Young Adults' Perspectives on Wealth Building: The Desire for Financial Stability First

• In Event: Designing Early Wealth-Building Policy for Equity, Scale, and Impact

Abstract

Young Americans are losing faith in our economy and trust in our institutions as day-to-day costs rise, and financial milestones feel out of reach. These pressures risk young adults putting off wealth building, precisely at a time when traditionally, people are investing in education, homes, and business for long-term financial stability. 

What wealth-building goals are young adults aspiring to? Are they traditional goals like higher education and homeownership or reflective of trends in the job market and financial products like fintech investing platforms? Understanding the financial milestones young adults strive toward and the barriers they face is critical for practitioners and policymakers working to expand opportunity for all. To explore young adults’ wealth-building goals and the barriers to achieving them, we conducted in-depth interviews with 16 young adults (ages 18 to 24) from across the US with low to moderate incomes.  

The interviews revealed the barriers to—and goals of—young people building their futures.  
 • Financial stability and independence are key goals for young adults in the short term, but they face steep challenges. Young adults described difficulties in navigating the affordability crisis, adjusting to artificial intelligence, and getting on the career ladder for high-quality roles that pay the bills. 
 • Homeownership and higher education remain central to young adults’ long-term wealth-building plans, but they face substantial barriers to achieving these goals. Many young adults described how they felt they had little agency and control over some of the challenges that impact their long-term financial planning, including affording homeownership and higher education, having long-term career stability and planning, and changing student loan policies and job opportunities. 
 • Young adults saw credit and debt as necessary to pursue their long-term wealth-building goals given the high costs of homeownership and higher education. Most expressed feeling hesitant and anxious about debt burdens. 
 • The key to young adults feeling comfortable pursuing their wealth-building goals was detailed, timely, and trusted financial knowledge, and they wanted relevant information when they had the economic resources to invest.  

Overall, these insights demonstrate how affordability, labor market demand and earnings, and actionable financial knowledge play a role in young adults’ wealth-building journeys. Policymakers can pursue efforts that address these barriers to stability and wealth, including supporting employment outcomes, improving access to quality credit while minimizing debt burdens, enhancing college access and reforming student debt, increasing housing affordability for renters, strengthening financial capability and knowledge, and facilitating wealth building through early wealth building accounts, homeownership, and retirement.

Author

• Sam Atherton, Urban Institute
  Presenting Author