A new survey reveals that millennials are more likely to have grown up in families that discussed money, marking a shift from previous generations.
Courtney Burrell, a millennial Coloradan, grew up in a household where money was always part of the conversation. Her parents, like many others of their generation, discussed stock picks, savings, and retirement accounts. Burrell credits her parents with inspiring her career in finance. She is now a financial professional at Empower, a financial services company. Burrell’s experience is not unique. According to a recent survey by Forbes Advisor, nearly three-quarters of millennials grew up in families that talked about money, compared to only 41% of boomers. This shift in family dynamics surrounding finance has significant implications for the way millennials approach money management.
The Rise of Financial Conversations in Families:
The Forbes Advisor survey, conducted with 2,000 adults in September, reveals a clear trend: the younger the generation, the more likely they grew up in families that discussed money. Boomers were the least likely to have had these conversations (41%), followed by Generation Z (55%), Generation X (57%), and millennials (73%). Another survey by Northwestern Mutual shows that Americans are learning about finance at increasingly younger ages. Boomers reported having their first family money talk at age 22, while Generation X started at 20, millennials at 18, and Gen Z at 15. This shift indicates a growing recognition of the importance of financial literacy from an early age.
Early Financial Education:
Chad Lewis, a 36-year-old millennial and Northwestern Mutual private wealth adviser, has been discussing money with his parents since middle school. Topics such as credit cards, credit scores, and responsible payment habits were part of these conversations. Lewis’s parents even opened a credit card in his name to teach him about responsible credit card usage and building credit. This early exposure to financial education empowered Lewis to make informed decisions and develop a strong credit score. The experiences of Lewis and others like him highlight the benefits of early financial education within families.
The Influence of Boomer Parents:
Some business scholars argue that boomers championed financial education for their millennial children because their own parents provided little guidance on money matters. Boomers mostly grew up in households headed by members of the Greatest Generation and Silent Generation, who did not discuss money with their children. The contrast between these generations, one marked by economic hardship and the other by affluence, explains the shift in attitudes towards financial education. With boomers commanding a significant portion of the nation’s wealth, they are motivated to ensure their millennial children are well-prepared to manage their inheritance.
Instilling Financial Responsibility:
Trent Long, a 34-year-old millennial, recalls that while some of his high school friends had credit cards tied to their parents’ accounts, he did not. His parents emphasized the importance of living within his means and saving from an early age. This lesson stuck with Long, who went on to co-found BUNKR, an app for securely storing and sharing important information. The financial discipline instilled in him by his parents allowed him to make responsible financial decisions and launch his own successful venture.
The Debt-Free Movement:
Deacon Hayes, near the cusp between millennials and Generation X, did not grow up in a family that discussed money. Debt was a way of life, and Hayes followed in his mother’s footsteps, accumulating credit card debt and taking out loans. However, a financial reckoning during the 2008 downturn led Hayes to adopt a new philosophy. He joined the Financial Independence, Retire Early (FIRE) movement and embraced a cash-only approach. Hayes and his wife now pay for vacations and cars in cash and prioritize investments that appreciate in value. His journey toward financial independence led him to found the Well Kept Wallet website and write a book titled You Can Retire Early!
Conclusion:
The rise of financial conversations within families, particularly among millennials, marks a significant shift in attitudes towards money management. Millennials, who grew up in households that discussed money, are more likely to be financially literate and make informed decisions. This generational change can be attributed to boomers’ desire to ensure their children are well-prepared to manage their inheritance. The impact of these discussions is evident as millennials like Burrell, Lewis, Long, and Hayes forge their own successful paths in finance and entrepreneurship. As the largest transfer of wealth in American history approaches, the lessons learned from these financial conversations will shape the future of finance for generations to come.
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