The 10 Essential Facts Affecting Your Future

Key Takeaways

  • Money issues are tough for today’s young adults. It’s not your parents’ or grandparents’ financial reality, but there’s hope if you’re smart.
  • Delaying marriage, home ownership and parenthood has benefits in the short run but can create retirement challenges down the road.
  • Young adults know they need to be much more proactive about saving for retirement than previous generations were.
  • Don’t be overly concentrated in cash during your early years—it’s the best time to take smart risks.

When I started in business, an old sage told me that all progress starts by telling yourself the truth. If you’re a young adult, I’d like to share 10 truths with you about building good, strong money habits for your future.

  1. Your generation matters. If you’re between the ages of 18 and 35, you account for 25 percent of the U.S. population and an even bigger percentage of the workforce. Each year going forward, you and your peers increasingly impact the economy. Use that knowledge to your advantage.
  2. You’re highly educated. Nearly half of you between the ages of 25 and 34 (47 percent) have a postsecondary degree. That’s the highest level of educational attainment for this group on record, and you have much higher expectations for income and career satisfaction than any group before you. 
  3. Math skills are lagging. According to the Organization for Economic Cooperation and Development, the U.S. ranks 21st out of 22 developed countries when it comes to math knowledge. That’s a big problem because so much of financial literacy requires basic math acumen. You can’t make better money decisions if you can’t do basic math.
  4. Student loans are crushing. Young adults have over $1 trillion of student loan debt—or $27,000 apiece on average. That needs to come down or you’ll never achieve true financial independence.
  5. Fewer young adults are working their way through school. College costs have gone up much faster than inflation, so it’s even more important to start earning an income as early as possible so you’re not suffocated by student debt the moment you graduate.
  6. You have less faith in financial markets and the economy. Today’s young adults—one third of the workforce—had already endured two protracted bear markets and an epic recession. Those emotional scars are understandable, but you can’t be completely risk-averse at such a young age.
  7. You have way too much in cash. Studies show that millennials keep more than half of their investments in cash. That’s twice as high as older generations did and the opposite of what you would expect given your age. Cash doesn’t make you any money. It just sits there stagnant and actually costs you a little in real terms due to inflation. Short-term cash is OK, but in the long term it’s disastrous at your age.
  8. You’re delaying marriage. In 1960, about 70 percent of young adults (ages 20 to 34) were married. Today, only 30 percent of you are. On the plus side, you have many more two-income families, which makes it easier to save. However, you’re also delaying parenthood. At first you have more capital to work with when the kids are young, but kids are very expensive, and delayed parenthood cuts into your net worth in your retirement years. 
  9. You’re delaying home ownership. Back in 1980, about one in five people your age (18 percent) owned homes. Today, only 13 percent own homes, even though mortgage rates are MUCH lower. Waiting longer to purchase a home means you’ll be paying off a mortgage later in life, which cuts into your retirement wealth-building years.
  10. You should take advantage of employee-sponsored retirement plans. Putting away pretax money (and getting an employer match) at your age helps you accumulate a nest egg at an astounding rate.
    You know that Social Security’s not going to be as robust for your generation as it was for older generations. Neither will defined-benefit pensions. You need to be proactive about your retirement.


The sooner you understand the unique financial realities facing your generation, the better off you’ll be when it comes to making smart long-term decisions about your money. Hang in there. In the coming weeks and months, we’ll be introducing programs just for young adults to help you with your unique challenges of investing, saving, debt management and wealth building. Until next time, enjoy.


Please note: I reserve the right to delete comments that are offensive or off-topic.

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