Today’s Young Women are More Financially Independent Than Men — But Here’s What’s Holding Them Back

According to new research by Merrill Lynch, 75 percent of young adults define adulthood as being financially independent from their parents. However, 70 percent of early adults (people 18 to 34 years old) receive financial support from their parents. 

Financial independence is elusive to young millennials and Gen Zers largely due to student debt and the rising cost of living. Today’s early adults who graduate with student loan debt start their careers with an average debt of $36,888 and will allocate nine percent of their before-tax salary to loan repayments each month. 

Credit card debt is another crushing financial struggle for young adults. The average balance is $3,700, and one in four early adults with a 401(k) has already made an early withdrawal, most often to cover credit card debt. 

Young women are breaking ahead of the crowd to reach financial stability. Even though they carry about two-thirds of the cumulative student debt in the United States, they’re paid less than men are and they spend more time caregiving, young women are progressing faster and more successfully into financial independence than men are. By age 30, women are half as likely to rely on their parents to pay for the life expenses across Merrill Lynch’s cited expense categories — from groceries to student loans. Additionally, women are more successful as investors because they maintain a long-term view. Women are less likely to tap into their retirement accounts and are more likely to prioritize saving for the future than enjoying life now. 

However, there remains a large opportunity for young adult women to invest more. Young women are less active investors than men, they are less likely to hold investment accounts outside of their employer-sponsored retirement plans, and they are half as likely to be working with a financial advisor. Additionally, they report having less confidence than men in managing investments, and almost half say their biggest fear about investing is that they don’t know enough about what they’re doing. 

All young people — but especially young women — need greater financial education and guidance. And they say so, too. Seventy-two percent of early adults say they would benefit from more financial guidance, and 86 percent of Americans agree that personal finance should be taught in school. However, only five states currently have that requirement. To combat this lack of financial literacy, Merrill Lynch has compiled a financial action plan for young adults. You can access it here. 

No matter how much it has changed over the years, early adulthood has always been a tumultuous stage of life. And with the right tools, it can be a time of self-discovery, excitement and investment in the future for today’s hard-working young women as well. 

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