While the path to financial security can have ups and downs, a new survey suggests younger consumers are more satisfied with where they are on the journey.
Financial services company Freedom Financial Network surveyed 2,005 adults in January to find out whether they believe they are better off this year than last year and how optimistic they are about their financial futures.
Compared to last year, 43% of respondents said they feel like they’re doing the same financially this year, while 30% believe they are better off financially this year and 27% believe they are worse off. When those numbers are broken down by generation, younger consumers appear to have more to cheer about.
Younger consumers have more financial satisfaction
Generation Z respondents — those ages 18 to 22 in 2020 — were most likely to feel like they’ve made financial progress. In fact, 43% of Gen Zers said they feel better off financially this year than last year, compared with:
- 39% of millennials (those ages 23 to 38)
- 28% of Generation Xers (those ages 39 to 54)
- 19% of baby boomers (those ages 55 to 73)
One reason for the optimism could be that younger respondents were more likely to expect a higher household income in 2020. Among respondents, 61% of millennials expect to have a higher household income than last year, compared with 53% of Gen Zers, 48% of Gen Xers and 30% of baby boomers.
Also, 32% of millennials said they’ve received a pay raise in the past 12 months, which was a higher percentage than Gen Xers (27%), Gen Zers (22%) and baby boomers (12%).
Financial challenges remain
Despite the optimism some consumers are feeling, there are still signs that many may encounter financial challenges this year. For example, nearly half have less than $1,000 in non-retirement savings:
- 36% had less than $500 in their checking and savings accounts
- 13% had $500 to $999
- 19% had $1,000 to $4,999
- 11% had $5,000 to $9,999
- 21% had more than $10,000
Also, many are starting this year grappling with the same debt they had last year. Among respondents, 29% said they had the same amount of credit card debt as last year, while 23% reported they have more credit card debt than last year. Nearly a quarter (24%) said they have less credit card debt than last year, and 24% said they have no credit card debt.
No matter how optimistic you are about your finances, there are steps you can take to make improvements. You could make 2020 the year you pay down credit card debt if you have it. Or, you could pay down credit card debt faster by transferring your balance to a card that offers a 0% introductory APR. A credit card debt payoff calculator can help you figure out how long it will take to become debt-free.