The Wall Street Journal - 16.03.2020

R4| Monday, March 16, 2020 THE WALL STREET JOURNAL.

My mother didn’t know much

about finances when raising me.

Now, I can help both of us.

Source: Survey for The Wall Street Journal conducted by MarketCast

010203040506070%

IamconfidentthatIwillhave

enoughmoneytoretire

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Ihavesomuchstudentdebtthat

it'sachallengetosave

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Iwanttoinvest,butIdon't

knowwheretobegin

l l l

Iwoulddescribemyselfas

financiallystable

l ll

It'sbettertoputmoneyin

alow-riskinvestment,

evenifreturnsmaybelower lll

I'mfocusedonsavingfor

myemergencyfund

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Ifindtheupsanddownsofthe

stockmarketexciting

l l l

Ifeeloverwhelmedby

financialburdens

l l l

Myupbringinginstilledtheimportance

ofsavingmymoneyatayoungage

l ll

Idon'ttrustfinancialadvisers

l ll

Iamfearfulthatthestock

marketmightcrashagain

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Idonottrustfinancialinstitutions l l l

Youarebetteroffhavingwhatyou

wantnowasyouneverknowwhat

tomorrowbrings

l ll

Idon'talwaysfeellikeIhavea

goodgraspofmyfinances

l l l

IonlysavesothatIcantravel

whennotworking

l l l

InvestorInsight

Howpeopleviewtheirrelationshipwithmoneyandinvesting,bygeneration

GenerationX Millennials Babyboomers

Note: Age based on generation breakdown from the Pew Research Center (Baby boomers, born 1946-64; Generation X,

1965-80; Millennials, 1981-96)

A Guarded

Generation

GIACOMO BAGNARA

Young Money

ASon,aMom

And Money

wear to the experiences they

choose and the companies they

apply to work for.

Mr. Ritzel, who will be mov-

ing to London in September to

study international political

economy and wants to pursue

a career in sustainable invest-

ing, says compensation for him

is important but that he

wouldn’t settle for an em-

ployer that “merely pays

well.”

“I need a place that

takes into account how

its decisions and ac-

tions impact the world

around it,” he says.

Millennials aren’t as

willing to settle as their

parents and are more fo-

cused on living a meaning-

ful life by working fulfilling

jobs, pursuing their passions,

exploring the world and con-

stantly learning to expand

their minds. The need for per-

sonal fulfillment is 3.4 times

higher among them than their

parents, the WSJ survey found.

Life decisions

At the same time, millennials

are delaying traditional life

milestones, including marriage,

homeownership and having

children. Since the 1960s, the

percentage of people aged

18-31 who are married and liv-

ing in their own household has

dropped by more than 50%, ac-

Continued from the prior page

cording to Goldman Sachs. The

cohort has also helped drive

the number of births in the

U.S. to their lowest levels since

the 1980s.

Ms. McGaughey says she

doesn’t think she wants chil-

dren and prefers renting over

owning, as it gives her more

flexibility to change cities and

to experience different neigh-

borhoods. But, like her peers,

she feels a responsibility to

think about the world she will

leave behind to the next gener-

ations and doesn’t want to

make selfish choices with her

money.

“I care about my friends’

and my co-workers’ kids

inheriting a world with

clean water and clean

air, and I am really fo-

cused on working for em-

ployers that care not just

about shareholders but

about their social responsi-

bility,” says Ms. McGaughey,

adding that she feels proud

of being part of a company

that is working toward get-

ting the B Corp certification,

which is issued by nonprofit B

Lab to companies that meet

certain sustainability criteria.

As she thinks about being

able to invest some day, Ms.

McGaughey says she would

like to support companies that

care about sustainability or

that have a lot of women in

leadership roles.

“I feel a moral obligation to

put my money where my val-

ues are,” she says.

Ms. SardonisaWallStreet

Journal reporter in Barcelona.

Shecanbereachedat

[email protected].

• 
  

JOURNAL REPORT |MILLENNIALS & MONEY

L

AST CHRISTMASwas like any other

Christmas back in my Mississippi

hometown. My mom, who had pulled

her annual all-nighter to engineer the

holiday feast, had finally plopped

down onto the living-room love seat

to take her turn opening presents.

When she opened the $200 in gift cards to

Ross and Marshall’s that I had gotten her,

however, her excited “Woooo!” left me with

some complicated feelings.

I was thrilled to make the woman who

birthed, raised and loved me smile. Still, I

couldn’t help but wonder what else I could—or

should—be doing for her. As a recent widow

who is approaching the reality of living on So-

cial Security, what did her savings look like?

Without a second household income, how was

she dealing with her monthly bills?

