Save As I Say: Financial Advice from Parents
By: Jennifer L. Douglas, Senior Research Director, Member Benefits, LIMRA and LOMA
July 2023
Most adults, especially younger adults, remember their parents giving them financial advice when they were growing up. Parents of Gen Zers and Millennials not only talked to their children about finances more often, but they were seemingly more qualified to do so: Younger adults are more confident in their parents’ — as well as their own — understanding of financial matters than are members of older generations.??
Figure 1: Parent(s) Discussed Finances While Growing Up and “Very Knowledgeable” About Finances by Generation
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The generational differences exhibited in LIMRA’s recent?U.S. Consumer Sentiment?survey likely reflect several factors, including reality. Financial conversations between parents and their children have become more prevalent over time, encouraged by cultural shifts and evolving social norms, the effects of financial literacy initiatives and the economic landscape that prompts such discussions. It’s also likely that generational differences say something about the role of memory, life experiences and a healthy dose of perspective.
It should not be lost on us that many of our younger respondents’ parents — as members of the older generations — seem less convinced of their astuteness than their children give them credit for.?Nonetheless, even when controlling for generational differences, the more often a person’s parents talked to them about finances and the more knowledgeable a person perceives their parents to be, the more confident people are in their own financial knowledge. Gen X and younger adults with these experiences and perceptions also express more confidence in the financial services industry and professionals than their counterparts do.
As it turns out, time doesn’t erode all things. When asked to share the best financial advice received from their parents, older adults demonstrated remarkable recall, with nearly 3 in 5 respondents of all ages readily recounting a tip or two that are still top of mind. Furthermore, the nature of the advice shared is very consistent...
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