TD Ameritrade’s 3rd annual survey finds Generation Z open to
investing but lacking financial literacy amid growing credit card debt
and waning Social Security
OMAHA, Neb.--(BUSINESS WIRE)--
Facing worries of unemployment, diminishing Social Security benefits and
student loan debt of $29,000, those in Generation Z (ages 15-24)
understand the importance of saving. TD
Ameritrade’s 3rd Annual Generation Z survey takes a
closer look at what this generation is doing right and where there is
room for improvement. The survey also polled Generation Y (ages 25-37)
this year, to see how these two generations differ.
Biggest Financial Worries: Unemployment, Student Loans and Social
When asked, in an open-ended question, their biggest concern with
today’s economy, members of Gen Z were most likely to say
jobs/unemployment. This was their biggest
worry in 2013 as well. However, it appears to have diminished, down
to 25 percent from 34 percent, mirroring, perhaps, the improvement in employment
rate for the class of 2014.
Kaci F., a Gen Z intern for TD Ameritrade, shares this sentiment, “It’s
very difficult to find a job right now, but I think the economy has been
getting better. I think we have a better chance now than a couple years
ago finding employment.”
One shift that Kaci and others in her generation are experiencing is
securing post-college internships rather than full-time jobs. “I think
that will become the new norm,” says Kaci.
Brenna L., a fellow intern at TD Ameritrade agrees. “Employment right
now so heavily relies on experience,” she says, “and for our generation
getting that experience and getting our foot in the door is the hardest,
so people like us are interning in our 20s because we need that
Jobs may be today’s worry, but members of Gen Z have some future
concerns on their minds as well. An increased number of those in Gen Z –
from 39 percent in 2013 to 44 percent this year – fear that Social
Security and other similar government retirement programs will be
depleted by the time they retire. And, as the average student loan debt
has continued to climb, it’s no surprise that nearly half (44%) of those
in Gen Z say they worry about having a large student loan balance when
Gen Z vs. Gen Y: Is College Worth It?
Despite fears of accruing too much student loan debt, the majority of
those in Gen Z (72%) have attended, are currently in or plan to attend
college. Additionally, 53 percent say they plan to pursue an advanced
degree. That’s likely because they increasingly believe that a college
education is key to their success (60% feel it’s very important, up from
54% in 2013). The older members of Gen Y are less likely to see college
as very important (47%). However, among those in Gen Y who went to
college, 51 percent still feel their college education was worth every
A few, like Demarcus J., a recent Gen Z graduate and former TD
Ameritrade intern, feel that there is value in gaining an advanced
degree. “The bachelor’s today is like getting a high school degree,” he
says. “You have to have it in order to be competitive in the job market.
I think that having a master’s gives you a more competitive edge.”
As the average cost of a four-year degree continues
to rise, most (65%) high school-aged Gen Zers expect to pay tuition
with assistance from scholarships and grants. The reality, however, may
be a bit different: Only 54 percent of post-college Gen Zers and 50
percent of those in Gen Y actually benefited from scholarships and
Gen Z: First Jobs, Money Lessons and Saving for the Future
Parents: Your kids are listening. Members of Gen Z (51%) report that
their parents are the number one resource for learning about finances.
According to the survey, 84 percent of those in Gen Z say their parents
discussed the importance of saving, on average, by age 14.
However these financial lessons are being taught, it appears that good
financial habits are being formed. A few highlights of Gen Z’s fiscal
responsibility from the survey include:
Those in Gen Z increasingly feel that saving is very important (57%)
at this point in their lives, up from 50 percent in 2013.
If handed $500, nine of 10 Gen Zers say they would save at least some
And their budgeting skills are improving with age, as 36 percent say
they have a budget and follow it (up from 27% in 2013).
“Talking to your child about money can be a difficult discussion,” said
, managing director at TD Ameritrade. “However, we’ve seen
from our previous
research that children who had parents who spoke to them at an early
age about fiscal responsibility are more likely to better understand the
importance of saving and have good budgeting habits. It’s never too
early to start having discussions with your children about money.”
Teaching Opportunities: Managing Credit Card Debt, Saving for
Retirement and Investing
While members of Gen Z appear to be taking some good steps toward their
financial futures, there are some areas in which they could use a little
For one, it appears credit card debt increases with age. The average
College-age Gen Z: $559
Post-College-age Gen Z: $975
Gen Y: $1,946
Furthermore, fewer members of Gen Z surveyed in 2014 (43%) say they pay
off their credit card bills monthly compared to 2013 (59%).
