Gen Z Beginning Financial Planning Earlier Than Previous Generations
April 24 2024 - 1:00PM
Business Wire
Corebridge Financial research finds nearly
three in four Gen Zers say they “got serious” about financial
planning before age 25
According to a new survey from Corebridge Financial gauging
sentiments about financial knowledge and expertise during National
Financial Capability Month, roughly one in three respondents say
they did not “get serious” about financial planning until after the
age of 35. However, younger generations report they are starting
their financial journeys earlier.
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Nearly half (49%) of baby boomers say they did not seriously
start their financial planning until after they turned 35, and more
than a third (35%) put off planning until they were 40 or
older.
In contrast, 69% of millennials say they started seriously
planning their finances before turning 35. Even more precocious is
the youngest cohort: 73% of Gen Z report getting serious about
their finances between 18 and 25 years old, with less than 20%
saying they have not yet gotten serious about the topic.
“The best time to start planting the seeds for financial success
is as early as possible, so it is great to see younger people
getting a head start on financial planning. Establishing a
foundation of financial awareness, literacy and skills early on can
have huge impacts on individuals, families and society as a whole,”
said Terri Fiedler, President of Retirement Services at Corebridge
Financial. “At the same time, successfully managing your finances
is a lifelong process, meaning there is always opportunity to build
and sharpen those capabilities – whether that’s in the classroom,
the home or the workplace – helping turn thoughts into actions and
actions into outcomes.”
Education is key to financial confidence
Early financial education has a serious impact on how Americans
feel about their financial capabilities. More than three in five
(61%) never took a personal finance class at any level of school.
Of those who identify as financial novices, an overwhelming 81%
never studied personal finance in school. In contrast, more than
half (53%) of self-identified experts took a personal finance
course in college, and around one quarter (24%) took a personal
finance course in high school.
Although older generations got a later start in their own
financial planning, American parents are committed to helping the
next generations learn early. Parents with children under 18 are
teaching their kids about saving money (56%), the value of money
(49%) and spending habits (42%).
Financial skill building needs differ across
generations
While more than seven in ten are confident in their ability to
manage day-to-day expenses (77%), build a budget (73%) and manage
debt (72%), there is a significant drop-off when it comes to more
complex financial activities. Roughly half have confidence in their
ability to manage strategies to maximize compound interest (52%) or
invest in stocks and mutual funds (48%).
Different generations of respondents are interested in learning
more about different topics, perhaps reflecting the different
stages of life for the various age cohorts.
Gen Z and millennials say that they are most interested in
becoming adept at building a budget, with 38% of both groups
selecting it as one of the three financial planning skills they
would most want to instantly gain expertise in. As Gen X approaches
the later stages of their careers, they are the most likely to
express interest in becoming experts in investing in stocks and
mutual funds (34%) and preparing for retirement (32%). Baby boomers
share the enthusiasm for becoming investing pros, with 45% saying
they would like to instantly amp up this skill. As baby boomers
enter their golden years, they are also the most interested in
becoming experts in planning for long-term care needs (30%).
When Americans want to improve their financial capabilities,
they leverage different resources. While Gen Z is most likely to
turn to social media to strengthen financial planning skills (40%),
a plurality of baby boomers (36%) use financial professionals.
Though artificial intelligence (AI) continues to garner attention
in all aspects of life, it has not yet broken through as a
mainstream financial planning tool, with just 9% of respondents
saying they use AI tools to improve their financial skills.
When looking at how Americans tend to spend their time,
financial planning represents a small fraction of their monthly
activities. Nearly nine out of ten (88%) spend four or fewer hours
per month on financial planning, compared to 41% who spend at least
10 hours per month streaming or watching movies and TV.
Improving financial skills this April
Originally designated Financial Literacy Month in 2004, National
Financial Capability Month underscores the importance of holistic
financial education. When asked what being financially capable
means to them, respondents were most likely to select the ability
to be financially independent (39%), to manage day-to-day financial
affairs without stress (38%) and to provide for family (37%).
Corebridge encourages those who want to strengthen their
financial capabilities to take advantage of the following
resources.
- Take stock of where you are today: 16% of respondents
said they would be willing to take a financial wellness assessment
this month. The online Corebridge FutureFIT Wellness Check can help
you assess where you are today and generate a personalized
FutureFIT plan.
- Budget for today – and tomorrow: 28% of respondents say
they would be willing to build a budget within the next month. Use
Factor in your future, an inflation visualizer created by
Corebridge to help start planning for increasing costs across the
next 10, 20 or 30 years.
- Make a plan to save: 26% of respondents say they are
willing to change their spending habits in the next month to
support their financial future. Use the Saving Center from
Corebridge for tips on savings strategies, whether your goal is to
keep more cash on hand, reduce debt or increase retirement
savings.
Methodology
The 2024 Financial Capability Survey was conducted online by
Morning Consult on behalf of Corebridge Financial between March
19-23, 2024 among a national sample of 2,200 adults.
About Corebridge Financial
Corebridge Financial, Inc. (NYSE: CRBG) makes it possible for
more people to take action in their financial lives. With more than
$380 billion in assets under management and administration as of
December 31, 2023, Corebridge Financial is one of the largest
providers of retirement solutions and insurance products in the
United States. We proudly partner with financial professionals and
institutions to help individuals plan, save for and achieve secure
financial futures. For more information, visit
corebridgefinancial.com and follow us on LinkedIn and YouTube.
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Işıl Müderrisoğlu (Investors):
investorrelations@corebridgefinancial.com Jay Russo (Media):
jay.russo@corebridgefinancial.com
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