The youngest group surveyed for the “2013 Women, Money & Power Study” from the Allianz Life Insurance Company of North America shows the highest level of interest in personal financial topics. But the same group—and women generally—also demonstrate a significant lack of confidence on the subjects they hope to learn about.
Among women younger than 34, 69% said they are interested in learning about financial planning and investing topics. That’s compared to 65% for women ages 35 to 44, the next highest age group.
When it comes to complex financial topics such as compound interest, market capitalization, debt ratios and bond ratings, Millennial women also showed the most interest, with 57% saying they would like to pursue such topics. Women ages 45 to 54 came in just below that, at 56%.
In addition, younger women also showed significantly higher interest in retirement planning than the next closest age group, with 77% of Millennials reporting interest compared to 66% for the next highest group, those ages 35 to 44.
“It’s encouraging to see younger women so interested in personal finance, but these women really need to follow up that curiosity with an action plan that will help them feel more secure,” says Katie Libbe, vice president of consumer insights for Allianz Life. “It’s never too early to start financial planning.”
Results from the survey are not all positive for Millennial women. In fact, the youngest age group surveyed reported the lowest level of access to professional guidance, with more than eight in 10 (84%) saying they currently do not work with a financial professional. That’s substantially higher than the next highest age group, those ages 35 to 44, who clocked in at 68%.
Even if they do work with a financial professional, many younger women are confused about what financial knowledge they need. More than four in 10 (44%) Millennials reported they “don’t know what to ask for” when seeking financial information—compared to 36% for the next highest group, women ages 35 to 44.
Also worrisome is the fact that many Millennial women cited their relationship status as a major factor keeping them from serious financial planning. Nearly half (49%) said that being single allowed them to put off any serious thinking about financial planning, the highest of any age group. But those in a relationship were also taking less responsibility, with 39% of Millennial respondents saying they focus on saving money and let a husband or partner do the actual investing.
“Age or relationship status should not be a barrier to building the foundation for a sound financial future,” Libbe says.
Survey researchers use the findings to make a number of recommendations to Millennial women, including the following:
- Set and stick to a budget. Figure out how much money is needed for essentials and how much is left over to save and invest. Setting a budget is a crucial part of this process.
- Start saving today. Younger people may find this difficult with a limited income, but the more saved now, the greater the potential effect of compounding.
- Invest in employer sponsored retirement plans. Not to do so is to leave money in the form of 401(k) matching contributions. Although it feels like a challenge now, 401(k) saving can pay off significantly in the future.
- Find a financial professional. Many young people feel they don’t have enough money to work with a financial professional. In reality, many professionals are happy to help younger clients. Take the time to research and interview potential candidates.
More on the annual survey results is available here.