It’s not often that Baby Boomers take any advice from the younger generation, let alone advice on money matters. There is a tendency of older “wiser” folk to dismiss the views of a younger generation. However, Millennials may be able to teach Boomers some valuable lessons about how to manage their money.
Experiences vs. Possessions
Instead of loading up on material goods, Millennials are more likely to spend cash on intangibles. Psychology Professor Leaf Van Boven conducted a study in which he found spending money on life experiences rather material possessions, is generally correlated with higher levels of happiness. On the other hand, the level of happiness associated with owning material possessions such as cars, appliances, and televisions, depreciates over time.
The Millennial generation has quickly adapted to services like Uber and Airbnb to replace things that at one point were considered necessities, like cars and hotel expenses. By leveraging today’s technology, you can still have access to the same, or in some cases, better experiences.Thanks to the sharing economy, people can, at a cost, rent everything from clothes to bikes through websites and apps. Plus, social networking sites like Nextdoor make it easy for people to connect with others locally and share goods like garden equipment or power tools.
There is a difference in how younger and older investors approach investing. Again, technology plays a large role here. Nowadays, a person can hop on the internet and do research, which can make Millennials (a generation far more “plugged in” than their older counterparts) more engaged in the process of saving, planning for retirement, or investing in the stock market.
There is no shortage of apps and websites devoted to money management and wealth creation. However, unlike Millennials, Boomers may be hesitant to use these resources. While Boomers may wait for someone to explain how technology is used, Millennials are willing to jump in and learn from experience.
Boomers may not be ready to take advice from 20 and 30-somethings, but those who are able to adjust to the Millennial way of thinking may find they come out financially ahead in the end.
Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. This material does not constitute an offer or recommendation to buy or sell securities and should not be considered in connection with the purchase or sale of securities.
To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law.
Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.
These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable-- we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.
David Lerner Associates does not provide tax or legal advice. The information presented here is not specific to any individual's personal circumstances. Member FINRA & SIPC.