Life after College: Moving Back in with Mom & Dad?
So what does the future hold for Gen Z? Nearly half (49%) of those
surveyed say they have moved out or plan to be out of the house by age
20, while only 40 percent of those in Gen Y say that they moved out by
Like last year, those in Gen Z say the age they’d be embarrassed to
still be living at home with their parents is 28. But, Gen Y wouldn’t
feel so until age 31, on average. And what’s more, 17 percent of Gen Y
survey respondents say they wouldn’t be embarrassed until age 40 or even
Whenever they leave the nest, Gen Z wants to find a job that inspires
them with the vast majority (74%) saying that feeling inspired by their
work is more important or equal to the salary they earn. They are also
looking for a job that allows them to make a positive contribution to
society (59%). Thirty-six percent of those in Gen Z would prefer to be
self-employed/entrepreneur, rather than traditionally employed.
Investing for the Future
Whatever the future holds, most Gen Zers say they plan to start a job,
buy a car, pay off student debt, get married, buy a home, THEN begin
saving for retirement – in that order. On average, Gen Z believe the
right age to start saving for retirement is 27.
“I don’t think my generation really thinks about savings like we
should,” says Caitlin N., an intern for TD Ameritrade. According to the
survey, only one in five Generation Z respondents say they are currently
saving for retirement.
And, how does Gen Z plan to go about saving for retirement? Just 17
percent believe that the best way to plan for retirement is to invest in
the stock market. While that’s up from 11 percent a year ago, many more
(47%) believe that a savings account is the best way to prepare for
"While it’s promising to see that Gen Z is starting off with a good
understanding of the importance of investing and saving, there is a
tremendous opportunity to help educate them on all of the available
options,” says Sherrod. “Teaching those lessons before they leave the
nest can have an impact on how they pursue their long-term financial
goals. However, it’s just as important that young people have access to
financial resources to help them put these lessons into practice when
they leave home and enter the lecture halls.”
The survey found that only 10 percent of those in Gen Z report learning
financial lessons from a teacher or course at school. Many Gen Z
respondents (42%) report they have not taken a class about investing,
largely because there were no classes available (40%).
“Educators need the tools and support to instill these financial lessons
and that was one of the reasons why we created TD
Ameritrade U,” adds Sherrod. “Our program offers professors an
interactive curriculum that can help cultivate a passion for investing
in their students. Through TD Ameritrade U, students can conduct
research, place paper trades and manage positions, using our
award-winning thinkorswim desktop and mobile trading platforms to bridge
the gap between the classroom and real world.”
Regardless of age – teens, 20s or 30s – it’s never too early to start
learning how to invest and save for the future.
Video interviews and full survey findings can be found at http://www.amtd.com/newsroom/research-and-story-ideas/research-and-story-ideas-details/2014/Generation-Z-and-Money-Survey
More information about TD Ameritrade U, visit www.tdameritradeu.com.
For the latest news and information about TD Ameritrade, follow the
Company on Twitter, @TDAmeritradePR.
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Source: TD Ameritrade Holding Corporation
About Head Research
Head 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. TD
Ameritrade and Head Research are separate and unaffiliated firms and are
not responsible for each other’s services or policies.
About the 2013 Gen Z Survey Methodology
An online survey was
conducted among N=1,000 Americans aged 14 to 23 from April 25 to May 6,
2013, by Head Research on behalf of TD Ameritrade, Inc. Sample was drawn
from major regions in proportion to the U.S census. The statistical
margin of error for overall survey results in this study is +/- 3%
(assumes panelists do not differ from non-panelists, and respondents do
not differ from non-respondents). This means that, in 19 out of 20
cases, survey results for questions based on all survey respondents
(N=1,000) will differ by no more than 3% in either direction from what
would have been obtained by measuring the opinions of all Americans aged
14 to 23.
About the 2014 Gen Z Survey Methodology
An online survey was
conducted among N=1,000 U.S. residents born between 1990 and 1999 (Gen
Z) and N=500 U.S. residents born between 1977 and 1989 (Gen Y) from
April 30 to May 12, 2014, by Head Research on behalf of TD Ameritrade,
Inc. Sample was drawn from major regions in proportion to the U.S.
census. The statistical margin of error for the total Gen Z sample is
+/- 3.1% (assumes responders are the same as non-responders and that
panelists are the same as non-panelists). This means that, in 19 out of
20 cases, survey results will differ by no more than 3.1 percentage
points in either direction from what would have been obtained by
measuring the opinions of all target group members.
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Source: TD Ameritrade Holding Corporation