TD Ameritrade survey: Paying for college is top concern for "Generation Z"News added by National Underwriter on June 22, 2012
National Underwriter

National Underwriter

Joined: April 22, 2011

By Warren S. Hersch

How to fund a college education and pay off student loans are the chief concerns of four in ten young people today, new research reveals.

TD Ameritrade Holding Corporation, (NYSE:AMTD), Omaha, Neb., published this finding in a summary of results from an online survey of 2,001 U.S residents. The respondents included 1,001 youths born between 1990 and 1999; and 1,000 of their parents.

The top concern of young people ages 13 to 22, which the study labels “Generation Z”, are affording college (39 percent) and having a large student loan balance (39 percent).

Nearly 6 in in 10 (58 percent) of Gen Z parents who were surveyed say they took out their own student loans. And of these, 43 percent are still paying the loans back.

More than half (51 percent) of Gen Z parents who are still paying back college loans also have a 529 college savings plan to support their child's education. One in four of Gen Z youths and their parents, the survey says, share a concern about jobs and unemployment.

Three in four (76 percent) of Gen Z youths say that saving money is important. And four in 10 (41 percent) say they have a budget and follow it closely.

When asked what they would do with an extra $500, 55 percent of Gen Z respondents say they would save the month; 11 percent say would save the money for college.

The survey observes, however, that Gen Z is “showing signs of developing early bad financial habits.”

Among Gen Z respondents who have a credit card, more than half (56 percent) have carried a balance for six months or longer (only 23 percent pay off the balance each month). Additionally, 23 percent of 19-to-22 year olds and 41 percent of 16-to-18 year olds claim they do not have either a checking or savings account.

Gen Z respondents who had experience with more financial products were found to be better budgeters. And on average those good budgeters had $850 more in savings than those who didn't budget as well ($950 vs. $100 saved).

Additionally, the survey found, good budgeters have “extensive discussions” with their parents about saving money (67 percent) compared to those who aren't good budgeters (34 percent).

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