Research by a major financial firm revealed that teenagers today are much less prepared than their parents were to make good financial decisions. The study showed that parents are not teaching their children about money, nor is there much effort in public schools to do so. The research is discouraging because poor financial skills can lead to serious personal and family problems.
In considering the implications on America’s future, I began thinking about the three major generations I have worked with during my career. I began with the Greatest Generation, those raised during World War 2 and the great depression. As a group they developed good financial skills which were learned in the trenches of shortages and sacrifice. They didn’t need to be taught “The value of a nickel,” as they called it, because they had so few of them. The trials of their lives made them cautious money managers and, even though many only had financially average careers, they became some of my wealthiest clients by implementing sound principles and strict discipline.
This group raised the Baby Boomers and taught their children to be careful with money, learn a valuable skill, value education, work hard and take responsibility for their lives. Not all learned the lessons, but many did. Unfortunately, by the time the Boomers were raising their families, many of the painful financial lessons learned by the Greatest generation had largely faded from the national memory.
The Millennial generation was raised in a prosperous society. Money was abundant and many grew up thinking the solution to every problem would be freely provided to them by someone else – either a parent or the government. Perhaps the need for financial education seemed no longer necessary. At least that is what the research seems to indicate, which would be a national tragedy. But I have found hope in a group of young college students, Generation Z, who first approached me about a year ago.
They had formed an investment club and asked if I would be part of it. Their interest in financial matters impressed me so I agreed to attend. In each meeting I was thrilled as they came prepared to listen and share with each other the things they were learning. I saw what the researchers had not seen. These young people were thirsting to gain all the knowledge they could about money and investing. They just weren’t quite sure where to find it.
Americas youth in general have a financial literacy problem, and I don’t believe the schools are going to solve it. But with the vast educational resources now universally available, the solution is within reach of every individual. It only takes the determination to decide one’s own future. The good news about good financial management is that it can be approached slowly and is best learned by doing. You will make mistakes but as I have taught my young “Gen Z” investment club, the biggest mistake is to not get started. I have hope that this new generation can turn the cycle around.
Dan Wyson, CFP® is author of “The Gold Egg,” and “21 Financial Myths” and owner of Wyson Financial/Wealth Management 375 E. Riverside Dr. St. George, UT 84790 – 435-986-9525 – Securities and Advisory services offered through Commonwealth Financial Network, member FINRA/SIPC, a registered investment advisor
