Claire Klassen, Consumer Financial Education Specialist at Momentum Metropolitan

 

Despite getting a bad rap in the past, millennials – defined as those born between 1981 –  1986 – are now all grown up. And, for an age group that was once unfairly dubbed the most narcissistic generation of all time, they’re actually pretty good parents.

 

Known for their ‘positive parenting’ style, great concern for their children’s safety, and their diligence in saving for their children’s future, millennials “have a world of information at their fingertips, and are not afraid to consult the internet to find the answers to their questions concerning their kids”, says Claire Klassen, Consumer Financial Education Specialist at Momentum Metropolitan.

 

“Naturally, this access to information results in a more informed, and thus more empowered individual. This, in turn, impacts their relationship with money, and what their children learn about money.”

 

Klassen says that there are a number of things that millennial parents are doing better than previous generations when it comes to how they approach their finances – and what they’re teaching their children – whether they realise it, or not.

 

They take an active interest in their finances

 

“Millennials have grown up in the age of the internet, and as a result, they’re used to hunting for the information they need – how can you expect them to accept something you tell them at face value, when there are answers just a click of a button away?” says Klassen.

 

According to the 2022 Investopedia Financial Literacy Survey, this generation is the most confident and invested in their financial future. They’re keen on educating themselves and excited to partake in online financial courses, such as Making it with the Majolas. “This influences how they approach their finances, and their children see that it’s important to take an active interest in their own money,” she adds.

 

They believe in saving

 

South African millennials have lived through two or three global recessions, apartheid, loadshedding, and a pandemic. They’ve seen a lot, and they’ve learned to be prepared for a rainy day, building up emergency funds.

 

They also believe in saving for their children’s education: according to Forbes, 66% of millennials put aside money for their children’s tertiary studies, compared to 47% of Gen Xers and 35% of baby boomer parents. There’s no doubt that this diligence when it comes to saving has been noticed by their children, and many parents teach their children the importance of saving from a young age.

 

Klassen suggests opening a bank account for children. “Teach them how to save and how to research which instruments are best for saving, helping them set – and achieve – financial goals.”

 

They believe in work-life balance

 

“More so than any previous generations, millennials believe in the importance of work-life balance, and demand more flexibility in their jobs than previous generations. Millennials know that this balance is more important than only succeeding at their jobs; something that their parents prioritised. This attitude teaches their children that money is not everything, and that true wealth is measured by more than just the money in your bank account,” she says.

 

Klassen says that while millennials are getting a lot right, there is always room for improvement. She shares a couple of things that millennials can do better when it comes to their matters.

 

They need to help their children understand financial consequences

 

Many millennials practise positive parenting. An example of this is that instead of telling their child that they cannot hit a sibling, for example, they would rather redirect their child’s energy to something they can do, such as reading a book.

 

While this approach has many merits, it can sometimes inadvertently prevent a child from facing the consequences of their mistakes, which is an important lesson when it comes to their finances. The link to the why is sometimes missing, leaving the child to substitute the unpleasant experience rather than having to face it and learn from it.

 

“Instead of stopping your child from spending the little money that they have saved on a cheap toy that they will either break or soon tire of, let them make the mistake. They will soon learn the reward of saving a little longer for something they really want, which will last longer and give them more pleasure in the long run. And in fact, this is true positive parenting: where children are gently shown the consequences of their financial decisions,” Klassen suggests.

 

They need to realise when it’s wise to engage a professional

 

Millennials are empowered when it comes to their finances, but the flip side of this is that they prefer to do their own research or rely on the advice of friends and family members. They don’t always see the value in consulting with a professional.

 

“By engaging a financial adviser, you’re teaching your children the value of expert advice, and that – while it’s good to take an interest in your own finances – an experienced professional will give you the unbiased, personalised and expert guidance that will help you make better, more informed decisions,” says Klassen.

 

ENDS