For Young Americans, Financial Realities Are Redefining What It Means to Be an Adult

Bank of America/USA TODAY Better Money Habits Report Also Finds Financial Issues Will Be One of the Largest Deciding Factors for Young People in the Upcoming Election

Thursday, October 6, 2016 9:00 am EDT

A new Bank of America/USA TODAY Better Money Habits® Report released today finds that for young Americans, the definition of adulthood has changed: it is less about age and more about financial independence. According to the report, which surveyed 18- to 26-year-olds across the country, most young people (62 percent) do not feel like adults when they turn 18.

For this age group, which includes younger millennials as well as older members of Generation Z, adulthood is less about age and more about their personal finance situations.

  • When asked to define adulthood in their own words, “financial independence” was the top answer.

  • Thirty-nine percent mark adulthood with a financial milestone, more so than traditional life milestones such as graduating from high school or college (7 percent) or getting married/starting a family (7 percent).

  • For those who feel like adults, most say it’s because parents helped prepare them (60 percent), they have a job (60 percent) or they have good role models (49 percent). For those who do not feel like adults, the main reason – cited by about four in five – is because they still rely on their parents.

Among the 22- to 26-year-olds surveyed, only 47 percent pay their own rent, 41 percent have their own health insurance, only 27 percent contribute to a 401(k), and 57 percent pay their own cell phone bills. Naturally, younger Americans ages 18 to 21 are taking on fewer financial responsibilities: only 18 percent pay their own rent, 12 percent have their own health insurance, only 9 percent contribute to a 401(k), and 26 percent pay their own cell phone bills. However, when it comes to saving, age does not make a difference. Young Americans ages 18 to 21 were just as likely (58 percent) as those ages 22 to 26 (also 58 percent) to say they are setting aside money for the future.

"Despite their best efforts, financial independence can be hard to come by for young Americans today. Starting out in the job market can be intimidating, especially with one in three carrying student debt,” said Andrew Plepler, Environmental, Social and Governance executive, Bank of America. “As a group that has seen the ups and downs of the economy, they know what they’re up against. If we bring them the right resources to take control of their financial futures, that will go a long way in helping them achieve greater financial independence. That’s why we partnered 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.”

Young Americans generally optimistic but proceeding with caution

In thinking about the future, the outlook of young Americans today may be best described as cautiously optimistic. While the majority (70 percent) feel somewhat or very optimistic about their financial prospects, they express significant doubts about the economy (57 percent) and the job market (43 percent). A majority (59 percent) report being worried about finding a career path that will support the lifestyle they’ve envisioned for themselves.

Pragmatism at the polls: young voters prioritizing pocketbook issues

With the campaigns in full swing, young Americans expect the upcoming presidential election to impact their personal financial futures and are heading to the polls with financial matters in mind. Contrary to popular belief, young voters say that economic issues (65 percent) are more important to them than social issues (34 percent) in how they vote. Still, if asked to choose, the majority would choose a candidate that’s best for the country (79 percent) over one who would improve just their own financial situation (21 percent).

  • Job growth/unemployment (27 percent), health care costs (25 percent) and college affordability/student debt (24 percent) rose to the top as young voters’ top campaign issues in this election.

  • Among those with student debt, nearly one in four say it will impact the way they vote “a great deal.”

Young Americans wish they learned more about personal finance in school

While striving for financial independence, the majority of young Americans 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 Americans are not necessarily feeling “life-ready” upon graduating. Only 31 percent said their high school education did a good job teaching them strong financial habits. Of those who attended or are currently attending college, only 41 percent said their college education did or has done a good job imparting those lessons.

When asked what they wish they had learned more about in school, nearly all said personal finance, more so than any other subject:

  • Forty-three percent wish they had learned how to invest.

  • Forty percent wish they had learned how to do taxes.

  • Twenty-six percent wish they had learned how to manage monthly bills.

A lack of practical knowledge has left many feeling ill-equipped for the road ahead. Of those who attended or are attending college, two in five had doubts about whether it prepared or is preparing them for the “real world."

Young women tend to be more financially independent than men; education level makes a difference

In nearly every category included in the survey, young women reported taking on financial responsibilities at a higher rate than young men.

  • Sixty-one percent of women ages 18 to 26 are saving, versus 55 percent of men.

  • Thirty-six percent do their own taxes, versus 28 percent of men.

  • Thirty-three percent have their own health insurance plan, versus 25 percent of men.

The survey also found that those young Americans without college experience were more likely to characterize themselves as adults at an earlier age. Thirty-six percent of those who had no college experience consider adulthood to begin at age 18, compared to 24 percent of those who attended college.

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, a world-class education to anyone, anywhere. Together, we’ve developed Better Money Habits®, a free, objective online financial education 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 and connect with us on Twitter at @BofA_News.

Reporters May Contact:
Britney Sheehan, Bank of America, 425.467.9744