In the third episode of our Open Money podcast, Louis Liu and Jennifer Betts talk about how different generations view money differently, and strategies to deal with their emotional undercurrents

There is a lot that influences how we value money, what importance we place upon it and what financial decisions we make. What goes into having a good life and being financially fit is subjective and affected by our society, the economy, and our age and life stage.

Millennials and baby boomers have one thing in common: They are the biggest generational cohorts in history, with most millennials (born between 1981 and 1996) being the children of boomers (born between 1946 and 1964). But they are vastly different from one another – not just in age and life stage but wealth. Baby boomers hold more than 50% of the household wealth in the United States, whereas the equally large cohort of millennials hold just around 6% – and a similar disparity exists in Canada.

The world has been very different for millennials than for boomers, with very different income and career trajectories. Andrea Crisp knew her experience wouldn’t match that of her parents, who both had a single career until retiring. Her mother was a medical secretary and her dad was a police officer. They worked their entire lives in those fields, gathered their pension and retired to Florida. For them, their path was the route to financial stability and living a good life.

Like many millennials, Crisp has taken a different journey. She has had multiple careers and few options for guaranteed pension plans. She was a music teacher, then became a pastor and then pivoted again, reinvesting in her education to become a mindset and empowerment coach. Her parents had trouble understanding why she would switch career paths again, incur debt and disrupt her cash flow.

Louis Liu, a senior wealth advisor at Servus Credit Union, says the primary differences between millennial and boomer financial perspectives have to do with attitudes about debt and their tolerance of risk. Crisp was willing to take a risk and incur debt to further her education in her chosen field. Part of the reason for this greater tolerance of risk is that millennials have more time than boomers to grow their money. Boomers are concerned with how to best manage the money they have accumulated, whereas millennials are concerned with how they will accumulate money, he says.

“Boomers tend to ask … ‘how do I protect myself from risk, and how do I protect my legacy and ensure my loved ones are taken care of in the event that something happens to me?’” Liu says. Millennials, on the other hand, ask their advisors what kinds of long-term investment strategies are at their disposal to grow their money over the next 20 or 30 years.

And, in general, millennials tend to focus more on living life in the here and now, whereas boomers spent their working years looking to the future of retirement.

Because most millennials’ parents are boomers, these differences in mindset can lead to family conflict and misunderstanding.

Jennifer Betts is CEO of both the Calgary and Edmonton Institutes of Counselling and deals with many clients attempting to find common ground with one another.

“The conflicts and challenges that I see arise is that they value things differently. They have different priorities and, because of that, they butt heads often. Some boomers would value paying off their mortgage right away, putting all their money in RRSPs. But then to millennials, it doesn’t matter that they have a mortgage. They want to travel, they want to enjoy life,” she says.

The key, she says, is learning to not only understand the other’s point of view, but to respect it. So, for instance, parents might say they’re glad their child is pursuing their passions but are worried they will have too much debt or be unable to handle life expenses. And the child might say they understand that parental worry is coming from love, but that they want to pursue their life on their own terms and that a retirement safety net might not be their primarily goal.

“It’s about learning to speak the same language. It’s about learning to be heard. But we need to bring down the tensions … open our ears on both sides and hear it from a loving perspective,” Betts says.

Regardless of different approaches to life and money, Liu says both generations should arm themselves with as much financial information as possible and offers this advice to millennials:

“The first thing we need to do is educate ourselves on topics that may seem boring and irrelevant at this stage of our lives. I’m talking about topics like estate and will planning, business succession, insurance, risk management.

“This is going to be relevant to you sooner than you think. Get ahead of it. Think of it as a long-term investment. Ask your advisor for more information and advice on how to approach these topics because one day either you’re going to have to deal with these topics with your parents’ finances … or you’re going to have to prepare for your own. … Trust me, both your parents and your future self is are going to be better off because of it.”

If you want to know more about how you can gain confidence in making financial decisions and find solutions you can feel good about, talk to a Servus Credit Union advisor.


Illustration by Graham Johnson, Curio Studio