Casting Doubt on Common Perceptions: The Majority of Young Adults Paying Bills on Time and Tracking Spending; Responsibly Using Credit Cards to Establish Credit
NEWARK, Del.--(BUSINESS WIRE)--Young adults feel confident in their money management skills and
demonstrate responsibility by paying bills on time, tracking their
spending, and not spending more than they have, according to “Majoring
in Money 2019,” the latest report from Sallie Mae and Ipsos. They
are also eager to establish credit and expand their financial literacy;
when put to the test, results show more education on managing finances
would be beneficial.
“Majoring in Money 2019” examines the financial skills of three groups:
college students, college graduates, and non-completers, those who began
their college studies but left school without obtaining a degree.
College graduates are the most confident, with 71% rating their money
management skills as good or excellent, while 59% of college students
rate themselves the same way. Forty-two percent of those who did not
complete college rate their skills as good or excellent.
The majority of young adults demonstrate fiscal responsibility in a
number of ways. Ninety-one percent of college graduates, 84% of
non-completers, and 72% of college students pay their bills on time, and
more than half of each group say they track their spending and never
spend more than they have. Sixty-two percent of college graduates, and
half of college students and non-completers are saving money every
month. Forty-one percent of college graduates say they have an emergency
fund, compared to 22% of college students and 31% of non-completers.
When it comes to paying for purchases, debit cards are nearly universal,
and are the most frequently used payment method. While 81% of young
adults still carry cash, 89% of college graduates and 91% of
non-completers and 85% of college students use debit cards. Eighty-eight
percent of college graduates, 86% of students and 78% of non-completers
use mobile payments, most often citing PayPal and Venmo.
“For the most part, these young adults prove their savviness by making
their money resources work for them,” said Julia Clark, senior vice
president, Ipsos. “College graduates are more likely to have a credit
card in their wallet, but are also the most likely group to say they pay
their credit card balance in full each month.”
Young adults aren’t shying away from credit cards, and the majority have
obtained one to establish credit. Eighty-three percent of graduates, 61%
of non-completers, and 57% of college students have at least one credit
card. Sixty percent of college students, and 64% of college graduates
report paying credit card bills in full each month, compared to 32% of
non-completers. Virtually all young adults—97%— make at least the
minimum payment each month.
“Majoring in Money 2019” also identifies a relationship between
completing college and financial management success. College graduates
are most confident, better understand how money and credit work, know
their credit score, and are saving from their earnings. That said, young
adults, including college graduates, are interested in further
developing their money management skills, and the report highlights the
need to do so. When put to the test via a four question, multiple-choice
quiz on interest and the cost of credit, only 24% of college graduates,
18% of non-completers, and 10% of students answered all questions
correctly.
“We’re all lifelong learners, and it’s especially true when it comes to
financial literacy,” said Raymond J. Quinlan, Chairman and CEO, Sallie
Mae. “While real-world experience can contribute to a better grasp of
financial matters, a relationship between completing college and
financial management success is clear. Young adults are telling us
they’re hungry for more information, and we’re committed to creating
tailored products and tools to help them continue to build money
management skills and forge their path to what’s next.”
“Majoring in Money 2019” reports the results of 2,419 online interviews
with young adults ages 18-29. Ipsos conducted interviews in December
2018 through January 2019 of 810 college students, 804 college
graduates, and 805 who attended college but are no longer enrolled and
do not have a degree.
The complete report and a related infographic are available at SallieMae.com/MajoringInMoney.
Join the conversation using #MajoringInMoney.
Sallie Mae and Wise
Bread will co-host a Twitter chat to discuss the report on Thursday,
April 18, at 3 p.m. ET. Follow the chat using #MajoringInMoney and
#WBChat.
For more information, or to start your plan to pay for college, visit
SallieMae.com.
Ipsos is a global independent market research company ranking
third worldwide among research firms. At Ipsos, we are passionately
curious about people, markets, brands, and society. We make our changing
world easier and faster to navigate and inspire clients to make smarter
decisions. We deliver research with security, speed, simplicity, and
substance. We believe it’s time to change the game — it’s time for Game
Changers! Visit http://www.ipsos-na.com
to learn more.
Sallie Mae (Nasdaq: SLM) is the nation’s saving, planning, and
paying for college company. Whether college is a long way off or just
around the corner, Sallie Mae offers products that promote responsible
personal finance, including private education loans, free scholarship
search tools, free college financial planning tools, and online retail
banking. Learn more at SallieMae.com. Commonly known as Sallie Mae, SLM
Corporation and its subsidiaries are not sponsored by or agencies of the
United States of America.
