From Taboo to TMI? Millennials Seek Financial Advice from Each Other, Not Experts

whispering

“How much do you make?”

“How much debt do you have?”

“Where do you spend your money?”

These are all questions which may have once been considered unspoken territory among young peers. But in an interesting switch, money talk seems to have become the norm for Millennials. A recent study by the American Institute of CPAs and the Ad Council reveals that young folks are looking towards their friends and peers to help them make financial decisions. That means that they’re matching the spending habits and saving habits of their peers, for better or worse.

These new findings are both positive and disconcerting. The taboo of speaking about finances has melted away but the risk of misinformation is a very real consequence. If young people are getting their financial cues from their friends that means there is a greater potential for getting information that is skewed or downright incorrect. After all, finances are complicated and it’s uncommon for anyone to know all the details. That’s why people use financial advisors and/or counselors in the first place.

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So let’s take a look at what young people can do to make sure they get the best of both of both worlds when it comes to financial advice:

Yes, It’s A Great Idea to Talk to Your Peers About Your Finances

For generations, people have operated under the assumption that it’s rude to speak of finances with others. However, actually being open about your struggles and questions with your friends and family can lead to a place of comfort and support as well as ideas you never would have had on your own. Adding money talk into conversations with your friends and colleagues can be one of the most important ways to develop a healthy relationship with finance.

However, it’s not up to your best friend to provide you with the actions or advice you need to have a secure financial future. As you would do to solve any major problem in your life, you need to do your research so you can make decisions that will ensure a rock solid financial future.

However, There Are Many Other Places to Seek Information

Relying on friends alone can be a dangerous practice. Your friends will naturally have a different set of circumstances than you (even if marginally) and they may also hold different financial values than you. It’s almost like playing the game of telephone with your financial future. While the financial advice may have started out with the best intent in mind, the actual message could become warped over time. In a world of sharing and advising, “you should…” can actually do more harm than the more stark “here are a few of your options…

So what are some of your options and where can you seek the information to supplement your existing financial information?

Blogs, Websites, etc.

To start out with, there is a wealth of information online. There are plenty of websites that are created with the sole purpose of spreading information and financial literacy. The danger here lies in the sheer amount of information you can access. Before you take action or trust a particular site, make sure that they are accredited and trustworthy. Reviews online, awards, or certifications can help you to determine if they’re giving unbiased information or are looking to sway you into making choices that will benefit their own goals. For example, websites that prompt you to pay for advice or buy a product that may not be useful to your specific needs should be avoided.

Older Generations

One of the best ways to learn is from experience and exposure. And those ahead of you on the timeline of life naturally have that greater exposure. Not only can you learn from their successes but you can also learn from their mistakes. It’s easy to think that we can do everything on our own, but that limits our ability to take others’ experience into account.

Consider the advice of those older than you as the advice of someone who may have created a trail in the woods (and maybe even gotten lost a few times in the process) and therefore has a valuable perspective on the journey ahead.

Financial Professionals

To find a good financial professional, you’ll want to seek out a professional who understands your specific desires and goals. Then make sure that they are properly licensed and don’t have negative reviews from others. Even if you absolutely hate dealing with your finances, putting blind faith into another person has its risks. If you do engage with professional advice, be engaged, ask questions look at the numbers, and above all feel comfortable with the choices that are being made. If you don’t understand what’s happening with your money, or why one choice might be better than another, ask questions until you do understand.

All these modes are at the discretion of the individual. Everyone has a different comfort level with what help they seek and what information they share. But the ultimate goal is having the proper information so that you can effectively weigh your options. Talking to your friends can help to put your options in perspective, but ultimately it’s you who has the power to make your own decisions. Knowledge is not only empowering, it’s an essential tool for the stability of your future finances.

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