Financial Confidence
LearnVest-Financial-Confidence-Curve
LearnVest-Financial-Confidence-Curve
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Age 25-34: “The upwardly immobile”<br />
Average income: $59,002<br />
Income growth rate from previous<br />
age bracket: 111%<br />
Average percent confident: 33%<br />
Average annual vehicle payments: $3,641<br />
Average annual mortgage payments: $2,862<br />
Average household size: 2.8 people<br />
Average yearly expenditures: $48,087<br />
Source: U.S. Bureau of Labor Statistics, “Table 1300. Age of reference person:<br />
Annual expenditure means, shares, standard errors, and coefficient of variation,<br />
Consumer Expenditure Survey, 2013”<br />
The false confidence picture comes into sharper<br />
relief in the next age category, those between<br />
the ages of 25 and 34. People in this age bracket<br />
are likely experiencing (or have just experienced)<br />
the biggest income increase in their lives. And<br />
their goals, which typically start to revolve around<br />
lifestyle and building for the future, tend to expand<br />
with this increase. In fact, according to LearnVest<br />
data, savings goals for weddings, home buying,<br />
and “fun” almost double in this age bracket<br />
compared to those under 25.<br />
While retirement and emergency savings<br />
contributions also begin to ramp up at this time,<br />
they may not be at the same rate that a financial<br />
planner would advise, given the upcoming<br />
financial responsibilities, retirement contributions,<br />
and slowed income growth ahead. We see a bit of<br />
an “I’ll cross that bridge when I get to it” mentality,<br />
giving this age bracket a continued sense of false<br />
confidence. It appears that lifestyle spending—not<br />
savings—inflates with growing income.<br />
17 <strong>Financial</strong> <strong>Confidence</strong>: Examining the U-Curve—and How We Might Improve the <strong>Confidence</strong> Trajectory