ATHENS, Ga. — A new study from the University of Georgia found that when it comes to financial health, baby boomers, Generation X and millennials have markedly different values and beliefs.
The study focused on data from the 2016 Consumer Financial Protection Bureau’s National Financial Well-Being Survey.
A release from the university said their review of the study focused on the financial knowledge, skills and behaviors of the baby boomer, X and millennial generations.
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“Millennials are faced with various mid-life financial choices and long-term planning decisions, and therefore need to improve their financial knowledge, skills and behaviors in order to reach better financial well-being,” Lu Fan, lead author and associate professor for UGA’s College of Family and Consumer Sciences said.
More generally, the study found that “older consumers in the United States, on average, have higher financial well-being than their younger counterparts,” but that having financial well-being and freedom had different meanings across the different generations.
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Analyzing the survey, UGA found the following differences between the three generations in terms of behavior and knowledge:
- Millennials showed lower levels of financial well-being, money mangement skills and knowledge.
- Millennials could benefit more from increasing their objective financial knowledge compared to boomers.
- Boomers had the highest levels of financial well-being, money mangement skills and knowledge.
- Boomers could improve financial well-being from better money management behavior and goal commitment.
- Financial knowledge and money management skills tended to increase with age.
- Gen Xers felt sticking to long-term financial goals was especially crucial as they need to plan their spending leading up to and during retirement.
“We focused on the differences in the relationships between financial knowledge, skill, and behavior and financial well-being of these three generations. This is to give us a broader understanding of how people learn things and use their knowledge and skills differently by generation,” Fan said. “They have different life goals and priorities at different ages.”
According to Fan, some factors are more impactful to a generation’s financial health than others. As a result, the study found that it might be better for financial advisors and educators to customize their programs for each generation.
The study results showed that being able to set and follow through on long-term goals for your finances was tied to increased financial health.
While Gen X had the biggest focus on this as a management style for their finances, the study authors said millennials would benefit more from having better financial knowledge.
Baby boomers, on the other hand, could benefit from having better money management behavior and commitment to their financial goals.
“Most boomers are now in retirement, so it’s important to understand their financial needs and management behaviors during this life stage,” Fan said.
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