How millennials and Gen Z are planning for their financial futures

Enjoy complimentary access to top ideas and insights — selected by our editors.

As millennials and members of Generation Z think about their future finances, they are looking to save as well as previous generations, but they face an economic climate that has seen two one-in-a-lifetime downturns.

Erika.com founder Erika Kullberg, a lawyer and personal finance expert with more than 21 million followers across social media platforms, said she is not surprised that younger generations’ wealth is expanding. Millennials and Gen Zers are “actively seeking out opportunities to increase their wealth through various means,” even though they’re “facing formidable economic challenges such as student loan debt and stagnant wages relative to the rising cost of living,” Kullberg said in an email to Financial Planning’s Tobias Salinger.

“I’ve observed a strong entrepreneurial spirit and a willingness to explore alternative avenues for financial growth,” Kulberg added. “Many are leveraging technology and digital platforms to start businesses, invest in stocks and cryptocurrencies, and engage in side hustles. The increasing accessibility of financial education resources, both online and offline, has empowered them to make informed decisions about their money and investments. Younger generations have endless financial advice and information at their fingertips.”

READ MORE: For Gen X, reality bites when it comes to retirement

Younger clients are lacking in their knowledge of estate planning. According to research from Trust & Will, only 58% of millennials said they had ever discussed estate planning with an older family member, and 34% had no idea whether their parents have an estate plan.

“Estate planning is typically one of the last aspects of financial planning people want to discuss,” Den Murley, a partner at Belonging Wealth Management in Longview, Texas, told Financial Planning’s Nathan Place. “First, people generally don’t like to think of their own mortality, regardless of age. Second, there may be a mindset that death is a distant, far-away event and there is plenty of time to get everything in order.”

Added to this, Samuel Deane, financial advisor and president of Deane Wealth Management, said many millennials — as well as other generations — have mistaken notions about what estate planning entails and who it’s for.

“There are lots of misconceptions about estate planning,” Deane told Financial Planning. “One of the things that we hear is, ‘Hey, I’m young, I’m single, I don’t have any kids, which means I don’t need an estate plan.’ Or ‘I don’t have significant assets or wealth, so I don’t need a trust.'”

READ MORE: 6 tips for advisors to responsibly engage on social media

Read more about how different generations are preparing for retirement.