Personal Finance

Thursday, July 28, 2016

Talking to your Millennial Children about Finances

Your Millennial children are all grown up: There are now 83.1 million “Generation Y” 18-to-34-year-olds, and they currently comprise the largest generation. They are entering the workforce in large numbers, and beginning to earn their own living. They’re looking to you for financial advice—but they likely think differently about money than you do.


Millennial children grew up during a very uncertain time. During their teenage years and young adult lives, they watched the “dotcom” bubble burst and account values shrink during the great recession. They watched as the homes most people viewed as a secure asset lost significant value. They have taken on more student debt than any generation prior to them, and have graduated in a tumultuous job market. When they entered the job market they learned not to expect job security, after watching their parents’ positions get eliminated or downsized. There is an understanding that programs that provided security for previous generations, like pensions and Social Security, may not be there for them.

These life experiences are having a direct impact on how Millennial children are making life and financial decisions. They are more likely than previous generations to delay having children and getting married. There is less value placed on purchasing a home. Flexibility is a priority for the individual who may need to relocate in order to advance their career. Staying with one company throughout their working career is no longer an option. Financial planning decisions now rest squarely on their shoulders, with little financial education or support from their employers. Paying down student debt is in the forefront of their minds, compared to the traditional earlyadult goals of previous generations.

While all of this may seem daunting as the parent of a Millennial, it is important to begin having financial conversations with your Gen Y children. Where can you start?

Start having conversations early:

Your children can learn from your previous experiences—both good and bad. It may be helpful to share stories about how and why you made decisions, what helped you successfully build wealth, and what you would do differently if you could. It’s probably best to stay away from giving direct advice, as Millennials prefer to learn from your stories and draw their own conclusions.

Be their sounding board:

It is valuable to help your children think through the pros and cons of their financial decisions. Are they deciding between paying more on their college loan, or buying that new car? Maybe they’re considering a higherpaying consulting job with flexibility, over a traditional position with strong benefits. Listen to their perspective and then talk it through with them—and help them see the impact of their decisions, both short- and long-term.

Introduce them to your financial advisor:

Gen Y is open to seeking advice from experts. Ask your advisor to have a one-on-one meeting with your child. That meeting could be to develop a budget, create a financial plan, or review their employee benefits. In cases where children will inherit significant wealth, some families have started allowing their children to meet with their advisor— to participate in the investment review of a smaller account they own. This teaches them the investment basics. Regardless, meeting with an expert will help them get started by creating good financial habits.

Consider making your gifts strategic:

If you are helping your children financially, consider making gifts to a Roth IRA, an investment account, or their children’s 529 plans. You can teach them the value of matching by requiring them to make a contribution in order to receive the gift. You can gift up to $14,000 per parent to each child and grandchild in 2016. Have your children review their new accounts annually.

Encourage philanthropy:

Millennials are more community-minded than previous generations. Some families gift each of their children a set amount each year, and have them decide where to make that donation. This helps inspire giving, passes along family values, allows them to have a direct impact, and encourages gratitude.

Don’t keep your plan a secret:

Share your values, thoughts, and expectations around money. If your children will receive an inheritance, start asking how they feel about it and how they think they will manage it. Having an annual family meeting to include children in the financial and estate plan has helped many families create an open dialogue among one another, and set expectations. It also helps to foster family harmony after a parent experiences an illness or passes away.

At Janney, we are here to help you begin to have those conversations with your Millennial children. Speak to your advisor about how we can help.

Contact us for more information, and to schedule an appointment with a Janney advisor.

Jessica Landis
Director of Financial Planning

Jessica Landis is Janney’s Director of Financial Planning. In this role, she is responsible for the day-to-day management and operations of the internal Wealth Planning team. In addition, she plays a critical role in process improvement initiatives focused on enhancing Janney’s financial planning offerings. 

Jessica recently joined Janney after serving as a financial advisor with Legacy Planning Partners. During her seven-year tenure at Legacy, she was part of an advisory team with a focus on comprehensive financial planning. Her role included designing financial plans, determining product solutions, and educating clients on the most suitable options. She specialized in working with pre-retirees and on multi-generational plans, with a focus on strengthening the customer relationship through the financial planning process. 

Jessica graduated West Chester University with a Bachelor of Arts in Communication Studies and a Bachelor of Science in Finance. She holds her Series 7, 66, and Life Accident and Health licenses, and is also a CFP®.

This is for informative purposes only and in no event should be construed as a representation by us or as an offer to sell, or solicitation of an offer to buy any securities. The factual information given herein is taken from sources that we believe to be reliable, but is not guaranteed by us as to accuracy or completeness. Opinions expressed are subject to change without notice and do not take into account the particular investment objectives, financial situation or needs of individual investors. Employees of Janney Montgomery Scott LLC or its affiliates may, at times, release written or oral commentary, technical analysis or trading strategies that differ from the opinions expressed within. 

Share this article