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Older generation has vested interest in children's success
Television personality Mike Rowe has made a career out of spotlighting the honor in other people’s careers, specifically those that are dangerous and dirty, and especially those that don’t require an expensive advanced academic degree.
Financial advisor Dave Ramsey’s success stems from learning from his own mistakes, and he advises callers to take a dispassionate look at what income is likely to result from that expensive education they are about to embark on, rather than just the emotional boost that will result from obtaining a degree.
There’s a reason both these Baby Boomers, and millions like them, are concerned about the upcoming generation, including Nebraska Gov. Pete Ricketts, barely a boomer himself trying to reshape the state’s financial condition.
The company the governor’s father founded, TD Ameritrade, recently released a survey that helps explain why the older generation is worried.
About a fifth of millennials, born 1981-96, expect to be financially reliant on their parents into their 30s, while their parents say it’s “embarrassing” for their kids to expect a handout past the age of 27.
Those in Generation Z, meanwhile, born mid-1990s to mid-2000s, say they expect to be financially independent by 25.
On average, kids 15-21 expect to be on their own by 22, while their parents hope that takes place by 25.
That’s probably an optimistic outlook, considering the same survey indicates one in five Millennials say they can’t save any money, and those who do are putting away less than $200 a month.
Where does the money go?
We suspect it’s sucked into an electronic internet abyss through cellular phones, video streaming services and online games, with “paying for your own streaming service” at age 19 considered one of the first financial milestones a young person should reach.
Others, according to the young people themselves, include treating their parents to dinner, starting a full-time job, paying own phone bill and moving out at 20, filing their own taxes, buying a car and paying their own rent at 21, paying for health insurance, investing in the stock market and saving for retirement at 23, getting married and having a child at 25, and buying a home at 27.
In reality, only 28 percent of young millennials over 23 have started saving for retirement, women start having children at 27 and getting married at 28, and most men are 30 when they marry. The average American is actually 32 when they buy their first home.
Given the long-term financial ties, it’s not surprising that 85% of young people and 89% parents say their parent / child relationship is somewhat or very important; and 63% of Generation Z and Young Millennials say “My mom and / or dad is my best friend,” compared to 77% of their parents (81% of dads and 74% of moms).
As Baby Boomers move into retirement, how well their passed financial wisdom onto their children will become painfully apparent. Or, perhaps the next generations will surprise them with their ability to adjust the swiftly changing financial environment.