Young Adults in Seattle-Tacoma Area Are Better Savers, More Financially Independent Than Their Peers Nationwide
Bank of America/USA TODAY Better Money Habits Report Shows Most Expect Election to Impact Their Pocketbooks
A newly released Bank of America/USA TODAY Better Money Habits® Report finds that 18- to 26-year-olds in Seattle-Tacoma are notably self-sufficient when it comes to their finances. In fact, they are taking on more financial responsibilities than their peers around the country, and more are saving for retirement than in any of the 11 markets surveyed.
For this group of Puget Sound area residents, which includes the youngest millennials as well as the oldest members of Generation Z, 34 percent are contributing to a 401(k) – while only 20 percent nationally are doing so. Asked if they are saving in general, 68 percent said they are – a figure that is 10 percentage points higher than the national average. Additionally:
Forty-three percent no longer live at home with their parents vs. 32 percent nationally.
Fifty-four percent pay their own cell phone bills vs. 44 percent nationally.
- Forty-three percent do their own taxes vs. 32 percent nationally.
“It’s encouraging to see young adults here in the Seattle area taking on short-term financial responsibilities at a higher rate than the rest of the country, and that they’re saving on top of that,” said Gerrod Parchmon, Washington financial center sales regional executive, Bank of America. “Still, the road ahead won’t be easy. With an uncertain job market and the burdens of student debt, young adults need continued financial guidance and relevant tools that give them pointers at the right moments in their lives.”
The need for additional support and resources is what inspired 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 delivers easy-to-understand information on a wide range of personal finance topics, including retirement, taxes, and buying a home.
A new definition of adulthood: less about age, more about financial independence
While 18- to 26-year-olds in the Seattle-Tacoma area exhibit relatively strong financial habits, many still lean on others for support, and for that reason, they’re not feeling like adults. When asked to define adulthood, “financial independence” was the top response. Additionally, 55 percent define adulthood as having achieved a financial milestone such buying a house or car, compared to having achieved traditional life milestones, such as graduating from high school/college (6 percent) or getting married/starting a family (3 percent).
For those who feel like adults, most say it’s because they have a job (59 percent), are living on their own (55 percent) or taught themselves what they needed to know/sought out resources on their own (52 percent). For those who do not feel like adults, 69 percent say it is because they still rely on their parents.
Nearly all wish they learned more about personal finance in school
While striving for financial independence, the majority of young adults in Seattle-Tacoma say they did not learn enough about practical money matters in school. Though their education has set them up for success in other ways, young Seattle-Tacoma area residents are not necessarily feeling “life ready” upon graduating. Only 39 percent said their high school education did a good job teaching them strong financial habits.
When asked what they wish they had learned more about in school, nearly all said topics related to personal finance, more so than any other life-readiness skill:
Forty-six percent wish they had learned how to invest.
Forty-three percent wish they had learned how to do taxes.
- Twenty-seven percent wish they had learned how to buy a home and how to negotiate a salary.
A lack of practical knowledge has left many feeling less than prepared for the road ahead. Of those who attended or are attending college, 47 percent had doubts about whether it prepared or is preparing them for the “real world.”
Most expect the presidential election to impact their pocketbooks
With the campaigns in the home stretch, the report also surveyed young, first- and second-time voters in Seattle-Tacoma and around the country. Contrary to popular belief, young voters are prioritizing their pocketbook over social issues at the polls. Fifty-three percent say that economic issues are more important to them than social issues (47 percent) in how they vote.
Seventy-two percent of Seattle-Tacoma first- and second-time voters expect the upcoming presidential election to affect their personal financial futures and are heading to the polls with financial matters in mind. Among those with student debt, 45 percent say it will impact the way they vote.
While concerned about their pocketbooks, if forced to choose between two candidates – one who is best for their personal finances and one who is best for the country – 79 percent would prioritize what’s best for the country.
About the Bank of America/USA TODAY Better Money Habits Report
Bank of America and USA TODAY commissioned a survey of 2,180 18- to 26-year-olds to explore their views on personal financial matters. The survey was conducted online, in both English and Spanish, during the period of July 1–July 21, 2016. Interviews were conducted by GfK Public Communications and Social Science, using GfK’s KnowledgePanel®, a statistically representative sample source used to yield results that are projectable to the American population. To qualify, respondents had to be 18 to 26 years old. The margin of sampling error for national data is +/- 3.5 percentage points at the 95 percent confidence level. Margin of error for the state of Ohio and the Charlotte, N.C.; Columbia, S.C.; Dallas-Fort Worth, Texas; Detroit, Mich.; Philadelphia, Pa.; Wilmington, Del.; Phoenix, Ariz.; Seattle-Tacoma, Wash.; San Francisco, Calif.; Boston, Mass.; and Raleigh-Durham, N.C. DMA augments are higher than that of the national sample.
About Better Money Habits®
Bank of America has made a substantial commitment to address the need for better financial education by partnering with Khan Academy – a nonprofit with the mission of providing a free, world-class education to anyone, anywhere. Together, we’ve developed Better Money Habits®, a free, objective online financial resource that pairs Khan Academy’s expertise in online learning with the financial know-how of Bank of America. Better Money Habits® delivers simple, easy-to-understand information on a wide range of personal finance topics, including saving, budgeting, building credit, paying down debt, paying for college and buying a house.
About Bank of America Environmental, Social and Governance
At Bank of America, our focus on Environmental, Social and Governance (ESG) factors is critical to fulfilling our purpose of helping make people’s financial lives better. Our commitment to growing our business responsibly is embedded in every aspect of our company. It is demonstrated in the inclusive and supportive workplace we create for our employees, the responsible products and services we offer our customers, and the impact we help create around the world in helping local economies thrive. An important part of this work is forming strong partnerships across sectors – including community and environmental advocate groups, as well as nonprofits – in order to bring together our collective networks and expertise to achieve greater impact. Learn more at www.bankofamerica.com/about, and connect with us on Twitter at @BofA_News.
Reporters May Contact:
Britney Sheehan, Bank of America, 425.467.9744