Personal finance is a highly individualised experience. No one knows more about your financial goals, resources, and habits than you do, so you’ll always be the leading authority on individual financial matters. However, as personal as money management is for each individual, members of the same generation sometimes share similar finance tendencies and attitudes toward money. When members of different age groups’ points of view are examined, it highlights the distinct ways each generation thinks about money.
Common Financial Ground For British Contemporaries
Whether you’re talking about fashion, dance moves, or investment strategies, each generation leaves a distinct legacy. Individualism aside, generational trends are easy to spot. To understand the forces driving different age groups in the current economic climate, it’s important to distinguish who represents each class.
Baby Boomers are generally thought to be found in the 58-72 year-old age bracket. The subsequent generation, commonly known as Generation X, spans births occurring from 1961-1989, so Generation Exer’s are around 29 to 57 years old. Millennials, one of the most distinct groups, when it comes to financial priorities, were born in the 1990’s. The group’s experience stands-out among other generations, due to the rapid technological and societal advancements experienced during millennials’ lifetimes.
A recent Sanlam survey helped researchers understand how baby boomers, members of Generation X, and millennials differ concerning financial issues and practices. The group polled more than three hundred members of these generations, exploring their feelings about money and its relationship with other aspects of their lives. Although it was a regional study, the results reflect some of the same sentiments shared by consumers in other countries.
When it comes to earning a living, success and a hard-working approach were both important to members of all three generations. Interestingly, however, the two concepts’ rankings were juxtaposed between millennials and members of Generation X. While the pursuit of success ranked highest among millennials, survey participants from Generation X identified hard work as the most important value driving their professional pursuits. Undertaking a meaningful career, with purpose, was important to all three of the groups surveyed. Balancing financial concerns with other parts of their lives was a closely held value for both baby boomers and millennials, but it did not rank as highly for Generation X survey respondents.
Millennials Set Their Own Pace
Finance has looked about the same for many years. Owning a house, getting an education, and devoting oneself to career obligations have always been top priorities. Financial environments have changed, however, so millennials face a different set of challenges than their parents and grandparents did. As a result, young people’s approach to these core financial values is also dissimilar to prior generations’.
If owning a house was ever an expectation, rather than a luxury, it’s hard to take ownership for granted in the current economic climate. Young people are employed, but stepping on the property ladder is complicated by high prices, lack of affordable units, and credit challenges. Whether it is a symptom of difficult access for first-time buyers or a result of millennials’ unconventional attitude about their finances, owning a house is not a top priority for members of the younger generation. To make matters worse, many are strapped with student debt and insufficient resources to wipe student loan balances.
Millennials value work/life balance and leisure pursuits, so you’re more likely to find members of the generation arranging financing, than missing holidays because they’re skint. With strong employment numbers on their side, even young bad-credit applicants have access to short-term funding opportunities. The way members of each generation spend the money may be very different, but these rapidly funded loans are available to baby boomers and Gen X, as well as millennial borrowers.
Although millennials may make financial mistakes, like young members of any generation, they are charting new ground, compared to their parents and grandparents. Their unique approach to money and sometimes unorthodox financial values are perfect examples of the generational differences influencing financial outcomes for Britons of all ages. As each age group clings to its own collective financial sensibilities, the philosophical gap between baby boomers and millennials could grow wider.