A rocky transition from college to adult life

07/10/2014 1:55 PM

07/11/2014 7:35 PM

Think about the way you’d like to see your twenty-something start out life after college. A full-time job with financial stability. Living away from your cozy confines. Perhaps even thinking about buying a house, getting married and having children.

For many young adults, those types of goals and choices aren’t even on their radar because they’re under financial stress, according to a new study released by the University of Arizona.

The research, sponsored by the nonprofit National Endowment for Financial Education and the Citi Foundation, is the latest installment of a nationally acclaimed study launched in 2007 to track the financial attitudes and workplace changes of more than 2,000 students through their undergraduate college years and into adult life.

That fall, when the students arrived on the Tucson campus, the country was in the waning days of a bull market and the economy was on cruise control. What followed, as we well know, was a steep recession, meltdowns on Wall Street and a soft job market that continues to challenge the slow economic recovery. All the while, student loan debt has climbed to more than $1 trillion, eclipsing credit card debt for the first time.

University of Arizona researchers in the Arizona Pathways to Life Success Project had surveyed students three times in recent years. The fourth and latest report provides an interesting snapshot of the financial and social well-being of the group that’s generally two to three years out of college. About 1,800 members of the university’s class of 2011 participated in the new study.

Among the findings from the survey: Half of the respondents continue to rely on their family for financial support since finishing school, including nearly half of those who have full-time jobs.

In addition, some traditional goals have become less important in the transition from college: 28 percent of those surveyed said marriage was not an important life goal, and 27 percent said having children was not a priority. Nineteen percent said home ownership was not important, and 16 percent rated living on their own as “irrelevant.”

What’s behind the rocky start toward self-sufficiency?

According to the report, student-loan debt remains a “crushing obstacle.” Indeed, when asked about how satisfied they were with their life, young adults with substantial student-loan debt reported lower overall happiness than those with little or no debt.

Other findings from the report:

About 7 percent of the survey respondents reported not looking for jobs. The majority of these late launchers were men. This group was just as likely to come from a lower-income background as a higher-income family, according to the report.

Full-time employees reported feeling significantly “more adult” compared with the way part-time workers rated themselves.

While the report focused on young adults, there are several takeaways for parents. For one thing, “it’s understanding that this generation has a tougher challenge,” Ted Beck, the National Endowment for Financial Education’s chief executive officer, said in an interview. “This is not the 1960s when there were lots of jobs and things were cheap.”

But Beck also sounded the alarm that parents can’t be the checkbook fairy forever. “You might be putting yourself in a weaker financial position that will impact your own financial security,” he said.

There’s one other finding from the survey for parents to think about: Young adults in relationships report Mom and Dad are now taking a back seat to a romantic partner when it comes to influencing financial decisions.

I kinda like that one.

To reach Steve Rosen, call 816-234-4879 or send email to srosen@kcstar.com.

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