh insights into this generation, Charles Schwab conducted The Gen X Money Mindsets Study – it incorporates more than 2,000 online and face-to-face interviews nationally and an additional 3,000 interviews in America’s largest cities. This effort produced six unique profiles of Gen X attitudes and mindsets toward life and money – and toward understanding how those mindsets guide the group’s financial behaviors.
A segmentation study creates profiles of a population by using statistical analysis to define groups of individuals around certain characteristics.
About Kelton Research
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About Charles Schwab
The Charles Schwab Corporation (Nasdaq:SCHW) is a leading provider of financial services, with more than 300 offices and 7.0 million client brokerage accounts, 1.2 million corporate retirement plan participants, 262,000 banking accounts, and $1.4 trillion in client assets. Through its operating subsidiaries, the company provides a full range of securities brokerage, banking, money management and financial advisory services to individual investors and independent investment advisors. Its broker-dealer subsidiary, Charles Schwab & Co., Inc. (member SIPC, http://www.sipc.org), and affiliates offer a complete range of investment services and products including an extensive selection of mutual funds; financial planning and investment advice; retirement plan and equity compensation plan services; referrals to independent fee-based investment advisors; and custodial, operational and trading support for independent, fee-based investment advisors through its Schwab Institutional division. The Charles Schwab Bank (member FDIC) provides banking and mortgage services and products. More information is available at www.schwab.com. (1107-8837)