New research highlights generational differences when it comes to discussing finances
DES MOINES, Iowa–(BUSINESS WIRE)– It’s no secret that parents and kids often don’t speak the same language, and new research from Principal® proves that rings true when it comes to money and personal finance, as well. ”A new look at investing and finances across generations,” is the latest paper in a series of research and analysis focused on decoding how different generations invest, spend and talk money.
“Teaching our kids smart financial habits is important, especially when they’re entering adulthood,” said Tim Hill, executive director, Principal Global Investors. “Our research focused on decoding some of those language barriers when it comes to talking about money in the family – beginning with just starting a conversation.”
Millennials are ready
Just starting that conversation may be easier than parents think. A survey of U.S. adults between the ages of 25 and 70 found that millennials (roughly 18 to 36 years old) are already having more discussions about money within their families than other generations. They are twice as likely as baby boomers or Gen Xers to have discussed finances with a family member in the last week (16 percent vs. 8 percent). And millennials are more likely than any other generation to have learned basic financial knowledge (budgeting, investing/spending, paying taxes) from their parents.
So once the conversation starts, then what? That depends on the generation. At any age, most people are comfortable discussing saving, retirement planning and home purchases within the family. But the topics that are avoided likely vary by generation. Millennials or Gen Xers report dodging conversations about inheritance and long-term healthcare. Boomers tend to steer the discussion away from personal spending and saving for college.
“Understanding financial hot buttons within your family can help lead to more productive conversations,” said Hill. “We often avoid the stuff we feel unprepared for, so consider seeking help from an experienced professional to guide your family in these discussions.”
Giving some historical context
The major moments and trends that define a generation – war, scandal, cultural icons – often play a role in why generations approach financial topics differently. To read more about what defines the five generations in the workplace today – or access resources about how to start a family discussion about money – visit principal.com/generations.
This research study was led by Principal Financial Group and The Center for Generational Kinetics. The survey was administered to 1,000 U.S. adults ages 25–70 who influence household financial decisions.
The sample was weighted to the current census data for gender and region and participants were screened for U.S. citizenship. The survey was conducted online from December 16, 2015, to December 22, 2015, and has a confidence interval of +/-3.1 percent.
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Source: Principal Financial Group