Authored by: Eliana Cooper, Summer Intern 2024
Here’s a hot take: Our economy today is an unaccommodating environment for young adults trying to begin establishing their financial future. Why might you ask? According to a new Pew Research Center report, young adults in the U.S. are following a much different path than their parents, reaching significant life milestones later in adulthood than their parents generation.1 Unfortunately this stems from large amounts of college debt, lack of financial education, unemployment, and the increased cost of living.
Why is this so common?
The recurring theme of financial crises among younger generations can be attributed to a lack of financial education. Over half of American families never discuss finances at home, and financial literacy is not a required course in middle or high schools.2 Many teenagers begin working in high school, earning money that is often spent quickly. By the time they graduate college and start their careers, they’ve developed poor financial habits that persist into their 20s and beyond. This often leads to experiencing significant financial hurdles at a critical time in their lives. However, the silver lining of hitting a low point is that the only way to go is up.
How Financial Planning Can Help
Did you know that many financial advisors also serve young investors eager to establish their wealth? It’s increasingly important to connect with a financial advisor in your 20s and 30s due to student loan debt, rising interest rates, and inflation, all of which make it harder to grow and accumulate wealth. By consulting with a financial advisor, young adults can increase their financial literacy and become more confident when making financial decisions when it comes to debt and investment management, tax planning, and retirement planning. Starting early with financial planning and investing can potentially be beneficial for young adults navigating the world of finance. Additionally, financial advisors can assist individuals in reaching their financial goals and help them from making emotional or impulsive decisions that could negatively impact their future.
The Solution
It may not be as juicy as the latest celebrity gossip, but financial planning needs to be a topic of discussion among younger generations. It needs to be openly shared in homes. And financial advisors need to expand their audience.
The solution is simple: people need to start talking. Parents, talk about financial advisors with your kids and discuss the guidance and management they could provide.Talk honestly about finances in your homes with your kids. Talk about the benefits of beginning your financial journey early. Talk to the young adults in your life and ask them what their plan is. We need to normalize discussions around money amongst families. If talked about enough and given a level of importance to these young adults, this crisis will transform into a financial breakthrough for younger generations. It’s about time!
Advisory products and services offered by Investment Adviser Representatives through Prime Capital Investment Advisors, LLC (“PCIA”), a federally registered investment adviser. PCIA: 6201 College Blvd., Suite#150, Overland Park, KS 66211. PCIA doing business as Prime Capital Wealth Management (“PCWM”) and Qualified Plan Advisors (“QPA”). Securities offered by Registered Representatives through Private Client Services, Member FINRA/SIPC. PCIA and Private Client Services are separate entities and are not affiliated.
This information does not constitute legal or tax advice. PCIA and its associates do not provide legal or tax advice. Individuals should consult with an attorney or professional specializing in the fields of legal, tax, or accounting regarding the applicability of this information for their situations.
Sources
2 www.empower.com/the-currency/money/money-talks
3 https://www.empower.com/the-currency/money/what-does-financial-advisor-do
