As Millennials graduate, become employed, start businesses and have families, their finances change. With increasing complexity come many options they must evaluate, as well as new responsibilities. Millennials are more educated that prior generations, but they are also saddled with greater student loan debt than any prior generation. And, despite their higher level of education, they get low marks for financial literacy according to a recent U.S. Treasury Department and Department of Education assessment.
What are they doing about their finances?
Sources like Pew Research Center tell us that many Millennials seek advice from their parents. Unlike Boomers who did not want to speak to their parents, Millennials often share interests with their parents and correspondingly seek their counsel.However, taking financial advice from their parents may not a good approach because many of their parents lack sufficient savings to fund their retirement needs. Mark Grimaldi, co-author of “The Money Compass: Where Your Money Went and How to Get It Back” says “never take advice from someone less successful than you are.” He continues: “With almost 30 years investment experience, I can say with complete confidence that many baby boomers, the parents of Gen Yers, are in a financial mess.”
What, then, should Millennials do then?
Talking to their parents is not inherently bad, so long as that is not their sole source. “Of course, there’s a difference between receiving [parental] advice and relying solely on the advice given,” says Kristen Robinson, senior vice president of Fidelity Investments’ women and young investors’ products. “Gen Y should listen to what parents have to say. But at the end of the day, financial decisions are personal matters and best made after carefully considering a number of factors and doing research.”
From Millennials: Stop Taking Financial Advice From Mom and Dad — she concludes that Millennials really need to do is find ethical professionals for help.
So, how do they do this?
They search the internet of things, of course! But, wait, is that how to find truly ethical professionals? Yes, if you search with care.
Look for: Credentials – check out their bio, are they CFP, JD, or CPA? these are a good start to validation of the advisor; Content – are they providing original advice that is sound, helpful? Website design – professional, kept up-to-date? Clients – who is using them for advice?; References – who is willing to put their own reputation at stake for this website?; Community – who are their partners and advisors?; Followers, fans, subscribers and user testimonials – more validation; Website design – professional, kept up-to-date? Avoid: Tacky websites, “smell test” – if it “smells bad,” then it probably is; Old content and closed comments; Too many ads and pop up pop up ads directing you to buy life insurance, etc.; No links to anyone you have ever heard of ...For example, companies like
LearnVest and
Workable Wealth provide general advice to educate before you pay. Workable Wealth has stated in blog post the hope that educating will lessen the stress of handling your finances.Disclaimer: Our soon-to-be-launched website intends to offer advice with no hidden agenda, and be judged on providing the planning advice and tools Millennials need.
