Marketing Financial Savings Plans to Young Adults to Increase
Until recently, the personal savings rate for most U.S. consumers was dismal. This was especially true for younger consumers who may have been struggling with paying off student loan debt and trying to establish their own households. All that seems to have changed during the recession. Research to be published in The Journal of Consumer Affairs indicates that even younger consumers have realized the importance of a personal safety net.
The study, carried out by Ohio State Univeristy researchers, suggests the following percentages of consumers spend less than they earn:
- 25-year-olds: 61%
- 35-year-olds: 58%
- 45-year-olds: 56%
- 55-year-olds: 56%
The researchers interpreted these findings to mean that spending less than total income earned translated to personal savings. Thus, 25-year-olds had the highest savings rate of the studied groups.
Writing for the New York Times, Jennifer Saranow Schultz draws attention to other studies which have discovered similar trends. For example, Bank of America Merrill Lynch statistics show that consumers with the highest ‘start’ savings rate in 2009 were between the ages of 21 and 35. And a Fidelity report pointed to the high level of interest in daily money management on the part of younger consumers.
Ohio State researcher Sherman Hanna, in analyzing the results of his study, called for more marketing to target younger consumers with poor track records when it comes to saving. This includes “single women, the less educated and middle-income African-Americans.” Financial institutions will be looking for new ways to increase business in 2010 as some of their profitable products such as credit cards will be subject to increased legislation. Given the new level of consumer interest in money management, marketing financial responsibility may become more visible in 2010.[Source: Schultz, Jennifer Saranow, Young Adults May be Saving After All, New York Times, 12.21.09]