A new survey of people around the country shows that younger Americans are getting more and more frustrated. Many Millennials and Gen Z still feel like they’re slipping behind on life’s key financial goals, including owning a home, developing wealth, and getting ready for retirement, even though they are being smart with their money by budgeting, cutting back on spending, and even investing.
The research, done by U.S. Bank and Edelman DXI, surveyed 5,000 adults in the U.S. and found a troubling disconnect: people are doing the “right things,” but economic pressures outside of their control make it seem almost impossible to make long-term success.
A New Financial Reality: Responsible Habits, Dreams on Hold
The survey says that most Americans are good with their money:
- 68% make a budget on a regular basis
- 64% cut back on spending that isn’t necessary
- 57% have made arrangements for their money
But most people feel their initiatives aren’t making a difference in the big picture. A lot of people feel like they don’t have control over their money, especially when things like housing costs and the economy’s uncertainty are big problems.
Some of the most interesting results are:
- 81% think it’s harder to retire now than it was for their parents.
- A lot of people claim that not knowing what will happen with the economy affects their decision to rent or buy.
- 63% are worried that they might have to go back to work because they need money in the future.
The Most Pressure Is on Gen Z and Millennials
Gen Z and Millennials experience the most economic strain. They feel the effects of inflation and market volatility the most, and they are also more inclined to base their living decisions on the status of the economy.
A shocking 91% of Gen Z indicated the economy affects whether they rent or buy.
Almost 90% of Millennials and Gen Z say that their housing choices are limited by their finances.
The current situation feels like a bait-and-switch for a generation that was told that hard effort and education will pay dividends.
Scott Ford, head of Wealth Management at U.S. Bank, said, “This year’s data shows a fundamental shift in the American dream.”
“People who are doing everything right still wonder if the sacrifices are worth it.”
The Definition of Success Is Changing
Younger generations are starting to reassess what success means in light of current economic problems. Financial goals are still important, but the meaning of “success” is changing to incorporate family, community, and emotional well-being.
- 93% of Americans agree that having good personal ties is important to feeling successful.
- 88% see owning a home as a major event
- Having enough money for a decent retirement is still a big sign of success for 93% of people.
Still, a lot of people think those standards are fading away. One in four Gen X people who answered claimed they don’t want to retire at all now.
Putting Off Retirement Planning
A lot of Americans are able to pay their bills every day, but not as many are planning for the future. Planning for retirement is slipping behind, especially for younger persons and women.
- Only 48% are putting money into their retirement accounts on a regular basis.
- Only 37% of Americans who aren’t retired are actively saving for retirement.
- A lot fewer women than males have started planning for retirement (54% vs. 67%).
- There are still inequalities in confidence: only 49% of women think their savings will last, while 66% of men do.
A lot of people are worried about this: 68% of Gen Z and 69% of Millennials are worried about running out of money.
The Planning Advantage: How Financial Advisors Help You Feel More Sure of Yourself
The survey discovered one thing that always helps people feel more confident about their money: having a financial plan and getting help from a professional.
- 89% of persons who have a financial advisor feel like they are in charge of their retirement resources.
- 85% of people who have an advisor feel good about owning a property.
- Having a plan made people with less than $50,000 in net worth twice as sure they were ready for retirement.
- 57% of people with a plan think they could retire early, whereas only 32% of people without a plan think they could.
These data show that a plan can help you see things clearly when things are chaotic.
Ford said, “You don’t have to wait until you’re rich to take charge.”
“Small steps, like making a budget, putting money into investments, and asking for help, can help you get back on track.”
A Big Difference in How Young and Old People See Money
The survey showed big differences between generations:
People in Gen Z and Millennials are the most worried about the economy and have the biggest emotional reactions. Also, they are more prone to think of success as things like health and relationships that aren’t money-related.
Gen X feels financially pressed from both sides since they typically have to support their children and aging parents while also attempting to invest for their own futures. Almost 25% have given up on the idea of ever retiring.
Baby Boomers, who are getting closer to or are already retired, indicated they were more confident overall, but more than half said the economy still got in the way of their goals.
The main point is the same for all ages: it feels like the cost of making progress with money is more than ever, and reaching traditional milestones is now harder.
A Path Forward, One Step at a Time
The U.S. Bank study makes it obvious that Americans are doing their best, but things are changing quickly. External pressures are changing what it means to be financially successful, especially for younger people.
But the good news is that things can still get better. Americans can take back charge of their financial travels by making a plan, asking for support, and making sure their money is in line with what really important.
Ford added, “Even small steps can make a big difference.”
It may seem like financial advancement is out of grasp, but it is still possible.