Breaking the Mold: Gen Z & Millennials Forge New Paths to Wealth Beyond Their Parents’ Playbook

A young woman looking at her phone happily while sitting on the couch.

This isn’t your father’s financial strategy. Nearly 30% of Gen Z and millennials are putting their parents’ financial practices out to pasture. It’s not that they don’t want to honor them – they simply can’t afford to.

A recent Bankrate survey reveals a generational shift in financial habits. 38% of Gen Z and millennials face greater difficulty accumulating wealth. Factors like student loans, child-care costs, and a volatile housing market create harsh realities. As a result, more younger Americans chart their own course.

While some stick to traditional methods like homeownership, others prioritize career advancement, side hustles, and even investing.

Homeownership Takes a Backseat for Younger Generations

The study finds that 45% of Gen Z and 36% of millennials who own homes now regret their purchase due to unforeseen financial burdens, compared to only 26% of Gen X and 22% of baby boomers.

Another recent study from Empower reveals a fascinating generational shift in views on wealth building, with surprising implications for the future. While 59% of baby boomers still cling to homeownership as the path to financial freedom, younger generations see things differently, and 60% are less likely to view homeownership as essential for building wealth.

Factors like soaring housing costs and evolving priorities majorly drive this change. Skyrocketing property prices and hidden costs of owning a house make the traditional “starter home” a distant dream for many young people.

Also, Gen Z values flexibility and mobility more than their predecessors. They are less bound to the idea of rootedness and are more open to alternative lifestyles like renting or nomadic living.

Investing and Career Moves Take Center Stage

Gen Z and millennials are shaping their financial futures through career advancement and side hustles. The study shows they are more likely than older generations to seek raises, switch jobs, or pursue side gigs

Bolstered by their tech-savviness, 53% of Gen Z and 50% of millennials earn extra income through side hustles, compared to 40% of Gen X and 24% of baby boomers.

Also, a recent survey by Bank of America echoes the Gen Z focus on growth and career advancement. It reveals that 36% focus on furthering their education, while 31% prioritize career advancement, salary increases, and exploring new job opportunities.

Higher salaries and better long-term prospects were the main drivers for Gen Z job seekers. Additionally, 32% saw their new positions as a step up in their careers, demonstrating a desire for growth and upward mobility.

The younger generation is surprisingly responsible when it comes to retirement planning. A recent study revealed that 66% of Gen Z and 78% of millennial workers are already saving for their golden years through employer-sponsored 401(k)s and outside investments.

A Desire for Wealth and a Need for Guidance

Despite facing economic challenges, younger Americans remain ambitious about building wealth. The study reveals that 33% of Gen Z and millennials wish they knew more about investing, and 33% consider wealth-building a top priority. 

Gen Z is laser-focused on building wealth, with a substantial 62% of the younger population deeming it essential compared to a negligible 3% who don't. Financial security and planning are their top priorities, evident in their diverse strategies: 47% meticulously budget and track expenses; in contrast, others embrace side gigs or explore investments to diversify their income streams.

However, this ambition comes with a need for guidance. Friends and family remain the primary source of financial advice for all generations, but 44% of Gen Z and 36% of millennials rely on them more than older generations.

Nearly 80% of Americans in the Gen Z and millennial age group seek financial advice from social media, while only 11% work with professional financial advisers.

Younger Americans are forging their financial paths, navigating a complex economic landscape that differs from their parents' experience. While exploring alternative wealth-building strategies, they also face challenges and uncertainties. 

To ensure their financial success, they need access to reliable guidance and a focus on long-term goals. This shift in financial attitudes and priorities calls for a tailored approach to financial education and support for the next generation.

This article was produced by Media Decision and syndicated by Wealth of Geeks.

Author: Chhavi Agarwal

Bio:

Chhavi is a lawyer who quit her job to become a full-time work-from-home blogger. She shares tips and tricks on making money online, side hustles, freelancing, and blogging through her blog, Mrs. Daaku Studio. Besides blogging, she works as a freelance coach and shares her expertise on YouTube and Instagram. When not blogging, she is traveling, sketching, or doing yoga.