The truth was, I had no idea. Like so many

people of my generation, I had never talked in-

depth to my parents about their finances. And

this gets to the heart of my complicated feel-

ings over the gift cards. As happy as they

made my mom, there was another, longer-last-

ing present I should have thrown in there:

some of the financial

know-how that I’m only

now picking up in my 30s.

It isn’t as if I’m an ex-

pert, either. One of the

pitfalls of not talking to

your parents about fi-

nances—compounded

when your parents never

had those conversations

withtheirparents—is that

the lack of financial acu-

men is passed on, genera-

tion to generation. I’ve ex-

perienced the

ramifications of that since I graduated from

college nearly a decade ago.

Fortunately, it’s also something I have

been determined to address. My friends and I

discuss financial literacy often, trying to fill

in what we didn’t learn from our parents. We

share articles and podcasts about budgeting

and investing; we shoot each other messages

about tips we’ve learned and strategies to

pursue.

Now, if we don’t, in turn, have some of

those conversations with our parents, we miss

out on this incredible opportunity to pay them

back for raising us the best they could with

the resources at their disposal.

As my mom said recently in response to my

question about what she wanted to teach me

about money as a kid: “In our family, we have

always lived paycheck to paycheck,” which she

felt made it hard to save, let alone teach me

about saving.

Living paycheck to paycheck? That was cer-

tainly news to me.

My mom, a former public-school educator

like my dad, made sure that my brother and I

never went without a meal, new outfits for the

first day of school or even cable TV. My par-

ents had provided a comfortable living for

their children, insulating us from the worri-

some and complicated world of credit cards,

mortgage payments and consolidation loans.

But the problem with pretending everything

was OK—tucking away tough money talk for

the moments after she had tucked us into

our beds—is that we never learned what she

never learned before we were thrust into

that world ourselves.

And it is impossible for me, a black man

from the deep South, to grapple with this

situation without acknowledging how much

more dire it is for the African-American

community. Studies show that while there

have been modest strides in closing the ra-

cial wealth gap in the U.S., there’s still much

to be done to overcome the litany of policies

and the institutional racism that have left

African-Americans more economically vul-

nerable, and financially less adept, than

other groups. In a recent personal-finance

assessment conducted by the Global Finan-

cial Literacy Excellence Center at George

Washington University, for example, Afri-

can-Americans scored 17% below whites.

Here’s the catch, though: When we’re just

starting to become financially savvy for our-

selves, many of us are hit with the reality

that we have to become financially savvy for

our parents, too. If we don’t, our parents

aren’t going to be ready for their own retire-

ment. And frankly, if they aren’t ready, the

burden on us might become even greater.

Consider how I felt when I learned that

my mom had long ago withdrawn money

from a previous employer’s 401(k) plan and

has depleted much of her other savings. A

few years ago, I too had cashed out a 401(k),

when I struck out on my own as a freelancer.

If I’d known about Mom’s

experience, it’s far more

likely that I would have

rolled those funds into an

IRA. But now that I’m a

bit more versed in the

workings of 401(k)s, I’m

also in a better place to

consult with mom on her

retirement plans.

This is why buying gift

cards for my mom

seemed to come up short.

In addition to giving her

some immediate enjoy-

ment in her life, I need to do a better job of

making sure she’s prepared for her last earn-

ing years. I’ve asked her, for example, to give

me an update on her finances every couple

of weeks. That will give me more insight on

where I can help, but also on how to help

strategically, so I don’t start eroding my own

limited savings in the process.

In a recent phone call with my mother,

she made an assessment that caught me off

guard. “As black people, you look at living

for the moment,” she said. What she meant,

I later learned, was that—in the context of

her cancer diagnosis, the deluge of medical

bills that dragged down her credit, the heart

attack that took my father, and his neglect-

ing to add her as a beneficiary of his own

retirement savings—too many African-

Americans end up focusing more on simply

surviving financially than living.

To that end, I’m more determined than

ever to get us better at living for the future.

Recently, I’ve taken some small steps, like

adding mom as a beneficiary of my retire-

ment savings, and opening high-yield sav-

ings accounts for us both.

If I’m being honest, I don’t feel fully

equipped for a whole lot else yet, but it’s

OK. We’ll learn together.

Mr. McCorveyis a reporter for The Wall

Street Journal in New York. You can email

him [email protected].

BYJ.J.MCCORVEY

A pitfall of not

talking to your

parents about

finances is that the

lack of financial

acumen is passed on,

generation to

generation.

I frequently discuss personal finances with

my friends. I prefer not to make decisions in

isolation, so my friends and their

perspectives are valuable input in my

decision making. I like being able

to measure my investment and

savings progress against my

friends to help me understand

my progress.”

—Mitchell Bruce,29,

digital medial specialist