Meet Generation Z. They are patient, collaborative and, contrary to
popular belief, do not necessarily prefer electronic communication to
personal connections, according to a new “Gen Z” survey
conducted by TD Ameritrade Holding Corporation (NYSE:AMTD).
Ranging from age 13 to 22, Gen Z may seem too young to be thinking about
their financial futures, but these up-and-coming investors are well
aware of the importance of money, and not surprisingly, among their top
financial concerns are affording college (39%) and having a large
student loan balance (39%).
Gen Z may have a good reason to have a few financial worries. This
generation has seen their parents struggle to pay back their own student
loans – 58 percent of Gen Z parents who were surveyed said they took out
their own student loans, and of these, 43 percent are still paying them
back. More than half (51%) of those parents who are still paying back
their own college loans also have a 529 College Savings Plan to support
their Gen Z child’s education.
When it comes to concerns about the economy, Gen Z and Parents said they
are worried about the same things: their #1 concern is jobs and
unemployment, mentioned spontaneously by 1 out of every 4 survey
“Increased tuition costs and a bleak job outlook may be a cause for
concern to some Gen Z teenagers, young adults and their parents, but
being proactive and coming up with a savings strategy early on can help
ease some of these financial anxieties,” said Carrie Braxdale, managing
director, investor services, TD Ameritrade, Inc., a broker dealer
subsidiary of TD Ameritrade Holding Corporation.
Gen Z has good intentions – 76 percent said saving money is important,
and 41 percent said they have a budget and follow it closely. And, when
asked what they would do with an extra $500, 55 percent of Gen Z
respondents spontaneously replied that they would save it, with another
11 percent saving it specifically for college.
However, Gen Z is also showing signs of developing early bad financial
habits. Among those Gen Z respondents who have a credit card, more than
half (56%) have carried a balance for six months or longer (only 23% pay
it off each month). Additionally, 23 percent of 19-to-22 year olds and
41 percent for 16-to-18 year olds claim they do not have either a
checking or savings account. These accounts can be important first tools
in learning basic money management skills.
Those members of Gen Z who had experience with more financial products
were found to be better budgeters, and on average those good budgeters
had $850 more socked away in savings than those who didn’t budget as
well ($950 vs. $100 saved). Furthermore, one of the most common
denominators for good budgeters was having had extensive discussions
with their parents about saving money (67%) compared to those that
aren’t good budgeters (34%).
“We found that parents are still the most influential variable when it
comes to educating children on basic financial skills,” Braxdale
continued. “Parents who work with their children early to develop a
financial plan and clearly set financial expectations can help better
prepare them for financial success later in life.”
Parents and kids together can visit www.tdameritrade.com
to access tools like WealthRuler™
to help them review their plan for their future retirement or College
Planner, a calculator that can help them examine if they are on
track for saving for college.
2,001 U.S residents participated in an
online survey from April 27-May 1, 2012.. The 2,001 survey respondents
sample was drawn from major regions in proportion to the U.S. Census –
New England (5%); Mid-Atlantic (16%), South (25%), Midwest (22%),
Southwest (12%) and West (20%). In each region, approximately half of
the respondents were male and half were female. The two primary groups
included were: Gen Z = 1,001 (born 1990 to 1999) and Parents of Gen Z =
1,000 (has a child in their household aged 13 to 22). The statistical
margin of error in this survey is ±3.1%. This means that in 19 cases out
of 20, overall survey results for primary groups in the study (i.e.,
Parents of Gen Z vs. Gen Z) will differ by no more than 3.1% in either
direction from what would have been obtained by measuring the opinions
of all target group members born in the U.S. Head Research conducted
this survey on behalf of TD Ameritrade Holding Corporation.
About TD Ameritrade Holding Corporation
investors and independent registered investment advisors (RIAs) have
turned to TD Ameritrade's (NYSE:AMTD) technology,
to help make investing and trading easier to understand and do. Online
or over the phone. In a branch or with an independent RIA. First-timer
or sophisticated trader. Our clients want to take control, and we help
them decide how - bringing Wall Street to Main Street for more than 36
years. An official
sponsor of the 2012 U.S. Olympic Team, TD Ameritrade has time and
again been recognized
as a leader in investment services. Please visit TD Ameritrade's newsroom
for more information.
Brokerage services provided by TD Ameritrade, Inc., member FINRA (www.FINRA.org)/SIPC
About Head Research
Research is a division of Head Solutions Group (U.S.) Inc., a
leading market research partner for Financial Services companies in
North America. With offices in New York, Toronto, and Montreal, Head
delivers the deep customer insights that increase institutional
knowledge and propel business action.
Head Research and TD Ameritrade Holding Corporation are separate,
unaffiliated companies and are not responsible for each other’s products