Do you sometimes feel like when it comes to money, you and your children speak a different language?
As part of GenX, I know that my generation grew up in a world of economic uncertainty, learning to be cautious about spending, saving, and debt. Meanwhile, my children are coming of age in a time of rapid technological change, different career opportunities, and new attitudes toward money.
This can make communicating about money difficult – but necessary. According to Investopedia, “Nearly four in ten (37%) parents of all generations worry their children will need financial assistance well into adulthood, a recent survey by U.S. Bank found. Those concerns run higher for Gen X parents, typically those born between 1965 and 1980, with more than half (53%) fearing that their kids would rely on them for money.”
That’s not what I want to experience in retirement.
So, let’s look at the differences in the two generations…and how we can bridge the communication gap.
How GenX Parents View Money
GenX grew up during a time when financial security was often uncertain. The stock market crashes of the early 2000s, the Great Recession, and shifting job markets taught many in your generation to value stability. As a result:
- Saving for a rainy day is a top priority. You probably feel that having a financial cushion is essential.
- Debt avoidance has been ingrained. Whether it's student loans, credit card debt, or mortgages, GenX tends to view debt with caution.
- Long-term planning is important. You may focus heavily on retirement savings, health care costs, and homeownership, knowing that these are critical pieces of your financial puzzle.
How Young Adults Think About Money
Your children are growing up in a very different world. They may see money not as something to hoard but as a tool to experience life and make the most of opportunities. Consider these aspects of their financial outlook:
- Experience over assets: Young adults often prioritize spending on experiences—like travel, dining out, and entertainment—over material possessions or long-term investments.
- Comfort with debt: From student loans to buy-now-pay-later services, debt might not seem as daunting to them. They often see it as part of the equation, not something to avoid at all costs.
- Entrepreneurial mindset: The gig economy, start-up culture, and side hustles have opened doors for younger generations to earn money in unconventional ways. Flexibility and adaptability are key, rather than a straight-line career path.
Bridging the Gap: How to Talk to Your Kids About Money
The key to having meaningful conversations about finances with your children is to understand their perspective while also sharing the wisdom you’ve gained over the years. Here’s how you can approach these talks:
Lead with curiosity: Start by asking them how they view money. What are their financial goals? What are their biggest challenges? By listening first, you create an open dialogue and show them you’re not just there to lecture but to support them.
Share your experiences: Explain why you prioritize certain financial habits, like saving for emergencies or being careful with debt. Tell stories about lessons you've learned over the years and how they’ve shaped your thinking.
Find common ground: While your financial priorities might differ, there are always points of agreement. You both likely care about financial independence, even if you have different approaches. Emphasize that there’s more than one way to build a solid financial future.
Creating Healthy Financial Habits
It’s never too late—or too early—to foster healthy financial habits in your children. By focusing on good practices now, you can help them develop a sound foundation for the future.
- Encourage budgeting: Whether they use an app or a simple spreadsheet, show them how budgeting helps track spending and prioritize savings.
- Discuss the importance of saving: Help them set up an emergency fund and talk about why it’s critical to have money for unexpected expenses.
- Teach the power of compound interest: Show them the long-term benefits of investing early, even in small amounts, and how compound interest can significantly grow their savings over time.
- Support responsible credit use: Teach your kids about managing debt wisely, using credit responsibly, and avoiding high-interest loans.
Talking about money is never easy and in generations past, has been a rather taboo topic.
This is our opportunity to open communication so that future generations are more comfortable talking about finances – the good, the bad, and the ugly. A great way to lead by example is to invite your adult child into conversations you’re having with your own financial advisor. No, your kids don’t need to know all your business, but showing them that there are resources to help fund the fun stuff and save for the future is a great way to lead by example.
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