CivicScience recently unearthed five key insights about Gen Z’s relationship with money and finances. How do their older counterparts, the Millennials, compare?
1. Most Millennials don’t expect to be wealthier than their parents.
Even more so than Gen Z, Millennials tend to be doubtful or uncertain about whether they will accrue more wealth over their lifetimes than their parents. This isn’t surprising, given that the basis of comparison for the so-called “unluckiest generation” in U.S. history is typically to Baby Boomer parents (versus Gen X parents) – and a significant wealth gap exists between these two generations. Millennial outlook has dropped off steeply since results were last gathered in 2021, when 36% felt they would be wealthier than their parents. Today, fewer (28%) believe that level of wealth is within reach or are skeptical (24%), but a higher percentage (38%) clock in as a solid “no” compared to last year.
However, Millennials are actually more likely to say they are financially better off today than before the pandemic started compared to Baby Boomers or Gen Xers, although a comparatively high percentage also say they they are worse off. Survey data suggest that Gen Z adults may have fared the best overall (in terms of personal financial assessment) over the course of the pandemic.
2. The majority of Millennials have made investments.
A quick look at investments by generation shows that 75% of Millennials have one or more investments. More than a third hold retirement funds and savings accounts, while around a quarter are invested in stocks & bonds and mutual funds or other types of funds. Millennials are similar to Gen Z adults when it comes to cryptocurrency, real estate, and gold/silver, but are more invested in the stock market and retirement, as to be expected. Interestingly, Gen Zers are more likely to report having savings accounts and a greater percentage of investment in general compared to Millennials.
3. Interest in financial advisors pales in comparison for Millennials.
Making big financial decisions is never easy. Despite the age gap, Millennials are not as likely as Gen Z adults to have sought out using a financial advisor. An equal percentage (18%) say they currently use one; however just 19% of Millennials have used a financial advisor in the past, compared to 24% of Gen Z adults. Interest/intent is also much lower among Millennials than their younger counterparts – more than 1-in-3 have never used a financial advisor and don’t plan to, compared to 1-in-4 Gen Zers.
Both of these younger generations are less likely to currently work with a financial advisor than the Gen Pop, and money itself could be the reason why. When asked why they do not use a financial advisor, both Millennials and Gen Zers are the most likely to cite the cost of services. Notably, Millennials are nearly twice as likely as Gen Zers to say they don’t have enough money to invest, keeping them from using a financial advisor. They are also more likely to feel they don’t need financial advising services. On the other hand, Gen Zers are somewhat less likely to trust financial advisors than Millennials. They are also significantly less certain how to go about finding financial advising services.
4. Many think they manage their money well.
When asked to rate how well they manage their money, just under half (48%) of Millennials feel that they manage their money well. Only 20% feel they manage their money poorly. Millennials are slightly more likely than Gen Zers to have a positive view of their money managing abilities, although both younger generations are overall less likely than the Gen Pop average to feel confident in this area.
5. Where do Millennials turn for financial advice?
While the majority of Millennials say they seek financial advice from one of the sources listed in the survey question below, they are actually less likely to do so than their younger Gen Z counterparts. The two generations rank similarly in terms of where they turn first for financial advice, with friends and family ranking as the top resource for both. A few noteworthy differences exist. Millennials are more likely to seek out advice from online resources that don’t include social media. Gen Zers are more likely to use social media as a resource, as well as their bank or a financial institution.
All in all, survey results suggest that Millennials appear to have a complex and questionable relationship with money and personal finances. Many of the generation’s habits and experiences mirror those of Gen Z, although Gen Zers seem to be more proactive about their finances, such as using a financial advisor. Facing a series of setbacks stemming in part from the Great Recession of 2008 and the rising cost of living, Millennials continue to retain a pessimistic outlook on the ability to gain wealth, which has most likely only been further damaged by the pandemic and inflation.