Everyone who has gone through an awkward phase has heard the old refrain, “It’s what on the inside that counts.” Sage advice, but it might need a cynical addendum: “It’s what’s in the inside of your wallet that counts.”
That’s if you ask more than a third of Americans, who say they value financial compatibility more than physical or intellectual compatibility, per Northwestern Mutual's latest wave of its 2023 Planning & Progress Study, which surveyed more than 2,700 people. Aligning on money is all the more pressing for younger generations, who are earlier on in their relationships and careers—nearly half (49%) of Gen Zers view financial compatibility as more important than physical compatibility. That’s compared to 40% of millennials, 35% of Gen Xers, and 30% of baby boomers.
It’s more complicated than just searching for good looks or riches; it’s a sign of younger generations' economic experiences. Finances have long been a stressor for couples, from sharing a bank account to negotiating housework around who is the primary breadwinner to just spending in general. But it becomes all the more urgent when people feel financially insecure. While data indicates a strong economy, many Americans are still reeling from inflation, layoff and recession fears, socioeconomic turmoil, and the pandemic.
It arguably feels even more poignant for younger generations, thanks to the economy they grew up in and their current life stage. After struggling to build wealth thanks to two ill-timed recessions before the age of 40 and outsize student loans, millennials are entering high-spending years as they look to settle down in their first home or even start a family. Gen Zers have watched millennials grapple with these economic challenges, all while dealing with their own fair share. And given their entry-level salaries and lack of time to build wealth, they’re in the standard economically vulnerable position of a twentysomething.
It follows then, that they're learning to discuss money habits with their partners early on. Thirty-two percent of Gen Zers report to Northwestern Mutual that money conversations should take place even before a relationship gets serious, a number that climbs to 40% for millennials.
"Generational wealth conversations are happening earlier and more often than ever, and because of it, younger generations are learning more about their parents' financial compatibility and habits—both good and bad,” Veronica Fuentes, CFP, Northwestern Mutual managing director, tells Fortune, indicating that they're looking to their parents' relationships around money.
It’s likely that watching their parents navigate finances as a single adult amid economic crises like the Great Recession or the pandemic shaped younger generations’ attitude towards talking to their partner about money—especially since divorce became more common as zoomers and millennials grew up; spats about finances have even put pressure on boomers who have later-in-life divorces.
Yet older couples are more likely to report seeing “eye to eye” with their partners regarding their financial approach. Northwestern Mutual found that financial strains tend to become less common the older respondents get—an issue that the report authors credit to creating more wealth and making goals together over time. Boomers are 25 percentage points less likely to say money is a “significant issue in their relationship” than millennials are.
"When it comes to financial anxiety, younger generations are facing multiple pressures. They are more vulnerable to economic downturns, they have had less time to prepare for volatility, and they may not have faced financial challenges as a couple,” Fuentes says. “Meanwhile, older couples may have faced, planned for, and persevered through periods of financial uncertainty multiple times.”
Looks fade, after all. Money might too, but it also might accumulate if you have the same financial outlook.
Aligning on money is all the more pressing for younger generations, who are earlier on in their relationships and careers—nearly half (49%) of Gen Zers view financial compatibility as more important than physical compatibility. That's compared to 40% of millennials, 35% of Gen Xers, and 30% of baby boomers.
Gen Z: Born between 1997 and 2012. A socially conscious generation that prioritizes mental health, sustainability, and racial equity, while shaping consumer habits with a tech-savvy approach.
Gen Z spend most of their money on household bills expenses, with 52.3% saying they spent the most money on these costs. The estimated average amount Gen Z spends on socializing is $166.75 per month, totaling $2,000 a year.
Workers in their twenties today have 86% less purchasing power than baby boomers did at the same age. “The cost of public and private school tuition has increased by 310% and 245%, respectively, since the 1970s” (para. 1).
“When you think about money holistically and the emotional side of money … that's what ultimately feels like the lack of hope and confidence,” Noah Kerner, CEO of Acorns, told USA TODAY. The company also found that 33% of millennials and 28% of Gen Z are unable to enjoy their lives because they obsess over money.
More than half, or 53%, of Gen Zers say higher costs are a barrier to their financial success, according to a separate survey from Bank of America. In addition to soaring food and housing expenses, millennials and Gen Z face other financial challenges their parents did not as young adults.
According to McKinsey, over half (55%) of Gen Zers report having either been diagnosed or receiving treatment for a mental health condition, compared to 31% of people aged 55 to 64, who have had decades longer to seek and get treatment.
Key Findings: Gen Zers are generous, especially with their time and energy. 84% of Gen Zers report that they support nonprofit organizations, charities, or causes in some way.
The most trusted institutions are Science, the military and the medical system. Similarly, fewer than one in four Gen Z members trust the information they find on the internet, the U.S. Supreme Court and the criminal justice system. Science garners the most trust, at 71%.
A gigantic wealth transfer over roughly the next decade will likely make millennials “the richest generation in history,” according to a report from global real estate consultancy Knight Frank.
Gen Z's standout priorities for 2024 are centered around self-enrichment: things like starting new jobs, learning new skills, reading more, or finding love.
In many ways, Gen Zers are better off than their parents were 30 years ago, but fewer are financially independent — here's why. Compared with their parents at this age, today's young adults are more likely to have a college degree and work full time, according to a recent report by the Pew Research Center.
CHARLOTTE, NC – Today, 85% of Gen Zers cite one or more barriers to achieving financial success. Topping the list is the higher cost of living, cited by 53% of respondents to Bank of America's annual s Better Money Habit survey (PDF) .
For example, a new study by the Investment Company Institute (ICI) finds that “Gen Z households have nearly three times more assets in the [retirement] plan accounts (adjusted for inflation) that Gen X households did at the same age.” More Gen Z-ers have retirement plans set up and they've saved more in those accounts.
Generation Z is America's most diverse cohort yet — but they're united by deep anxieties about the world around them. Why it matters: A collision of political, economic and social trends has minted a generation in which huge numbers of people struggle to cope with the present and feel even worse about the future.
Through a compilation of Gen Z interviews and studies from Bain & Co, CFA Institute, EY, and others, the article concludes that the youngest generation in the workforce is motivated by competitive compensation and quick career growth, and is quick to move on to other opportunities if they don't get that.
Less than a third of Gen Z (31%) feel financially secure, with more than half (52%) saying they are very or extremely worried about not having enough money.
Generation Zers tend to lean on their moral compass with a strong inclination to stand up for what's right. They prioritize critical issues such as healthcare, mental health, education, financial stability, civic engagement, racial equality, inclusion, and environmental conservation.
Introduction: My name is Horacio Brakus JD, I am a lively, splendid, jolly, vivacious, vast, cheerful, agreeable person who loves writing and wants to share my knowledge and understanding with you.
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