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Generational Gaps Grow with Work and Money Outlook

Practice Management

Compared to their older counterparts, younger generations are demonstrating notable shifts in attitude about work, life and saving, taking drastic measures to bring balance to their lives, a new survey finds.  

While Millennials and Gen Z are attracted to more flexible ways of working, they are far more likely than Gen X or Baby Boomers to turn to gig work, go into debt or receive financial support from relatives to meet their financial goals, according to Prudential Financial’s latest Pulse research survey, “Generational Gap Grows: Work & Money Outlook Divided.”

Perhaps not surprisingly, younger generations continue to drive the so-called Great Resignation. One-third of Millennials and 46% of Gen Z have switched employers since the start of the pandemic—compared to 29% of all workers.

Younger generations are more likely to say that the best way to increase their earning potential is to change employers every few years, with 41% of Millennial workers and 44% of Gen Z workers expressing this belief, compared to 36% of all workers.

Conversely, job flexibility is an important factor, according to the findings. Over the past year, roughly 3 in 10 (29%) Millennials who switched jobs took a pay cut, with more than 1 in 4 Millennials who took a pay cut explaining they did so in order to achieve a better work/life balance.

Younger generations also are looking to employers for help. Nearly 6 in 10 Gen Z (58%) and Millennial (57%) workers believe their employer has a responsibility to help them feel more financially empowered.

“Millennials are acutely attuned to the benefits of a hybrid working model,” says Prudential Vice Chair Rob Falzon. “The biggest opportunity for employers is to fully embrace this new era and redefine the workplace to best meet the needs of employees—regardless of where they are in their lives.”

Competing Priorities

According to the survey, 70% of hybrid workers report feeling a strong sense of loyalty to their employer, compared to 64% of in-person and 59% of remote workers. Hybrid workers are also more likely to say they feel fairly compensated for the work they do (68%) and that the benefits their employer provides are tailored to their individual needs (64%).

Yet, many Americans also report their main source of income is not enough to pay the bills or save for the future, Prudential notes. Nearly half of Millennials (49%) and Gen Z (48%) don’t believe that a salary is going to be enough to achieve their financial goals. As such, turning to gig work, going into debt, or receiving financial support from relatives to close the gap has become the norm: 

Growth in gig work: 70% of all workers have pursued or considered pursuing gig work to supplement their income over the past year. This is even higher among Gen Z (81%) and Millennials (77%)—roughly a quarter of whom hope that their gig work will one day be their full-time job. However, most workers who are considering or are pursuing gig work (34%) say they are only doing it until their main source of income can fully sustain their financial needs.

Looking to others for financial help: Half of Millennials say they regularly run out of money and have to rely on credit cards or family for financial support, and 65% of Millennials and Gen Z have received financial support in the past two years from either parents, significant others, relatives or grandparents.

No emergency savings funds: 50% of all respondents have less than $500 or no emergency savings fund. Nearly 4 in 10 (39%) of both Millennials and Gen Z report having no emergency savings at all.

Debt taking a toll: 55% of Millennials say that debt is preventing them from accomplishing personal goals, such as owning a home and having kids; 33% of Millennials and 32% of Gen Z say student loan debt is a barrier to accomplishing those personal goals.

Not keeping a budget or prioritizing investing: Nearly 70% of Millennials and Gen Z do not keep a formal budget; 44% of Gen Z and 38% of Millennials do not invest.

“Without keeping an eye on finances, it can be easy for good spending and savings habits to slip. As a Millennial myself, I know how tough it can be to balance financial responsibility with having a social life,” explains Brandon Goldstein, Financial Planner with Prudential Financial. “That’s why it’s imperative to assess and prioritize what’s critical, so you can stick within your budget and not lose sight of your long-term financial goals, too.”

The survey was conducted on behalf of Prudential by Morning Consult from Sept. 29 to Oct. 1, 2022, among a national sample of 4,796 self-identified adults.