U.S. News and World Report published a set of data this week suggesting that young adults (between 18 and 34) are more financially responsible than older generations.
Check out two lists U.S. News publishes with those stats: one with the tips young adults offer for financial health, and one published for young adults about how to stay financially sane.
Here’s what young adults recommend, if you’re looking for guidance from these whippersnappers:
1. Decide on your goals after reflecting on the previous year.
2. Share your plans with others.
3. Take small steps.
4. Earn extra money.
5. Budget by the year.
6. Ramp up retirement savings.
Compare that to the (presumably evolving) set of recommendations the older, established financial set suggests for this same age group:
1. Save 1/3 of your income.
2. Don’t scrimp on career-related investments.
3. Cultivate your most ambitious dreams.
4. Pay off all but your cheapest student loans early.
5. Don’t wait to invest until you have the “extra” money.
6. Give back–on your own terms.
It seems like young people are trying to steel themselves for market uncertainty. But older generations, themselves victims of cyclic uncertainty, seem to be encouraging kids to live our dreams and save the best we can on the side.
The lesson, it seems, that older investors want to share is that we can’t really hedge against uncertainty, so we might as well embrace it and enjoy the ride. If we can’t do anything to diminish risk, why not go with the flow? (See this piece for an illustration of harsh financial consequences probably unintended and unforeseen by lawmakers.)
Which advice will you take?