Financial perspectives of emerging adults : similarities and differences between gen-zeds and millennials

Abstract

Emerging adults (individuals ages 18-24) today are struggling with finance. In fact, financial factors make up four of the top five stressors of college students today (Sinha et al., 2018) while, at the same time, much research has shown these populations lack the financial skills necessary to make even the most basic financial decisions (Serido & Deenanath, 2016; Shim, Serido, Bosch, & Tang, 2013; Terriquez & Gurantz, 2014). The problem does not seem to be related to a lack of resources, as there are currently more tools to help one improve financial literacy than ever before (Sinha, Tan, & Zhan, 2018). Perhaps roots of the problem stem from development. In 2011, Gudmonson and Danes founded a theory of financial socialization, claiming that financial development stems primarily from implicit and explicit lessons provided by one’s parents or guardians. This study dives into the financial perspectives of Millennials and Generation Z, attempting to cypher out commonalities and differences in financial development, knowledge, value, and anxiety between and within the generations. Major findings include differences between financial perspectives based on gender, social class, and political orientation. Adding to Gudmonson and Danes’ (2011) financial socialization theory, major differences were found in financial literacy and anxiety based on sibling birth order. These results suggest that siblings may directly or indirectly affect one’s financial socialization by influencing or supplementing parents’ explicit and implicit financial lessons. The study concludes with ideas for future research.