Young Adults in Metro Detroit have a different notion of adulthood and finances than previous generations, and they’re also worried about the economy.
In a report released by Bank of America and USA Today Better Money Habits, 18- to 26-year-olds in Metro Detroit as part of a national study had a lot to share.
Although three-quarters (73 percent) of young adults in metro Detroit feel somewhat or very optimistic about their financial prospects, they perceive the economy here (60 percent) and job market (41 percent) as poor.
Additionally, a majority (71 percent) report being worried about finding a career path that will support the lifestyle they’ve envisioned for themselves – 12 percentage points higher than the national average.
Health care costs are more important to Metro Detroit young adults than the national average – 20% list it as their top financial concern, where that number is 12% nationally.
So what is adulthood, in the eyes of 18-24 year olds?
Having achieved a financial milestone such as buying a car (34 percent of respondents said this). After that, moving out on your own (14 percent), getting married or starting a family (eight percent), or graduating from high school (seven percent).
Of the young adults who feel like adults, 62 percent say it’s because their parents helped prepare them. For those who don’t feel like adults, almost half say it’s because they still rely on their parents. That reflects a wider trend in the younger generation.
Only 30 percent of young adults do their own taxes, and just over half – 51 percent – pay their own cell phone bills. However, all of that extra money isn’t necessarily going to waste. 63 percent of young adults in Metro Detroit are saving their money, and 27 percent are contributing to a 401(k).
Another interesting statistic for the Metro Detroit area involves home ownership. Almost one in five young adults in Metro Detroit own a home. That figure is 11 percentage points higher than the national average.
“The fact that so many young adults are in a place where they can buy homes is impressive, and it’s great to see that so many are saving,” said Carol Guyton, market sales manager, Bank of America. “This shows a degree of financial responsibility that not all young people possess. At the same time, it is important that they strike the right balances between managing short-term costs while investing in the future.”
There’s a gap in resources when it comes to finances for the young. Only 40 percent of the survey respondents said their high school education did a good job teaching them strong financial habits. Of the topics they wish they’d learned about in high school,
- 46 percent wish they had learned how to do taxes
- 41 percent wish they had learned how to invest
- 35 percent wish they had learned how to manage student loans.
This lack of knowledge led Bank of America to partner with Khan Academy to create Better Money Habits, a free educational resource aimed at empowering people to be more confident in their financial decision making. The site offers information on topics like retirement, taxes, and buying a home.
When it comes to the upcoming election, young voters prioritize pocketbook issues. The majority (65 percent) said that the economic issues are more important to them than social issues (34 percent) in how they vote. However, if they’re forced to choose between two candidates, one who is best for their personal finances and one who is best for the country, the majority (83 percent) would prioritize what’s best for the country.