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Millennial parents want their Generation Alpha children to be financially successful.
As more millennials become parents, they’re keener than ever to raise their children on one thing: financial security.
These children are part of Generation Alpha, the post-Generation Z generation that the new Morning Consult report defines as children under the age of nine. The majority of the 2,000 Generation Alpha parents surveyed (70 %) are millennials.
Morning Consult used cluster analysis to identify three core groups of Generation Alpha parents “based on what they said were the most important factors when thinking about parenting,” the report said. Idealists were the wealthiest group, while pragmatists were the oldest and had the most Gen X parents. Younger, millennial parents are the most common, showing what Generation Alpha parents will be overall as millennials become parents, the report said.
Their preoccupation with their children’s financial success shows that the effects of the Great Recession are still lingering on millennials, the oldest of whom turns 42 this year, more than a decade later. Much has been written about the financial plight of generations. Many of the oldest of a generation graduated from the 2008 financial crisis, shouldering huge student loans and facing rising costs of living while struggling to bounce back in a volatile job market. When they finally started to gain financial ground, they were hit by a pandemic and yet another, albeit much smaller, recession. faced real inflation for the first time in his adulthood.
Millennials have had to climb a much steeper slope to achieve the same lifestyle enjoyed by their baby boomer parents. Their wealth has more than doubled his since the pandemic began, but they still hold only 7% of the country’s wealth. They were about the same age, according to Fed data. So it’s no wonder millennials are so worried about making their kids financially successful. Morning Consult found that most people are already looking for financial advice on how best to do that.
“The Great Recession left many millennials disillusioned with the idea of reaching or surpassing their parents’ levels of financial success, and they still struggle with financial confidence,” Morning said. Charlotte Principato, Financial Services Analyst at Consult. luck“They face unexpected and difficult battles at the beginning of their careers and want to better prepare their children for economic uncertainty. We are taking steps to build a strong foundation for
Generation Alpha is already on the road to wealth
According to Morning Consult, most Alpha parents have already opened or plan to open savings accounts for their little Alphas, with general savings accounts and college savings accounts top of the list. It’s above. Many of those who have already checked off the list did so before their child was her 4, but those who plan to do so are usually waiting for their child to be 10 or older. Some Alpha parents (less than 10% each) have already opened her CD account, money market account and IRA or Roth IRA for their child. Just over 20% of each plan to open one in the future.
Alpha parents struggle with student loan debt for their education and are more willing than all parents under the age of 18 to pay for their children’s higher education (Morning Consult found this A cohort of 1,000 people were surveyed). for comparison): 39% vs 35%.
Not surprising for a generation that isn’t afraid to talk about money. Over half of parents are already discussing spending, savings, budgeting, and different types of money such as cash and credit with their children. Often this happened before the child was four years old, but these discussions became more likely as the child got older.
“Parents are encouraging their children to become financially independent faster,” says the report.
However, despite financial uncertainty, most Generation Alpha parents (77%) are very or somewhat confident in their children’s future financial security.
“Generation Alpha parents may be more concerned about their own finances, but the same cannot be said for their children’s finances,” says the report. “These parents are doing their best to future-proof their children’s wallets, and this planning and preparation has led to confidence in their offspring’s financial future.”
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