Different generations, different attitudes toward money


Texting versus email (or even snail mail). Angry Birds versus Monopoly. “The Theory of Everything” versus “The Sound of Music.” “Dancing with the Stars” versus “American Bandstand.”

It’s no secret that there are a lot of differences between baby boomers, born between 1946 and 1964, and millennials, who were born after 1980 (though there is disagreement over the first birth year for the millennials). But when it comes to finances, you might be surprised by the differences between the generations. See if you can guess which generation made the following statements:

Boomer or millennial?

1) I have enough money to lead the life I want, or believe I will in the future.

2) My high school degree has increased my potential earning power.

3) I rely on my checking account to pay for day-to-day purchases.

4) I consider myself a conservative investor.

5) Generally speaking, most people can be trusted.

6) I’m worried that I won’t be able to pay off the debts that I owe.

The answers

1) Millennials. According to a 2014 survey by the Pew Research Center, millennials were more optimistic about their finances than any other generational cohort, including baby boomers. Roughly 85 percent of millennials said they either currently had enough to meet their financial needs or expected to be able to live the lives they want in the future; that’s substantially higher than the 60 percent of boomers who said the same thing. Although a higher percentage of boomers - 45 percent - said they currently have enough to meet their needs, only 32 percent of millennials felt they had enough money right now, but another 53 percent were hopeful about their financial futures. (“Millennials in Adulthood,” Pew Research Center, 2014.)

2) Boomers. The value of a high school diploma in providing an income has dropped since the boomers’ last senior prom, while a college education has never been more valuable. In 1979, the typical high school graduate’s earnings were 77 percent of a college graduate’s; in 2013, millennials with a high school diploma earned only 62 percent of what a college graduate did. And 22 percent of millennials with only a high school degree were living in poverty in 2013; back in 1979, the figure for boomers with a high school degree was 7 percent. (“The Rising Cost of Not Going to College,” Pew Research Center, 2014.)

3) Boomers. Not surprisingly, millennials are far more likely than boomers to use alternative payment methods for day-to-day expenses. A study by the FINRA Investor Education Foundation found that millennials are almost twice as likely as boomers to use prepaid debit cards (31 percent compared to 16 percent of boomers). They’re also more than six times as likely to use mobile payment methods such as Apple Pay or Google Wallet; 13 percent of millennials reported using mobile methods, while only 2 percent of boomers had done so. (“The Financial Capability of Young Adults – A Generational View,” FINRA Foundation Financial Capability Insights, FINRA Investor Education Foundation, 2014.)

4) Millennials. You might think that with thousands of baby boomers retiring every day, the boomers would be the cautious ones. But in one survey of U.S. investors, only 31 percent of boomers identified themselves as conservative investors. By contrast, 43 percent of millennials described themselves as conservative when it came to investing. The survey also found that millennials outscored boomers on whether they wanted to leave money to their children (40 percent vs. 25 percent) and in wanting to improve their understanding of investing (44 percent vs. 38 percent). (Accenture, “Generation D: An Emerging and Important Investor Segment,” 2013.)

5) Boomers. Millennials may have been around the track fewer times than boomers have, but their experiences seem to have given them a more jaundiced view of human nature. In the Pew Research “Millennials in Adulthood” survey, only 19 percent of millennials said most people can be trusted; with boomers, that percentage was 31 percent. However, millennials were slightly more upbeat about the future of the country; 49 percent of millennials said the country’s best years lie ahead, while only 44 percent of boomers agreed.

6) Millennials. However, the difference between the generations is not as significant as you might think. In the FINRA Foundation financial capability study, 55 percent of millennials with student loans said they were concerned about being able to pay off their debt. That’s not much higher than the 50 percent of boomers who were worried about debt repayment.

BARBARA KENERSON is first vice president/Investments at Janney Montgomery Scott LLC and can be reached at BarbaraKenerson.com.