How Much Money Do 20 Year Olds Have?

The financial standing of individuals in their early twenties often prompts questions about typical income, savings, and debt levels. This age group navigates a unique economic landscape as they embark on careers and establish financial independence. Examining various components of their financial health provides insights into the economic realities faced by young adults today.

Average Earnings

The typical income for individuals in their early twenties varies considerably based on employment status and educational background. For full-time wage and salary workers aged 20 to 24, the median weekly earnings are approximately $784, which translates to an annual income of about $40,768. This figure often represents individuals starting professional journeys, many entering the workforce after or during higher education.

As individuals progress into the 25 to 34 age bracket, median weekly earnings increase, reaching around $1,136, or approximately $59,072 annually. This increase reflects accumulated work experience, transitions into higher-paying roles, or completed professional degrees and certifications. These roles include entry-level positions in sectors like customer service, administration, or specialized fields.

Educational attainment influences earning capacity. For workers aged 25 and older, those with a high school diploma earn a median annual income of about $40,500. Some college, even without a degree, can increase this median to approximately $45,830 annually. A bachelor’s degree provides a substantial boost, with median annual earnings rising to around $67,260. Master’s or higher degrees can lead to median earnings of $80,200 or more for full-time workers aged 25 to 34. Part-time employment, common among students, yields lower incomes, with median weekly earnings for all part-time workers around $288.

Typical Savings and Investments

Savings and investments for individuals in their early twenties reflect nascent financial journeys, often characterized by lower balances than older age groups. The average savings account balance for Americans under 35 is approximately $20,540, while the median balance, a more representative view, is around $5,400. This indicates many young adults have modest cash reserves.

Many 20-year-olds begin establishing retirement savings. The average 401(k) balance for those in their 20s is around $97,440, with a median of $37,668. This disparity highlights that a smaller segment may have substantially higher balances, skewing the average. Common investment vehicles include employer-sponsored 401(k) plans, especially with employer matching contributions.

Individual Retirement Accounts (IRAs), such as Roth IRAs, are popular choices for young adults due to tax advantages and flexible investment options. Building an emergency fund is a common financial goal, with recommendations suggesting three to six months of living expenses. However, many young adults have less than this saved; some reports indicate only 41% could cover an unexpected $1,000 expense from savings.

Common Debts

Debt is common for many individuals in their early twenties, encompassing student loans, credit card balances, and auto financing. Student loan debt is prevalent, with adults aged 24 and younger owing an average of $14,162 in federal student loan debt. For the broader 25-to-34 age group, the average federal student loan debt rises to $33,150. The median student loan debt across all borrowers is between $20,000 and $24,999.

Credit card debt affects many young adults. Generation Z, including many 20-year-olds, carries the lowest average credit card debt compared to older generations, at approximately $2,854. This demographic has seen a notable increase in credit card balances recently. Nearly half of all credit cardholders, including young adults, carry a balance from month to month.

Auto loans are another significant form of debt for this age group. For individuals aged 18 to 29, auto loans comprise about 17% of their total debt, often ranking second to student loans. The average auto loan balance across all consumers is approximately $24,297. Many 20-year-olds acquire vehicles; the average monthly payment for a new vehicle is around $745, while for a used vehicle, it is about $521.

Overall Financial Standing

The financial standing of individuals in their early twenties is best understood through net worth, which provides a comprehensive picture of financial health. Net worth is calculated by subtracting total liabilities (what is owed) from total assets (what is owned). Assets include cash in bank accounts, investments like retirement funds and brokerage accounts, vehicle market value, and real estate equity. Liabilities consist of student loans, credit card balances, and auto loans.

For Americans in their 20s, the financial landscape often presents a lower net worth than older demographics, primarily due to entry-level salaries and educational debt. The average net worth for individuals in their 20s is approximately $113,084. This average can be significantly skewed by a small number of individuals with substantial wealth. A more representative figure is the median net worth for this age group, about $7,638.

This difference highlights that many young adults start from a low financial base or carry a negative net worth due to liabilities exceeding assets. Despite these challenges, building a positive net worth involves diligent saving, managing debt, and beginning investments. This foundational period sets the stage for future financial accumulation as income increases and debt is reduced over time.

Influencing Factors

Numerous factors contribute to diverse financial outcomes among individuals in their early twenties. Educational background plays a significant role, as higher educational attainment correlates with increased earning potential and improved financial literacy. While many pursue higher education to enhance career prospects, associated student loan debt can present a substantial financial burden upon graduation.

Employment status influences financial stability. Full-time employment provides more stable income and benefits, whereas part-time work, common for students, results in lower, less consistent earnings. Young adults employed full-time, even in entry-level positions, often have higher poverty rates than older cohorts, reflecting lower wages and fewer benefits.

The cost of living in their geographic location impacts a 20-year-old’s financial health. High expenses for housing, groceries, and transportation, especially in urban areas, can consume a large portion of income, making saving and debt repayment challenging. Many young adults report high cost of living as a barrier to financial success, leading some to take on side hustles.

Family financial support or obligations are another influential factor. Many young adults receive financial assistance from parents for household expenses or cellphone bills, particularly those under 25. Conversely, some young adults provide financial support to parents, especially those with lower incomes, which can affect their own financial trajectory.