30% of younger generations worry about finances, study finds
Almost 7 in 10 young adults agree their employer should provide services that address financial stress.
Finances are top of mind for many Americans when taxes are due. Because it also is National Financial Literacy Month, this is a great time to talk about money with younger generations.
LIMRA, a trade association supporting the insurance and financial services industries, defines financial literacy as “understanding financial concepts and products to make wise decisions with one’s money.” Being financially literate can lead to feeling more financially secure and able to withstand life’s unexpected expenses.
Ideally, financial literacy should begin at home, the association said in a new report. About 8 in 10 Gen Z and millennial adults say their parents discussed finances with them while they were growing up, according to LIMRA research. Younger adults are more confident in their understanding of financial matters than older generations. However, they also feel less confident about their financial security for a number of reasons:
- Data from the 2024 Insurance Barometer Study shows that young adults report higher levels of financial concern than older generations about paying for medical expenses, supporting themselves if they are unable to work and paying monthly bills.
- More are reaching major life milestones such as marriage, children or home ownership much later in life than their parents did. These life events often jumpstart the purchase of financial products such as life insurance.
- The average cost of higher education has more than doubled over the past two decades, according to the Bureau of Labor Statistics.
- Home prices nearly doubled over the past 20 years as well. The Federal Reserve Bank of St. Louis reports that the median home sales prices in the fourth quarter of 2023 reached $417,700.
“Young adults would, therefore, benefit greatly from additional financial knowledge to help them successfully navigate the additional financial challenges they face,” according to LIMRA. “Two ways to help young people navigate today’s financial landscape are through workplace benefits and financial professionals.”
More than 30% of Gen Z and millennials say their personal financial worries have been a distraction at work. More financial education can help workers address their financial challenges, reduce stress and improve focus and productivity. Almost 7 in 10 young adults agree their employer should provide services that address financial stress. Additionally, around two-thirds of Gen Z and millennial workers agree their employers should offer financial education to employees.
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Financial advisors can help young adults build healthy money management habits such as budgeting, saving for retirement or funding an emergency savings account, while also demonstrating how products such as life and disability insurance offer protection against the unexpected.
“This month is a great opportunity for the industry to help improve consumers’ financial knowledge and encourage them to take steps to build toward a secure financial future,” the LIMRA report concluded. “The best time to learn financial literacy was yesterday; the next best time is today.”