Young adults more focused on saving money

The past several years have taught some hard financial lessons to people of all backgrounds, and one of the demographic groups that has been hit hardest by this issue is young adults, age 18 to 34. These people were typically coming to the point at which they need to gain financial independence in a time when the economy was at the toughest points in decades. Their parents have therefore tried to play a larger role in those young people's financial educations.

Today, about 40 percent of young adults say that the biggest tip they received from their parents about managing their finances was to start saving as early as they possibly could, according to a new Better Money Habits survey from USA Today and Bank of America. However, that number was a little bit down from the 42 percent of older adults interviewed who said their parents passed the same advice on to them years ago.

Why is that so important?
In general, financial experts believe that the ability to save money reliably each month is one of the most crucial to those trying to build a solid standing, the report said. And because of the way compounding interest works, the earlier people start, the better off they're going to be. This isn't to say that those who are in their mid-30s or even their 40s should not start saving, but it's generally advisable that those who have the opportunity to save should do so as soon as possible.

"If you follow that advice, you tend to do well on many of the other things,'' Anthony Criscuolo, a certified financial planner based in Fort Lauderdale, Florida, told the newspaper. "If you're saving early, you're generally spending less, so you're avoiding credit cards and debt to some degree.''

Unfortunately for many millennials, who either started or graduated college during and in the immediate wake of the recession, saving wasn't always an option for them, the report said. Many had to work only part-time, if they could get jobs at all, and a large number even moved back in with their parents as a means of making ends meet. Now, with the economy improving, it seems that many are now starting to advance back toward those financial goals imparted to them by their parents.

What else are young people focused on?
It seems that the discrepancy between the advice on saving from one generation to the next comes from the fact that more parents today are warning their kids against spending more money than they should, the report said. In all, 20 percent of young adults said this is what their parents stressed to them, compared with 18 percent of older ones who received that advice when they were starting out.

Along similar lines, more than 4 in 5 parents say they've stressed to their kids how important it is to stick to a budget, but just 2 in 3 young adults said they recall getting that advice, the report said. There was a similar disconnect when it comes to saving for retirement; 62 percent of parents said they highlighted how critical this can be, compared with 45 percent of young adults who remember it.

Taking even the most basic steps to start saving money, which could include paying down outstanding credit card balances, could go a long way for any consumer who remains worried about his or her finances. Freeing up even $100 per month could help to quickly build savings to levels that can help to ensure ongoing financial security.

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