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The Generation Gap: Why Your Kids See Money Differently

Arizona Federal Staff

No doubt about it. Children learn their basic money habits from their parents.

But, just like everything else, your kids’ perspectives about financial matters are also shaped by what’s happening in the world around them. Their generational experience will give them a slightly different approach to spending, saving and investing money.

Seven Generations
Right now, there are seven defined generations – ranging from the nearly 100-year-old “Greatest Generation” to the toddler set known as “Generation Alpha.” Each of these generations came of age – or are growing up – with different events and attitudes influencing their financial education.

Here’s a peek into how each generational group thinks about money. 

The Greatest Generation: Frugal savers
Born 1910 - 1927

The youngest members of the Greatest Generation turn 96 in 2020. As children, they learned to save their pennies and fix things first before buying something new. If you’re lucky enough to know someone from this era, ask them about their first big purchase – how much it cost and how they saved to buy it. 

The Silent Generation: Cautious spenders
Born 1928-1945

Dubbed the Silent Generation because of the contrast with their parents, this group ranges in age from 78 through 92. From a financial perspective, the Silent Generation is relatively cautious even though they lived through times of great prosperity. They saved a lot, and as a result, emerged with substantial savings to fund their retirement years.

Baby Boomers: Heading to retirement
Born 1946 - 1964

Born post WWII, 10,000 Baby Boomers are now turning 65 every day.1 As they prepare to retire, many Boomers have less saved than they would like. One of the first generations to embrace credit spending, Baby Boomers often took a “buy now, pay later” approach to financial decisions, which wasn’t helped by the Great Recession in 2008 and fewer companies providing employer-paid pensions and healthcare.

TIP: Ask your favorite Baby Boomer about financial lessons learned and what they would do differently if they could. 

Gen X: In-between financially
Born 1965 - 1980

Generation X is sometimes a forgotten generation in between the larger group of Baby Boomers and Millennials on either side. Gen X’s approach to financial matters is also in the middle. As the first generation to grow up with two-income families as the norm, Gen X struggled financially, with many holding significant credit card debt. With many jobs no longer coming with pensions, retirement planning is also on their minds. 

Millennials: Financially conservative
Born 1981 - 1996

Now ages 24 through 39, older Millennials came of age during the Great Recession and its recovery. As a result, many struggled to find work in their early 20s and are still working to catch up financially. Living through turbulent economic times has made Millennials more practical in terms of saving money and financially conservative investors. Thanks to the burden of heavy student loan debt, Millennials are emerging as disciplined financial planners, who are delaying milestones such as getting married, buying a home and having children.

TIP: Advise the young Millennials in your life not to aim to keep up with the Joneses in terms of spending on vacations or luxury items. Reinforce the generational tendencies to save first and make major purchases when the timing is right. 

Gen Z: Pragmatic savers
Born 1997 - 2009

At 23, the oldest Gen Z-ers are embarking on their careers. Even before the recent economic downturn, Gen Z was taking a pragmatic approach to money. Compared to their predecessors, Gen Z-ers are saving more, earlier. Highly entrepreneurial, 77% are pursuing freelance work, and 35% of Gen Z members already own or plan to own their own business.2

TIP: As your Gen Z children and grandchildren come of age, offer guidance on the value of establishing a strong credit rating through thoughtful use of credit cards – and the need to set aside savings equal to six months of living expenses as an emergency fund.

Generation Alpha: Technologically advanced
Born 2010 - 2025

Already found with a smartphone and tablet in hand and familiar with Artificial Intelligence through Alexa and Siri, Generation Alpha is described as the first generation to be immersed in technology rather than technology users. Experts predict the generation will be the most educated and technologically savvy, with money attitudes profoundly shaped by the recent economic challenges. In the near-term, they’re ready to learn their financial education basics, including how money is earned, the difference between needs and wants, and the satisfaction that comes with saving.

Money Talks Guide for Parents and Grandparents
For a step-by-step guide to teaching your kids about money, check out Arizona Federal’s FREE Money Talks Guides for Parents or Grandparents, along with a Money Milestones Map to track their progress from preschool through young adulthood.  

1 “By 2030, All Baby Boomers will be 65 or Older,” U.S. Census, December 2019.

2 “Gen Z is Confronting Their Financial Fears,” Rave Reviews, 2019.