Gen Z, Millennials Delay Making Financial Plans As They Take Too Long
Many young people said they delayed financial planning because of time constraints, a survey found.
Charles Schwab, a financial-services firm, surveyed 1,000 Americans for their views on wealth.
Gen Zers' and millennials' attitudes often contrasted with those of boomers, the survey found.
Many Gen Zers and millennials are delaying making financial plans because they're time-consuming and complicated, a survey has found.
The survey was conducted for financial-services company Charles Schwab by Logica Research. Charles Schwab said it surveyed 1,000 adults, which it said were nationally representative of the US population.
The survey found that the Gen Z and millennial respondents had largely similar attitudes towards wealth and finance, but that these views contrasted sharply with what the boomer respondents thought.
Younger generations were considerably more likely than others to be put off from creating financial plans because of the amount of time, money, and perceived effort involved. Twenty-nine percent of Gen Z and millennial respondents said they didn't have enough time to develop a formal financial plan, compared with 9% of boomer respondents.
More than a quarter of the Gen Zers and millennials that were surveyed said it seemed "too complicated to create one.
Around two-thirds of respondents said they didn't have a formal financial plan and about a quarter said they didn't have a financial plan at all, though the survey didn't break this down by age. A study published in April by Credit Karma found that the majority of respondents didn't know how to calculate their net worth and nearly a third listed their net worth as $0 or a negative number.
More than half of boomers – those aged 58 to 75 – who responded to Charles Schwab's survey said they didn't have a documented formal financial plan because they didn't have enough money to need one. For Gen Zers and millennials, this figure was 38%.
One factor where Gen Zers and millennials differed was that considerably more Gen Z respondents said they didn't have a formal financial plan because they hadn't had a major life event that necessitated creating one. Gen Zers, who Charles Schwab classed as people aged 21 to 25, are less likely to have children, be saving for a wedding, or have bought a property.
A 2020 Bank of America Research report predicted that the pandemic would impact Gen Z's financial and professional future like the Great Recession did for millennials.
Gen Zers have had to navigate graduating from high school and college via Zoom before entering an unsteady jobs market. There were waves of layoffs in 2020 as the US entered lockdown and more recently, a series of layoffs in the tech industry. According to a recent survey by PYMENTS, 66% of Gen Z respondents said they were living paycheck to paycheck.
Younger generations appear to place more value on wealth
But despite their lack of financial planning, younger generations appear to place more value on wealth than older ones. Two-thirds of boomer respondents said that time was more important than money compared with 56% of millennial respondents, the survey found.
Comparisons with their friends and family influence how Gen Zers and millennials perceive their wealth, Charles Schwab's report found.
Gen Zers and millennials were nearly twice as likely as boomers to say that being able to afford a similar lifestyle as their friends made them feel wealthy, and Gen Zers were around four times as likely as boomers to compare their lifestyle to that of their family and friends on social media.
Source: Business Insider
