Financial planning clients tend to fit a specific demographic – they’re usually retired or approaching retirement or thinking about financial independence. A few younger people (and I mean those in their 30s and 40s) might want a financial planner to help them make decisions about company stock, the sale of a business, or proceeds from an inheritance. But lately I was curious to know how young adults think about money. So I decided to ask one.

My daughter completed her bachelor’s degree last year, and she recently turned 23. She has settled for the time being near her college in St. Louis, Missouri, but she has aspirations to move to a bigger city like Chicago. With a degree in the arts, she had no expectations (or interest) in a corporate career, but she did land a full-time job in theatre education right out of college.

A lot of people in my generation wonder how young adults are navigating their personal economies. We can look back at our own experiences as we were just starting out, but we need to acknowledge that the world has changed quite a bit. Our opportunities and struggles were very different, and the future looks different in the eyes of a young adult. Of course, a number of factors determine how each individual sees their current situation. If we try and understand these perspectives, we may also understand how Gen Z sees their life, their jobs, and their future. Here are some of the things I learned by talking to my daughter:

Things are different, and they know it. Young adults have a lot of feelings about Boomers. They find themselves living in a world shaped by their parents’ generation and dealing with their legacy. They’re expected to contend with big issues like climate change, inequity, housing shortages, and a post-pandemic world. This is the context in which they think about their goals and their future. Doing better than their elders can mean something very different from accumulating material goods.

Work is more than a job that pays. The recently-graduated young adults that my daughter surrounds herself with want more than a paycheck and benefits. Gen Z is looking for jobs that allow them to impact the world or help others in their community. Or they may take a job that pays them enough to cover the bills so they can work on their art or their passion.

Self-sufficiency is out. Mutual aid is in. My daughter really wanted me to get this point. “You Boomers,” she said. (I know, it’s still hard to hear that). “You were all about self-sufficiency and the nuclear family. As long as you were doing well, that’s all that mattered.” Mutual aid among young adults manifests in a number of ways, from sharing meals and rides to recycling used furniture and clothing. She also said that young adults are fine about discussing salaries or the cost of rent, hoping their openness can break down barriers and help others succeed. 

Conscious self-promotion is a must. My parents graduated from college expecting to hold a job for a lifetime. I spent the bulk of my career as a serial salary-worker, climbing the corporate ladder with moves every five to ten years. Gen Z knows that the best way for them to reach their goals is to continuously promote themselves. And, of course, they have the technology to do it, whether that’s social media, podcasts, or a side gig as an influencer. 

Parents, we’re not being ignored. I was flattered when my daughter told me she’d learned prudent financial habits from me. She learned many lessons through storytelling – sharing what I’d learned through experience and observation. “I remember when you told me about the credit card companies at college orientation pushing credit on new freshmen,” she told me. This made her cautious about credit. But she also mentioned friends who were deeply impacted by watching their parents during the 2008 financial crisis – some made desperate decisions, others made more prudent ones.

If you’ve got young adults in your life, remember that how they think about their money is highly personal. Their lives, dreams, and expectations are likely to be very different from yours. Give them autonomy to make their own decisions – and forgive their mistakes even if that may require the occasional bailout. Remember that they’ll be open to your guidance as long as it’s given without judgement. A wise place to start is by listening. Let them educate you first.

Some things to think about if you’ve got young adults in your life:

• Young adults are looking for honesty, not a lecture. Don’t be afraid to share stories about things you’ve learned the hard way.
• Don’t feel bad if you’re still helping pay some bills for your adult kids. Many families are in the same situation, trying to get their kids started on a firm footing.
• While few people in their 20s are thinking about retirement, if you know one who has just landed a new job, remind them to participate in any retirement plan or 401k that’s offered, especially if it includes matching contributions.
• While they’re just starting out in their earning potential, Roth IRAs are a great way to start saving with tax-free growth.
• Talk to your financial planner about tax-advantaged options for passing money on to your kids and grandkids.

Please contact us at 206.217.2583 or info@arrivity.com if we can assist you or someone you know with financial planning.

The foregoing content reflects the opinions of Liz Behlke and is subject to change at any time without notice. Content provided herein is for informational purposes only and should not be used or construed as investment advice or a recommendation regarding the purchase or sale of any security. There is no guarantee that the statements, opinions or forecasts provided herein will prove to be correct. Past performance may not be indicative of future results. Indices are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses which would reduce returns Securities investing involves risk, including the potential for loss of principal. There is no assurance that any investment plan or strategy will be successful.