The current economic climate is putting a strain on younger generations, who are just starting their careers or looking to purchase their first homes. A recent survey found that more than half of Americans believe that money can buy happiness, with 72% of millennials and 67% of Gen Z agreeing with this sentiment.
Financial happiness, according to the survey respondents, means not having to rely on anyone else financially and being able to withstand unexpected expenses while taking care of loved ones. However, with inflation and the cost of borrowing still high, 67% of respondents feel that their income isn’t keeping up with inflation, and 42% feel that their standard of living is deteriorating.
Many young Americans are relying on their parents for financial support, with multigenerational living arrangements on the rise. Additionally, some young adults have needed financial aid from their loved ones to purchase their first homes. The survey also found that more than a fifth of Americans used a cash gift or loan from family or friends for their down payment.
With prices rising and student loan payments resuming, more Americans are feeling the weight of their debts and are emphasizing the importance of paying off bills on time and in full. About 65% of respondents associate financial happiness with being debt-free.
While having more money can help young Americans move from living paycheck to paycheck to being able to comfortably spend on small luxuries, it’s not just about having extra cash. A good work-life balance is also important for happiness, with 58% of Gen Z and 55% of millennials emphasizing its importance. Additionally, it’s crucial to learn how to manage money wisely to avoid re-entering a cycle of debt by adjusting expenses to match income levels.
The survey found that over six in 10 respondents believe it’s crucial to get good money advice in order to achieve financial happiness. Whether preparing for retirement or trying to pay off debts, a financial adviser can help evaluate the situation and get individuals on track to meeting their financial goals.
It’s important to recognize that some individuals have a more complicated relationship with money. Having the funds doesn’t necessarily alleviate stress about spending, and it’s important to address any issues that may be impacting financial happiness.
Overall, while having more money can contribute to financial happiness, it’s not the only factor. Achieving a good work-life balance, managing money wisely, and addressing any underlying issues with money are all important aspects of financial well-being for younger generations.