As millennials navigate financial milestones – like buying real estate or switching jobs – the advice of those who raised them continues to guide their decisions. Despite being so-called digital natives, many millennials continue to rely on their parents and mentors more than on online information.
Advice given by parents has a special advantage: trust. Those two people, especially, will always have their children’s best interests at heart.
What is the best way for parents to give money advice?
Look for opportunities to create conversations about topics – rather than delivering lectures.
Many financial principles prove applicable across generations – like the power of compounding interest. That is an eternal truth that remains true today. Time is your biggest ally when it comes to investing.
But there are differences between millennials – often defined as those born between 1980 and 2000 – and other generations.
When people began their businesses a few decades ago, they had to go to a financial adviser to get any information. But now, with the proliferation of online data and advice, the opposite problem exists – too much information. People often have trouble turning that information into knowledge.
Technology has also opened up new ways of saving and investing such as through financial apps.
Besides having to deal with an abundance of technology and data, millennials also face different economic challenges than the baby boomers before them.
A 2017 Credit Suisse study found that millennials face tougher borrowing rules, rising home prices and lower income mobility than their parents’ generation.
These concerns are reflected in the topics on which millennials seek advice. The most popular subject was saving, with 72 per cent discussing it with their parents, followed by budgeting at 59 per cent, according to the Instamotor survey. Half had discussed debt with their parents.
Millennials are twice as likely as the overall investor population to target social or environmental goals while making investments, according to a 2017 report by the Institute for Sustainable Investing.
Experienced mentors can fill the void when parents are not available. –REUTERS