Young adults lack basic money know-how for long-term financial success.

Financial Literacy


New research from Charles Schwab indicates that while 81% of young adults ages 16 to 25 witnessed their parents experience financial hardship, 76% 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.

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.

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Young Adults

Young adults have high financial optimism despite experiential and tangible barriers. Seventy-six percent believe they will have a better financial future than their parents.

high optimism
Carrie quote


"We're seeing a lot of optimism despite the financial hardships these young adults experience. We have an opportunity to harness that optimism by setting them on a course toward lifelong financial success."

Carrie Schwab-Pomerantz, president, Charles Schwab Foundation

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%) believe their parents will leave them an inheritance, versus the average 21% of people who actually received an inheritance of any kind between 1989 and 2007.

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 to 25) have saved just 15% more than Gen Z (ages 16 to 20)—yet they have 169% more debt. Another one-third (33%) of respondents say they skipped a meal because they didn't have enough money.

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% believe student loans are good debt.
  • Respondents are similarly split on whether car loans are good or bad debt.
  • In addition, while 81% say they want to own a home, only 54% believe that a mortgage is considered good debt.
  • Most concerning, 51% say they currently have some sort of debt, but only 3% 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."

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

Most young adults (69%) say their parents are good financial role models and their most trusted source for financial advice (39%) 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%) and drugs (56%).

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%), how to keep financial information secure (68%), how to save enough to be set in retirement (65%), how to manage a budget for necessities (65%) and learn the difference between good and bad debt (55%).

Young adults have many financial goals, including being financially independent.

Financial goals


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 in this presentation and on Schwab MoneyWise

Seeking help on the basics of personal finance? Here are some resources to get you started.

Learn more


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 ages 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.

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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