Young adults lack basic money know-how for long-term financial success.

Over the past decade, there's been a tremendous shift in attitudes about the financial future. While young people were "very concerned" about their personal financial futures in 2009, the new 2018 research indicates young people are much more confident about their financial futures:

• On average, young adults expect to retire at 60 years of age, seven years earlier than full Social Security benefit eligibility for their age bracket.
   
• More than half (53%) believe their parents will leave them an inheritance, versus the average 21% of people who actually received an inheritance of any kind between 1989 and 2007.

But their optimism may be leading to bad money habits. Young adults are accruing significantly more debt, but their savings don't meaningfully increase: on average, young millennials (ages 21 to 25) have saved just 15% more than Gen Z (ages 16 to 20)—yet they have 169% more debt. Another one-third (33%) of respondents say they skipped a meal because they didn't have enough money.

At a critical point in their financial lives, there is plenty of confusion about debt. Many young Americans do not understand the fundamentals of debt—in particular the difference between good and bad debt:

• Only 38% believe student loans are good debt.
   
• Respondents are similarly split on whether car loans are good or bad debt.
   
• In addition, while 81% say they want to own a home, only 54% believe that a mortgage is considered good debt.
   
• Most concerning, 51% say they currently have some sort of debt, but only 3% would pay down that debt if given an extra $1,000.

"We live in an increasingly complex financial world, where our personal responsibility for financial management has increased dramatically, but our basic understanding of our finances has lagged behind," Schwab-Pomerantz said. "We need to commit to educating our youth about money management, so they have the opportunities to achieve the financial freedom they want and deserve."

Most young adults (69%) say their parents are good financial role models and their most trusted source for financial advice (39%) compared to a bank, online resources, and friends. And unlike previous generations, most young adults today say their parents are more likely to talk to them about money than sex (67%) and drugs (56%).

Young people also indicate strong interest in learning how to manage their money, including how to make enough money to reach their financial goals (71%), how to keep financial information secure (68%), how to save enough to be set in retirement (65%), how to manage a budget for necessities (65%) and learn the difference between good and bad debt (55%).

Young adults have many financial goals, including being financially independent.

Schwab provides a range of resources and learning programs to help parents, guardians, and young people make smart financial decisions and achieve long-term financial success, including Schwab MoneyWise^®, a comprehensive and unbiased source of financial education, guidance, and interactive tools.

More information on the survey results can be found in this presentation and on Schwab MoneyWise

The online survey was conducted by Logica Research (formerly known as Koski Research) from June 12 to June 20, 2018, among 2,000 Americans ages 16 to 25. Quotas were set so that the sample is as demographically representative as possible. The margin of error for the total survey sample is three percentage points.

At Charles Schwab, we believe in the power of investing to help individuals create a better tomorrow. We have a history of challenging the status quo in our industry, innovating in ways that benefit investors and the advisors and employers who serve them, and championing our clients' goals with passion and integrity.

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