Young adults are taking longer to reach 'key life milestones' impacting finances later, analysis shows (2024)

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Young adults are taking longer to reach 'key life milestones' impacting finances later, analysis shows? ›

In 2021, adults who were 21 were less likely to have a full-time job; be financially independent, living on their own or married; or have children than their predecessors from 1980. Today's young adults are closer to full-time employment and financial independence by age 25, the analysis of Census Bureau data shows.

What Are Common Financial Mistakes Young Adults Make? Some common financial mistakes that young adults make include high credit card debt, a lack of financial literacy that leads to poor budget choices and a lack of savings, not having an emergency fund, not addressing student loans, and not planning for the future.

Adults who are 21 are less likely than their predecessors four decades ago to have reached five frequently cited milestones of adulthood: having a full-time job, being financially independent, living on their own, getting married and having a child.

According to the survey, 57% of young adults also live with their parents or in a parent's home. The economic challenges posed by high housing costs, inflation and broader economic precariousness have made it difficult for many young adults to afford living independently.

Financial worries

The cost of university fees and the general cost of living are weighing heavily on the minds of young adults. In a 2022 Harvard study [PDF] of more than 1,800 people aged 18 to 25, more than half of respondents reported that financial worries (56 percent) were negatively impacting their mental health.

In 2022, more than one-third of young adults reported earning no income through wages or a salary, up from one-fifth in 1990. The share of young adults reporting depression climbed from approximately 4% in 2017 to 12.4% in 2022.

That said, the typical age of financial independence should be between 20-23 years old, according to a Bankrate survey.

The real challenges of young adulthood

Finances and school are two of the biggest stressors young adults often face, and the two can go hand-in-hand. Our media portrays college life as all about partying and having fun and neglects some of the real-life challenges that are also associated with college.

45% of young adults say they are completely financially independent from their parents. Among those in their early 30s, that share rises to 67%, compared with 44% of those ages 25 to 29 and 16% of those ages 18 to 24. 44% of young adults say they received financial help from their parents in the past year.

What is the biggest issue facing the financial industry today? ›

Fraud. Fraud poses a growing challenge for the finance sector, and with advancing technologies, it's becoming trickier to tackle. In a recent survey by KPMG, over half of respondents globally reported an increase in both the volume and total value of external fraud.

Adolescence (generally defined as puberty through age 18) Young adulthood (generally defined as 18 to 22 or 18 to 25) Later adulthood (generally defined as mid-20s and older)

The adult milestones examined are financial independence, completing education, working full-time, leaving parents' home, getting married, and having children.

People in late adulthood continue to be productive in many ways. These include work, education, volunteering, family life, and intimate relationships. Older adults also experience generativity (recall Erikson's previous stage of generativity vs.

Most people, even in their mid-to-late 20s are still struggling to establish themselves. That can be hard to do if your job isn't paying you enough, you're struggling to make rent, have no savings, and are being crushed by debt.

Unexpected costs, for example, medical bills. Failed investments or business ventures. Problem gambling. Lifestyle choices, for example, overspending or living beyond your means.

As young people have not had time to build good credit, they typically face high interest rates and a limited ability to borrow. They are unable to save. Given their modest financial resources, young people often find it difficult to build savings and may accrue credit card debt to pay for bills or emergency expenses.

It may be that you have too much credit card debt, not enough income, or you overspend on unnecessary purchases when you feel stressed or anxious. Or perhaps, it's a combination of problems. Make a separate plan for each one.