Young adults financial planning interests (Millennials, X gen, Z gen)

Financial literacy, wages, inflation, and economic instability have affected all generations differently. Some patterns stick from one generation to the next, but young adults financial planning interests vary based on your life stage.

If you could go back in time, wouldn’t you want your adolescent self to stick their allowance in stocks? Instead of buying more stuff that will be discarded after six months?

There is a tremendous opportunity for financial advisors. They’ll get to guide the next set of generations through the incredible wealth transfer that will be taking place. While young adults may not have the hindsight, you have the wisdom to help them make informed, strategic choices.

More important than any study or report is direct communication with your clients or clients’ children. Learning about young adults financial planning interests  is crucial for maintaining a life-long relationship with wealth building. So, what exactly are young adults interested in these days? Read on to get inspired for your next conversation. 

Generation X’s young adults financial planning interests

Generation X represents those born between 1965-1980, translating to 42-57 years old.  This group is filled with many parents, young grandparents, and children. Some of them who are now beginning a big transition – caring for their parents too. According to Forbes, this generation is financially stressed. 

Financial circumstances

The pandemic proved to be particularly difficult for Gen Xers, who were more likely to be laid off. They’ve also incurred more debt than their parents. This range from credit cards, student loans, mortgages, and car loans that go up to $125,000. The national average showcases an $87,438 debt load per person. On the other side, millennials have an average of $52,120. 

Financial planning goals and fears of young adults

Generation X has financial goals similar to their parents but different in the approach. One desired lifestyle is paying down debt, retiring, and having enough to care for aging parents. Plus, maybe going on vacation twice a year. But the average investor is not so average. 

Financial habits, life experience, and health concerns can shape investors’ perspectives. The most important thing you can do is listen to their fears, goals, and interests to make a plan for them. 

An affluent family may have different views on retirement. Some may expect an inheritance to carry them through. And in the meantime build a real estate empire with any cash on hand. Others could be spending every penny they earn, with fear they won’t be able to outlast their inheritance. 

Generation X has seen financial hardship and economic instability. However, homeowners achieved their wealth through real estate due to rising prices. And still, they’re in fear of uncertainty. At this stage, you should approach taking care of your client’s young adults financial planning with options. For example, let them choose what they can control. And paint the picture of what their future can look like with wise money management. 

Millenials’ young adults financial planning interests

26-year-olds don’t love being compared to 41-year-old millennials. Tech, world events, and economic stability have shaped this generation born between 1981-1996. Millennials have a terrible stigma attached to their habits, including financial ones. However, they’ve taken an interest in investing long before Generation X did. 31% started investing by age 21. That’s a low number compared to only 14% of Gen X and 9% of baby boomers. 

Financial circumstances

Millennials are more tuned into financial conversations, but they navigate a challenging world. They have many significant milestones on their minds. For example, weddings, starting a family, building a fulfilling career, and buying a home. These are all still big goals millennials want to hit, but some fear it’s out of reach. 

25% of millennials have $100,000 or more in savings and plan to continue growing their wealth. The other 75% struggle with volatile stocks, a great recession, pandemic, and an ever-increasing wage gap. 33% of millennials are less confident about retirement after COVID-19. 

Financial goals and fears

One thing we can say, is that mllennials behave differently with money than their parents. Owning a home and settling down are still on their minds, but studies show they’re staying at home longer. Since 1960, the percentage of young millennials married and living independently dropped by 50%. The average age increased to 30 in 2010, compared to 23 in the 1970s. 

Millennials prefer experiences instead of “stuff.” They’ll dedicate more time and money to wellness and lifestyle maintenance. But most importantly, they’ll receive the most significant wealth transfer in history over the next few decades. What they need from an advisor is information. Millennials want their investment information readily available. Same as one-click access to online banking, they’ll also want this for their investment accounts.

With a huge amount of online noise, you want to be the filter that helps reach their financial goals. Be easily and readily available to answer their questions before they go looking elsewhere.

Remember never to assume all millennial young adults’ financial planning will be the same. The won’t all have the same financial interests of their generation. Ask plenty of questions to get to know the goals of your millennial client. And don’t forget to collaborate on their financial strategy together. 

Generation Z’s young adults financial planning interests

Financial circumstances

Generation Z isn’t where you should focus your marketing tactics full-time. However, beginning to build a relationship with them is vital. Born between 1997-2012, Gen Zers range from 10-to 25 years old. 

Before covid pandemic, an independent study predicted that Gen Z’s spending power was as high as $143 billion. That’s the kind of financial clout that makes companies sit up and take notice. But when it came to job security, the pandemic wiped out most entry-level occupations for this generation. Leaving out there a fierce competition for unfilled positions.

Because of all these uncertainties, 72% of Generation Z is stressed about their finances. 51% of them afraid they won’t be able to do what they want in their life due to financial shortcomings. 

Financial goals and fears

Gen Zers are savvier with their finances, taking saving seriously. However, the majority of them have reported having accumulated debt of $14,100. The most common is credit cards and the second as student loans. 

This generation is afraid they don’t have enough financial literacy to navigate investing. And one-in-three are embarrassed about how much debt they’ve accumulated. Most of them regret dining out, delivery services and purchasing luxury items. 

In 2020, the world witnessed the Coronavirus Crisis with it huge economic difficulties. Despite this, it was a year full of paradoxes. Despite the high unemployment rate people were able to save more money than ever. In this scenario, generation Z were pushed to think long-term and begin planning for retirement. This generation is more anxious about their financial future than ever before. These young adults’ financial planning is based on automated savings. Also, investing capabilities in money management programmes have gained in popularity in the past year.

Gen Z is expected to be the most diverse and well-educated generation in history. Their expectations can be a source of inspiration for forward-thinking businesses who want to meet young adults’ financial planning interests while still growing financially during the COVID recession. Generation Z has a lot to teach us. They are concerned about the environment, social minorities, and the future’s viability. They push businesses and financial institutions to be more creative and socially conscious. 

Financial advisors are still waiting to see how this shifting reality will influence Gen Z young adults’ financial planning interests in the long run. What we can do as financial advisors is to concentrate on what we know about them now. That way, we can help them design their financial future, instead of making decisions by default. 

Final thoughts

When it comes to affluent clients’ young adults financial planning, their goals and concerns will often be aligned with their generation. A survey with over 1400 respondents valued retirement, living comfortably, and feeling financially secure. However, less than half of these young adults felt confident about making investing decisions. 

It’s critical to develop a relationship with your clients’ adult children, regardless of how you go about it. Your current clients—the parents—are anxious about their children’s future. And their children will be the primary beneficiaries of their money. Starting the money discussion with children helps you address the goals and fears of your current customers. It also assures a seamless wealth transfer, and establishes you as the family’s principal wealth manager.

Do you need help perfecting your plan to help the next generation build their wealth? Contact us to find the right coaching program that works for you.