I hope this isn't true. About half of Americans age 18 to 34 have no savings, study finds
By Diane C. Lade
They may be among the most tech-savvy group ever to enter the work force. But Generation Y adults have the weakest financial literacy skills among any age group, a new study found.
And almost half of Americans between the ages of 18 and 34 have no savings.
The survey released by the National Foundation for Credit Counseling, which polled 1,000 adults nationwide in March, found 47 percent of Gen Y adults gave themselves Cs, Ds or Fs in personal finance skills such as budgeting and effective savings. They also were the ones mostly likely, among working age adults, to be putting no money toward retirement.
Experts fear that will leave them ill prepared when the first of Gen Y turns 62 in 2039, the year that some actuarial models have estimated the Social Security trust fund will be exhausted unless changes are made.
"When you're young and just starting out, you have so many needs and wants that finding that extra money is particularly hard, especially since retirement seems so far off," said Gail Cunningham, public relations vice president at the foundation, a nonprofit promoting financial literacy.
Here's what financial advisors say young adults can do:
Save something on a regular basis, even if only small amounts.
If your company has a retirement savings plan, participate. If not, start your own individual retirement account.
Prioritize your payments, paying off high interest credit card and car loan debt first.
Build good credit by paying your bills on time.
Albert Williams, a professor of finance and economics at Nova Southeastern University in Davie, thinks the current recession may end up benefiting Generation Y. He finds his graduate business students are much more cautious about money these days, well aware they have huge school loans to pay off.
"This has been a huge eye opener for them and has caused them to rethink how they want to live their lives," Williams said. "Some economists say they will go back to their old ways once the recession eases, but I want to give them the benefit of the doubt."