A new generation embraces open conversations about money and financial literacy
In the Cleaver era, talking about money was considered taboo. Parents shielded their children from discussions about finances, leaving them ill-prepared for the challenges of managing money in adulthood. However, times have changed, and subsequent generations have grown up in households where financial lessons were a regular part of the conversation. A recent survey by Forbes Advisor reveals that nearly three-quarters of millennials grew up in families that talked openly about money, compared to only 41% of boomers. This shift in attitudes towards financial education has had a profound impact on the way millennials approach money management and has set the stage for a more financially literate generation.
The Rise of Financial Conversations in Millennial Households
Growing up in a household that resembled a CNBC newsroom, Courtney Burrell, a millennial from Colorado, credits her parents for inspiring her career in finance. From an early age, she was exposed to discussions about stock picks, savings, and retirement accounts. Burrell’s experience is not unique. The Forbes Advisor survey found that millennials were the most likely to have grown up in families that openly discussed money, with 73% reporting such conversations. This contrasts with boomers, who were the least likely to have had these discussions.
Learning Financial Literacy from an Early Age
According to a survey by Northwestern Mutual, 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. Chad Lewis, a millennial and private wealth adviser, recalls talking with his parents about money since middle school. They discussed topics like credit cards, credit scores, and the importance of paying off balances monthly. Lewis’s parents even opened a credit card in his name, teaching him responsible credit card usage and helping him build a strong credit score.
The Influence of Boomer Parents
Some experts believe that boomers championed financial education for their millennial children precisely because they received so little guidance from their own parents. Boomers grew up in households headed by members of the Greatest Generation and Silent Generation, who rarely discussed money. Mauro Guillén, a professor at the Wharton School, suggests that the stark contrast between the experiences of these generations motivated boomers to ensure their children were educated about money matters. With boomers set to pass on nearly $80 trillion in assets to their millennial children, they have a vested interest in ensuring their heirs are financially literate.
Instilling Financial Responsibility and Living Within Means
Trent Long, a millennial from Florida, 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 one’s means and saving money from an early age. Long held his first job at 14 and was taught to set aside savings from every paycheck. This upbringing instilled in him a sense of financial responsibility and a desire to understand how to manage money effectively. Long went on to co-found an app called BUNKR, which focuses on securely storing and sharing important information with trusted individuals.
The Alternative Path to Financial Literacy
While the majority of millennials learned about money from their parents, there are exceptions. Deacon Hayes, who sits on the cusp between millennials and Generation X, grew up in a single-parent household where money was rarely discussed. Debt was a way of life, and Hayes followed in his mother’s footsteps, accumulating credit card debt, financing a car, and taking out student loans. However, facing a financial reckoning during the 2008 downturn, Hayes adopted a new approach to money management. He joined the Financial Independence, Retire Early (FIRE) movement and embraced the philosophy of only spending what he could afford in cash. Hayes now runs a successful finance website and has written a book on early retirement.
Conclusion:
The taboo surrounding conversations about money has gradually faded, with millennials leading the charge in embracing financial education. Growing up in households where money was discussed openly, millennials have gained a solid foundation in financial literacy. As boomers prepare to pass on their wealth to the next generation, they have made it a priority to ensure their children are well-equipped to handle their financial futures. The shift towards open conversations about money has set the stage for a more financially literate society, with millennials leading the way in breaking the money taboo.
Leave a Reply