Most millennials and members of Generation Z grew up hearing about traditional financial priorities: graduating college, getting a good job, buying a house, having children, and saving for retirement. But this cookie-cutter plan isn’t necessarily right for everyone, especially in the current economic climate.
If you feel like the conventional financial advice that defined older generations isn’t very relevant for you, you’re not alone. It’s a common feeling, especially for millennials (Gen Y) and Gen Zers. And while there are plenty of financial advisors who believe it’s still best to stick with those traditional priorities, you’re not going to hear that from us.
Here at Guiding Wealth, we know that the world just isn’t the same as it was decades ago. You can’t afford college on a summer job, and you can’t count on receiving a generous pension just because you stick with the same company for 40 years.
With multiple recessions, record-setting inflation, extremely high student debt, and a rapidly changing job market, today’s world isn’t one where traditional advice is always applicable. It might not be reasonable to save for a 20% down payment or build up a six-month emergency fund, especially when you’re just starting out.
You’re dealing with a challenging market, but that doesn’t mean you can’t pursue financial goals. It just means you need to determine which ones matter to you and focus on those — even if your values don’t align perfectly with those of your parents or grandparents. And if you do share the same vision as older generations, that’s great, too! The most important thing is prioritizing the goals that matter most to you and your family.
Modern vs. Traditional Financial Priorities
Most “conventional” financial advice centers on the priorities that defined previous generations: homeownership, job stability, child-rearing, and retirement. And there are many millennials and Gen Zers who still want all of those things.
But there’s also a growing number of younger people who want (or need) to spend their hard-earned money on different things. Maybe you’d rather travel instead of owning a house. Or you might want to quit the job you got out of college and start your own company.
Maybe saving for retirement just isn’t a financial possibility right now. Perhaps you and your partner are child-free. Whatever the case is, there’s a good chance that some part of your money management style represents radically different priorities than your parents had.
A New Outlook on Spending and Saving
According to a survey conducted by Experian in 2023, saving for retirement isn’t a high priority for the majority of millennials and Gen Zers. Instead, they prefer to spend more in various other categories.
And it’s not all fancy coffee and avocado toast — U.S. News reports that millennials are mostly spending in these areas:
- Convenience services
- Food away from home
- Streaming services
- Travel and experiences
Interestingly, they also spend more than older individuals on social impact (e.g. supporting charitable causes or brands that match their values) and debt repayment (particularly student debt).
CNBC reports similar statistics for millennials and Gen Zers. Members of both generations list paying off debt and growing savings as two of their top financial goals.
According to a survey by Bank of America, Gen Zers list these as their biggest barriers to financial success:
- High cost of living
- Debt payments
- Unexpected financial setbacks
- Economic outlook
Despite these challenges, over half (52%) of Gen Zers say they’re on track to meet their financial goals.
Permission to Enjoy Life
Unfortunately, these modern financial priorities cause many younger people to feel guilt, stress, and/or shame. According to Bankrate, younger people are more likely to experience increased stress about financial regrets than older people. While 60% of Gen Zers and 57% of millennials say their stress about financial regrets has increased, only 38% of baby boomers say the same.
There are some financial experts who recommend conventional financial priorities (e.g. being debt-free) to every person regardless of age or personal circumstances. But at Guiding Wealth, we have a different approach – we think all financial priorities are valid.
We don’t think you need to feel guilty about not owning a home or not saving 20% of your paycheck. You don’t need to regret having your groceries delivered or taking a week off of work to rest and recharge.
Money is important, but it isn’t life. The most important part of building a good relationship with money is figuring out what your priorities are, and then enjoying them guilt-free.
So if you want to see the world, travel! Have children, or don’t have children. Find a job you love, even if isn’t what you studied in college. Enjoy good food, take time off from work, pursue your hobbies — whatever makes your life easier. Save money for your children’s college or your parents’ long-term care, if that’s what matters more to you. It’s so much easier to make financial plans and stick to them when those plans match your values.
Follow Your Financial Priorities
Traditional financial priorities have value, but so do their modern counterparts. In some ways, it’s easier to measure “financial success” based on whether you’ve ticked those old boxes: bought a house, saved for retirement, or become debt-free.
But those aren’t the only benchmarks – your financial measuring stick should be something that’s meaningful to you. So take some time to figure out your values, and make financial decisions that align with those priorities.
Ready to make a plan to reach your big financial goals but not sure where to start? We can help! Our Big Dreams Calculator helps you figure out exactly what you need to do to make your financial dreams a reality. Whether you want to save for a car, expand your family, or pursue a different financial goal, this calculator can help you get there. Download your Big Dreams Calculator today!
