Debt isn’t on the minds of just Washington these days. TD Ameritrade’s latest Investor Index survey of the financial attitudes of young people is out, and affording college and having a large student loan balance when they graduate are among their top concerns over money.
Thirty-nine percent of young respondents listed both issues as a concern. Perhaps it’s not surprising, since parents of young people who also were polled for the survey say they’re still in hock for college themselves. Of the 269 parents in the survey who took out loans for higher ed, 43 percent are still paying them back.
The survey of 1,000 so-called Gen Z youth (ages 13 to 22) found strong interest in college, with 61 percent saying it is “very important” for future success. About two-thirds say their parents have spoken with them about saving money for school.
Yet knowledge of tax-advantaged 529 college savings plans aren’t much on the radar of either Gen Z or parents. You wouldn’t expect a teenager to be au courant with those programs, and the numbers bear that out—74 percent said they never heard of 529s, or just knew the name and nothing else.
Yet fully half of the 1,000 parents of Gen Z youth hadn’t heard of 529s either, or just knew of the name. Only 25 percent knew “a fair amount” or “a great deal” about the plans.
There’s good news and bad news for advisors who wonder about the prospects of Gen Z as future clients:
• 76 percent of Gen Z said saving money is important, and 41 percent have a budget they follow closely.
• Among those with credit cards, 56 percent have carried a balance for six months or more; just 23 percent pay it off each month.
• Just 12 percent have bought stocks.