From boomers to zoomers, every generation has its unique financial habit. Accordingly, this habit encapsulates various components, starting from lifestyle, savings, to investment.
The importance to understand every generation financial habit is greatly significant for many parties such as investment consultants, businesses, and the people themselves. Accordingly, Guy Fletcher, the head of client solutions and research at Sanlam Investments, explains its gravity.
“Understanding the generational personalities could be a way to glean insight into ourselves and overcome innate biases. It’s also a way for financial services professionals to offer more relevant and customized advice that’s 100% focused on advancing our clients’ well-being,” he said.
Given that each generation specializes in its own financial habit, numerous factors actually affect the establishment. Parenting styles, economic situation, and trends are among its factors.
Therefore, to gain understanding about how each generation financial habit is, the sections below will briefly encompass it.
Also Read: Millennial Generation Investment Habits
Baby Boomers
Experiencing a hard economic situation while they were kids, boomers’ financial habit is more likely about savings and investing for the retirement age. Also, their parents’ frugal lifestyle also drives them to be more frugal or, at least, less consumptive.
Accordingly, boomers attempt to, at any cost, avoid what happened in their past to happen again in the future. A Sanlam survey reported that boomers mostly focus on savings, growing their wealth, property investment, and leaving a legacy. Ok boomer.
Generation X
Generation X is a sandwich generation which is responsible for supporting both their parents and children. This is so for generation X was born in a developing age, when the world was massively developing its economy after World War II and pioneering the globalization.
For that reason, generation X is famous for having multiple jobs and being hardworkers. Despite everything, they are very cautious about their retirement savings, making them having multiple thoughts before spending money.
Millennial
Labelled as spoiled and entitled, millennials are arguably the one generation that experiences the most difficult financial situation. Despite having lower incomes than their predecessors, millennials are considerably not frugal in using money, TD Ameritrade survey indicated.
However, the same survey also pointed out that millennials are, most of the time, simply following the financial habits of their parents. Also, millennials are more present-oriented, meaning that they will be more likely to follow their heart’s content and make decisions by judging values and impacts.
Gen Z
Gen Z, or zoomers, is the arguably most ideal generation in financial habit. Identical to millennials, gen Z loves to follow their heart’s content and judge values and impacts prior to choosing options.
However, unlike millennials, gen Z is more cautious and interested in their future financial planning. Gen Z’s curiosity enables them to learn more about financial literacy although their understanding is still far from expectation, EverFi reported. Moreover, being a digital native exposes gen Z to various possibilities in the upcoming, happening Industry 4.0.
