Landmark Study Shows Financial Stress Shaping Marriage, Kids and Home Ownership

New findings from the landmark study of first-year college students as they move into middle age underscore that young adults are feeling financial strain and that their money-related stresses result in financial decisions that are substantially shaping their lives.

The study is part of the University of Arizona’s Pathways to Life Success Project, which began with a survey of over 2,000 students comprising the University of Arizona’s class of 2011 and has continued to survey over 1,500 of those students at multiple times in recent years. The cohort being analyzed was in the freshman class at college before the economic troubles of a tanking economy and global recession arrived. In the subsequent years, student debt jumped to new heights, while unemployment and other economic benchmarks underscored the difficulties that these students would face in their post-college years.

The latest findings of the Pathways to Life Success Project illustrate that the financial stresses felt by these college graduates are impacting their financial decisions in many ways. Approximately fifty percent of those recently surveyed report that they still use financial support from their families in order to meet their expenses. Even more surprising to many observers is the fact that nearly half of those relying on that family support are employed on a full time basis.

Recognizing the significant expenses that come with many traditional social and economic goals of individuals and families, combined with the respondents’ current financial stresses, many in the cohort have either postponed or rejected those traditional objectives. For example, less than one-fifth reported that home ownership is not important and that living on their own is not relevant. Moreover, less than one-third reported that neither marriage more having children is a priority.

Further fueling the fire for financial literacy professionals and further underscoring what they have been saying for years was the respondent reports that student loan debt remains a devastating obstacle, which those with significant debt also reporting lower levels of happiness than those with little or no debt.

While many contend that the generation of individuals who are the subject of this project are facing challenges driven in part by the economic and other realities of their generation, financial education professionals also are asserting that these findings underscore the importance of greater financial literacy among these individuals and their families as they continue to navigate an increasingly complex personal financial landscape. The continued series of surveys among this cohort will, no doubt, remain a closely watched study as an important window into the minds and financial decision-making processes that are employed by these respondents in the years ahead.