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Financial Wellness of Young Adults Age 18–30
Author(s) -
Rutherford Leann G.,
Fox Wanda S.
Publication year - 2010
Publication title -
family and consumer sciences research journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.372
H-Index - 31
eISSN - 1552-3934
pISSN - 1077-727X
DOI - 10.1111/j.1552-3934.2010.00039.x
Subject(s) - finance , credit card , guideline , financial plan , market liquidity , debt , young adult , business , medicine , payment , gerontology , pathology
The purpose of this study was to assess young adults’ financial wellness. A comprehensive model was developed that assumed that young adults’ financial wellness was a function of objective determinants (income, credit card debt, and healthcare coverage); satisfaction with their financial situation; their financial behaviors; and their subjective perceptions. Financial wellness was measured using two financial ratios and a combination of those ratios. A sample of 458 young adult households headed by an individual between 18 and 30 years old was selected from the 2007 Survey of Consumer Finances. The results showed that 47% met the guideline for the liquidity ratio, 35% met the guideline for the asset allocation ratio, and 28% met the guideline for both ratios. The results suggest that the financial wellness of young adults depends on credit management, healthcare coverage, financial satisfaction, spending behavior, planning horizon, and attitude toward financial risk.