Copyright Forbes
On one hand it feels like current generations have never been further apart—from media consumption, to language, to tech, to work styles, things are changing quickly. On the other hand, we are more deeply enmeshed in each other’s financial lives than ever. Last summer, a friend’s 19-year-old daughter recently drove back across the country to college; a conversation ensued about how to help the daughter purchase a new car so that she could get the benefit of building a credit score without having to take out a credit card (deemed terrifying by the college student.) The result: A car lease with a cosigned agreement. Another friend, now in her 50s, is in the process of taking control over her aging mother’s finances and navigating a career on top of the financial decisions that come with eldercare. These are common experiences, but financial products are not typically built with these overlapping generational needs in mind. Households Are in This Together One in four U.S. adults lives in a household with three or more generations, making it a missed opportunity not to weave together services and products for multiple generations. Since 2000, the number of children living with at least one grandparent has increased by more than 36%, with one in eight living in multigenerational or “skip-generational” households. What this might look like: a Baby Boomer grandparent relying on Social Security for at least half their income, a millennial parent still saving for their first home (potentially delaying significant retirement savings), and a Gen Z child who faces skyrocketing higher education costs and an uncertain AI-dominated job future. Each member of this hypothetical household faces their own challenges and opportunities, but they are also financially supportive and interdependent. The financial health of one generation affects that of others. MORE FOR YOU Financially secure parents are better positioned to invest in their children’s educations, can facilitate homeownership or help with childcare that can now top $19,000 a year, and can foster social networks that create access to opportunity. Younger people who enter the workforce on financially sound footing are then better positioned to take advantage of wealth-building opportunities. And those caring for parents and/or children are more able to do so when they are financially strong. Each decade has brought its own innovations that impact our financial health. Credit cards became mainstream in the 1970s, while the 1980s brought the 401(k) revolution, shifting retirement responsibility to individuals. Student debt exploded in the 1990s, impacting every generation that followed. The past 20 years have brought vast technological change, with mobile banking, payment platforms, and budgeting apps fundamentally altering our relationships with money. This next decade can bring much-needed innovation to blend all the needs of households more seamlessly. Getting Out of the Silo Rather than putting products and services in siloes for specific populations or generations, financial services providers should be designing and delivering them from the vantage of how families operate. Providers have a key role in helping families manage interdependence. They can broaden and blend access by enabling multiple authorized users on different accounts. They can also help signal to all of those authorized users when scam-like activity is detected, so everyone is in the know more quickly before further damage is done. When banks, fintechs and other providers embed joint ownership or multiple authorized users on accounts, they are providing tools for better decision making. This is particularly useful as different generations grow more or less financially dependent and need different levels of engagement. Employers also have an important role with the benefits they offer. While those benefits are offered to individual workers, they often provide support to families across generations. For instance, caregivers who have access to paid family leave benefits through their employer have higher financial health scores than those who don’t—yet fewer than half of employers offer this benefit. Childcare subsidies offered by an employer also have a significant positive financial health impact on families. As people live longer, we need to reassess our assumptions about financial health and better understand the intergenerational context in which people make financial decisions. This is the first time in history that society has experienced six generations present in the workforce simultaneously. As people live longer, we need to reassess our assumptions about financial health and better understand the intergenerational context in which people make financial decisions. It also calls for a new way of thinking, one that looks beyond isolated problems and solutions to consider our realities of interdependence and financial strain across generations—and the need to design for a stronger financial future.
