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Despite Good Intentions, Millennials and Gen Z Are Demonstrating Unrealistic Expectations About Their Financial Futures


While teens and young adults are confident about the future, they lack basic money know-how critical to long-term financial success, according to new research from Charles Schwab

SAN FRANCISCO--(BUSINESS WIRE)--A decade after the onset of the financial crisis, American young adults are optimistic about their future financial success but demonstrate behaviors that suggest they may be unprepared for the realities of achieving it. New research from Charles Schwab indicates that while 81 percent of young adults age 16 to 25 witnessed their parents experience financial hardship, 76 percent believe they will have a better financial future than their parents. Unfortunately, they simultaneously face real personal financial challenges—having incurred average savings of just $1,628 and debt of $8,003—and seem to have a genuine lack of understanding about debt in general.

“Kids of the Great Recession are now on the cusp of financial independence and making decisions that will have a lasting impact on their long-term ability to build wealth. The good news is we’re seeing a lot of optimism, and we have an opportunity to harness that optimism by setting them on a course toward lifelong financial success,” said Carrie Schwab-Pomerantz, President, Charles Schwab Foundation, and Senior Vice President, Charles Schwab & Co., Inc. “A key takeaway is that young adults want to learn more about money management, and they’re looking to their parents to teach them these critical skills.”

Optimism may be misplaced and bad money habits persist

Over the past decade, there’s been a tremendous shift in attitudes about the financial future. While young people were “very concerned” about their personal financial futures in 2009, the new 2018 research indicates young people are much more confident about their financial futures:

  • On average, young adults expect to retire at 60 years of age, seven years earlier than full Social Security benefit eligibility for their age bracket.
  • More than half (53 percent) believe their parents will leave them an inheritance, versus the average 21 percent of people who actually received an inheritance of any kind between 1989 and 20071.

But their optimism may be leading to bad money habits. Young adults are accruing significantly more debt, but their savings don’t meaningfully increase: on average, Young Millennials (ages 21-25) have saved just 15 percent more than Gen Z (ages 16-20)—yet they have 169 percent more debt. Another one-third (33 percent) of respondents say they skipped a meal because they didn’t have enough money.

Young people trust their parents for financial advice, want to learn more

Most young adults (69 percent) say their parents are good financial role models and their most trusted source for financial advice (39 percent) compared to a bank, online resources and friends. And unlike previous generations, most young adults today say their parents are more likely to talk to them about money than sex (67 percent) and drugs (56 percent).

Young people also indicate strong interest in learning how to manage their money, including how to make enough money to reach their financial goals (71 percent), how to keep financial information secure (68 percent), how to save enough to be set in retirement (65 percent), how to manage a budget for necessities (65 percent) and learn the difference between good and bad debt (55 percent).

Troubling lack of knowledge about debt

At a critical point in their financial lives, there is plenty of confusion about debt. Many young Americans do not understand the fundamentals of debt—in particular the difference between good and bad debt:

  • Only 38 percent believe student loans are good debt.
  • Respondents are similarly split on whether car loans are good or bad debt.
  • In addition, while 81 percent say they want to own a home, only 54 percent believe that a mortgage is considered good debt.
  • Most concerning, 51 percent say they currently have some sort of debt, but only 3 percent would pay down that debt if given an extra $1,000.

“We live in an increasingly complex financial world, where our personal responsibility for financial management has increased dramatically, but our basic understanding of our finances has lagged behind,” Schwab-Pomerantz said. “We need to commit to educating our youth about money management, so they have the opportunities to achieve the financial freedom they want and deserve.”

Schwab provides a range of resources and learning programs to help parents, guardians and young people make smart financial decisions and achieve long-term financial success, including Schwab MoneyWise ®, a comprehensive and unbiased source of financial education, guidance and interactive tools.

More information on the survey results can be found at

1 U.S. Bureau of Labor Statistics, “Inheritance and the Distribution of Wealth or Whatever Happened to the Great Inheritance Boom,” 2011,

About the Financial Literacy Survey

The online survey was conducted by Logica Research (formerly known as Koski Research) from June 12 to June 20, 2018, among 2,000 Americans aged 16 to 25. Quotas were set so that the sample is as demographically representative as possible. The margin of error for the total survey sample is three percentage points.

About Charles Schwab

At Charles Schwab, we believe in the power of investing to help individuals create a better tomorrow. We have a history of challenging the status quo in our industry, innovating in ways that benefit investors and the advisors and employers who serve them, and championing our clients’ goals with passion and integrity. More information is available at Follow us on TwitterFacebookYouTube and LinkedIn.


Through its operating subsidiaries, The Charles Schwab Corporation (NYSE: SCHW) 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,, 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; compliance and trade monitoring solutions; referrals to independent fee-based investment advisors; and custodial, operational and trading support for independent, fee-based investment advisors through Schwab Advisor Services. Its banking subsidiary, Charles Schwab Bank (member FDIC and an Equal Housing Lender), provides banking and lending services and products. Logica Research is not affiliated with the Charles Schwab Corporation or its affiliates. More information is available at and

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Charles Schwab
Stephanie Corns, 415-539-0700

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