Generations are a way to demographically categorize cohorts of the population in terms of the period which they were born. Each generation was influenced by different factors including education, environmental, social, and cultural factors, and the age at which experiences occurred. For example, several different generations lived through the COVID-19 pandemic, but its impact varied between generations. The relevant social generations are listed in the table below.

With the generations defined, we can observe some interesting differences between the cohorts (Pew Research Center, 2015):

From oldest to newest generation, each generation:

• Is more racially diverse (white population: 57% of Millennials, 78% of Silents).
• Is more supportive of marijuana legalization (68% of Millennials, 29% of Silents).
• Is more supportive of same-sex marriage (70% of Millennials, 39% of Silents).
• Has lower marriage rates (64% of Silents, 28% of Millennials married by 33 years old).
• Is less religious (35% of Millennials, 11% of Silents religiously unaffiliated).
• Is more liberal/democratic leaning.

When considering financial concepts, each generation is also different; here are some key differences regarding personal finances between generations (Adam, 2023):

• Millennials are most likely to have grown up in a family that discussed household finances (73%).
• The sentiment around family discussions about household finances was most stressful for Baby Boomers (21%).
• When assessing the reasons why people don’t like to discuss personal finance, the majority of Baby Boomers said it was because ‘money is personal’, while the driving factor for Millennials was ‘insecurity about finances’.
• Millennials and Gen Xers are much more willing to discuss their compensation with others than Baby Boomers.
• Millennials are the most likely generation to lie to friends, family, and coworkers about their salary.

Being equipped with the knowledge of generational differences can help us to better understand how we behave and how those around us behave and view personal finance. Learning that Baby Boomers are most secretive about finances and feel that money is a personal topic reaffirmed my personal experience interacting with people from this generation regarding personal finances. It also makes sense that financial conversations in Baby Boomers’ homes were much more stress-driven since this generation began in the years following the great depression and World War II. Learning that Millennials are the most insecure about personal finances seems to make sense knowing that they also lie the most about their income. The insecurity about their financial situation is causing them to embellish their income when speaking to others.

Personal finances can be a difficult subject for many to speak about for various reasons including trust, insecurity, or a feeling that the topic is personal and off-limits. Although you may not feel this way, be respectful of other peoples’ circumstances and understand if they are not willing to speak about financial matters with you. Personally, I am very open and willing to speak about personal finance with others, but I seldom find people as enthusiastic about the topic! According to Adam (2023), Millennials are the generation most willing to discuss personal finance matters, so maybe I will try to focus my financial enthusiasm on people in this cohort when starting conversations at the next party!

References:

Adam, J. (2023, September 29). Millennials and Generation Z Are More Likely To Discuss Salary Than Older Generations. Millennials and Generation Z Are More Likely To Discuss Salary Than Older Generations. https://www.forbes.com/advisor/banking/talking-about-money-by-generation/

Dimock, M. (2019, January 17). Defining generations: Where Millennials end and Generation Z begins. Pew Research Center. https://www.pewresearch.org/fact-tank/2019/01/17/where-millennials-end-and-generation-z-begins/

Pew Research Center. (2015). The Whys and Hows of Generations Research (p. 16). Pew Research Center. https://www.pewresearch.org/wp-content/uploads/sites/4/2015/09/09-3-2015-Generations-explainer-release.pdf