By Cyril Tuohy
When millennials seek financial advice — having lived through low wages, high unemployment and heavy debt loads — they look for guidance in budgeting, saving for school and managing student loans, a recent TIAA-CREF survey shows.
For many members of Generation Y, budgeting is difficult and that’s why they need help, Amy Podzius, director of the Field Consulting Group with TIAA-CREF, said in an interview with InsuranceNewsNet.
Many young adults born between 1980 and 2000 are facing long-term and short-term debt, as well as credit card debt, also known as revolving debt. That means computing principal and interest payments, along with the expenses of daily living, into cash flows.
“Budgeting is big,” said Podzius, herself a member of Generation Y. “Paying off debt is huge — paying down student loans and loan balance.”
For Generation Y, the challenge is “How do I take care of today and make sure I provide for tomorrow,” Podzius said.
The findings, compiled by an independent research firm, were published in TIAA-CREF's annual Gen Y Advice Matters survey of 1,000 adults.
Of those who sought out advice, 72 percent expressed an interest in managing a budget, 65 percent expressed an interest in saving for education and 53 percent said they were most interested in help with student loans.
The survey respondents said parents and personal networks are very important to them as resources for financial advice.
Adults age 18 to 34 were more likely than the general population to involve their parents (47 percent vs. 19 percent), extended family (22 percent vs. 14 percent) and other trusted adults (31 percent vs. 21 percent) in their search for advice, the survey found. In addition, 37 percent also involve a spouse or partner to help with their finances.
Podzius said parents play such an influential financial role in guiding Generation Y because millennials have lived through low wages, relatively high unemployment, high debt loads and a severe financial crisis.
Members of Generation Y, of which there are an estimated 80 million in the United States, have seen economic headwinds affect their families, she said.
Separate surveys show that many millennials are skeptical of Wall Street and big financial institutions.
“A lot of it might come down to skepticism,” Podzius said. “A lot of them say they turn to their immediate network.”
Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. Cyril may be reached at [email protected].
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