The Adult Transition: The importance of financial wellbeing in young adults

Thanks to Nathan Copeland, Researcher & Marketer at Good With, for this guest blog on how we can take better care of financial wellbeing in young adults.

Time moves fast. The oldest among Gen Z are turning 26 this year, meaning a whole load of Gen Zers are well into their 20s, but when exactly does adulthood start? Is it turning 18? 21? Or even 25? Either way, Gen Z are all in some way shape or form going through a transition into adulthood. Moving out, heading to university (or even finishing), and landing their first big jobs, are all pretty big milestones in such a short space of time, and all of these milestones are heavily impacted by financial independence. 

When it comes to their priorities, 72% of Gen Zers say managing stress and mental health is their most important health and wellbeing concern, but only 45% actually feel that their mental health state is “good”. In a world of constant turmoil – with the cost of living crisis persisting, university tuition costs increasing, and the overall lack of support for young adults as they navigate adulthood – young adults’ mental health and wellbeing is under increasing pressure.

Right now, 4.2 million young adults are experiencing financial anxiety, and are more likely to be stressed about finances than the older population.

For a generation that is so big on the importance of mental health, self-care and stress management, the world of money and personal finance is an area still shrouded in a fog of taboos and lack of knowledge. This becomes increasingly problematic when young adults, often being thin-profilers in the realm of credit, are stunted by being denied fair credit – being locked into scary, high-interest deals purely because it’s their only choice of loan or financing.

Daily money worries and stress can lead to negative mental health events: impacting motivation and self-confidence, exacerbating mental health problems and dictating what you spend your money on – oftentimes resulting in having to skip out on things that make you happy, or at its worst, things that you need to live.

Financial wellbeing is where mental health and money meet. It’s all about feeling at ease about your spending, saving and money monsters – knowing you can meet demands, have financial freedom and be the boss of your own money. But it’s something that many young adults don’t have.

A financial wellbeing app, with a CBT-driven cognitive toolbox (cognitive behavioural therapy focused educational content), a machine-learning AI chatbot, and money management tools that intertwine money and mental health connections, has been built to alleviate money stresses and anxieties. Specifically, the app aims to support young adults navigating adulthood through a scientific and psychology-led approach. 

Recently, we worked with South West Academic Health & Science Network, putting the effectiveness of our app and educational content to the test. The results showed a clear relationship between financial capability and mental wellbeing – young adults who had difficulties in accessing support and understanding money showed lower levels of mental wellbeing. 

Financial stress is one of the biggest challenges for young adults right now, directly impacting their mental health and wellbeing. The relationship between high levels of stress and anxiety are directly correlated with money problems, especially amongst Gen Z. 

‘it shouldn’t be like a stigmatised thing to think about. Like everyone […] needs support or needs some kind of guidance when it comes to it.’ (study participant)

‘I think I have been more conscious about making decisions and I know it is linked to my mental health, like in a more deeper way than I thought it was.’ (study participant)

‘Since coming to Uni, it’s been a bit more obviously more of a stress. I’ve had to figure it all out myself. But since using the app and just exploring the connection a bit more, it’s just like it doesn’t matter how much money I really have because I know as long as I’m taking the right steps, it’s going to be okay.’ (study participant)

We have users coming from all walks of life, but the concepts of money taboos, stigma and isolation were prevalent in user’s first thoughts when it came to personal finance. Since taking part in our study, chatting to our personal money coach chatbot and navigating the app’s features, users are now unlocking deeper connections between their money stresses and anxieties, and how it relates to their own wellbeing. 

The financial landscape has evolved tremendously over the last fifty years, and its restrictions are leaving young adults stunted in achieving their full potential. We believe in fairer finance for everyone, no matter their starting points, and we can’t wait to get our next version of the Good With app in front of users who can grow their money confidence and work towards financial wellbeing confidence.

We’ll be sharing the full results of our study in June, and we’d love for you to get involved or stay in the loop.

Keep your eyes peeled on our LinkedIn for more on our study results and general updates.

Or check out our website for more info and join our app waitlist.