Young people turn to their nearest and dearest for help with managing their money: study

64% of American students say they turn to their parents or relatives for financial advice. Image: Shutterstock

Younger people tend to be more open about the subject of money—regarded as taboo in conversation by several generations.. Compared to their predecessors, they're more confident and at ease with their desire for a comfortable lifestyle. And to make informed financial decisions, they seek the help of those closest to them.

Around two-thirds (64%) of American college students say they turn to their parents or family members for financial advice, according to a recent survey by Morning Brew/ Generation Lab.* In comparison, only 12% seek help from a mentor. Even fewer turn to a friend or a bank to help them grow their wealth. This suggests that young people don't necessarily think that banks and financial institutions are the best people to turn to for support in achieving their financial ambitions.

Twenty-somethings readily admit that they hope to be rich one day. Two-thirds of respondents say they would be happy with a million dollars in assets. While young people are aware that such a sum cannot be earned overnight, they are convinced of their ability to achieve it.

Some 45% of American students think they'll achieve financial success in their 30s (between the ages of 31 and 40, to be precise). Others believe they'll get there sooner, in their 20s (21%). On the other hand, a tiny proportion is more pessimistic, believing they'll never achieve financial success (8%).

Improving financial understanding

But the road to success is strewn with pitfalls. Numerous reports indicate that young people's standard of living has deteriorated over recent decades, whatever their level of education. The salaries they receive when they enter the job market often don't live up to their expectations, except for graduates whose profile and skills attract the interest of companies.

But for everyone else, there's no question of giving up hope. Many young people are thinking of different ways to generate additional income and improve their financial situation. To do so, they don't hesitate to work several jobs—or side gigs—or to get to grips with money matters for themselves.

Also read: Is talking about money the final frontier for inhibition-shunning Gen Z?

Indeed, young people's lack of financial literacy is often singled out for criticism. Three quarters of Generation Z feel insecure when it comes to making money-related decisions, according to a survey conducted by the fintech Greenlight in 2021 among 1,029 Americans aged 13 to 20.

In the absence of guidance, some young people decide to learn about finance themselves. A third of them turn to their personal network to fill in the gaps, while 28% look to banks.

Others seek financial advice on social networks, particularly on TikTok. While the social network is full of influencers specializing in the subject, young people shouldn't necessarily take their opinions at face value. It's always wiser to turn to reliable sources of information to find out how to invest a nest egg.

*This Morning Brew and Generation Lab survey was carried out last October among 978 US college students.