Have you ever fallen victim to earworms? You know, those pesky songs that get stuck in your head and won’t leave? I recently overheard (1988 Grammy award-winning) “Parents Just Don’t Understand” and couldn’t shake it for days. However, somewhere around the third chorus, I realized that DJ Jazzy Jeff & The Fresh Prince were onto something. Nearly 30 years later, those rap lyrics still have relevance today.
We parents are hard-wired to help our kids navigate life’s challenges, be they in the classroom, on the athletic field or at their first job. Sometimes our advice will net an enthusiastic, “Thanks!” Other times, our children slam their bedroom door in our faces (hopefully more figuratively than literally).
Teaching the facts of life – and finance
When it comes to parental meddling, there’s one area that’s not totally taboo: finances.
I was involved in a research project that found millennials are more open about sharing information specifically on their finances, and 37% are likely to go to their parents first. But the challenge of mastering one’s finances didn’t stop there.
In fact, the age-old challenge of managing finances has very little to do with age. Learning about finances and staying on top of them is pretty much a universal challenge, the research showed. Despite varying levels of confidence, boomers, Gen Xers and millennials share the same apprehensions about choosing smart investments, preparing for retirement and structuring a portfolio.
If you’re a parent struggling with how to talk to your millennial about money, here are five super-important things to know:
1. Millennials are delaying “adulthood.” And that’s OK.
Millennials are putting off milestones – marriage, babies, home ownership – that defined adulthood for previous generations. The rites of passage that defined one generation are not always the same for the next. Try to have judgment-free conversations that focus on their personal goals and actionable ways to achieve them.
2. They’re already making smart money choices. But you can help them do better.
Surprise! Millions of millennials are saving! They recognize the importance of saving their pennies, even for that vague, way-in-the future stage of life called retirement. But with so many millennials entering the job market at the peak of the recent recession, they tend to favor cold, hard cash and stability over the vagaries of investing and risk. Don’t hesitate talking to them about developing a personal investing strategy to make their savings go further.
3. Debt weighs heavy on them.
Believe it or not, millennials’ chief source of guilt is not leaking spoiler alerts about The Walking Dead or throwing in the towel on Season 3 of House of Cards. (Hey! At least I tried.) Our research found that 25% of millennials and 24% of Gen Xers agree debt is the largest driver of financial stress. The good news is that with the right strategy, it’s possible to pay down debt and save for the future at the same time.
4. Use technology to make progress tangible and easy.
As the first digital natives, millennials depend on technology and are always connected. Introduce the millennials you love to online budgeting tools or apps that link bank accounts and credit cards to track spending and saving habits. There are also great tools and websites that that allow them to track their money in real time.
5. Trust is key. And, trust me, you have theirs!
Most importantly, millennials trust their parents, and our research confirms that they are comfortable discussing their personal finances with them. Millennials are more likely than any other generation to have learned basic financial knowledge – budgeting, investing/spending, paying taxes – from their parents. Over the years, you’ve likely had some big discussions with your children that shaped their behaviors and habits. Talking with your son or daughter about their personal finances will likely foster continued openness as your children move out of the house and grow their wealth.
Keep talking – and listening
The best news from our multi-generational research is that millennials want to talk about their personal finances and do the right thing with their money. In many cases, they will come to you first. As they work through paying off their student loans and making major life decisions, you can be their ever-supportive sounding board. And when the time is right, you may be a key resource to help them find that trusted advisor that can help them navigate their financial journey as things become more complicated.
Parents just don’t do understand.