6 super finance tips from 3 generations of earners, savers, and investors


By Chancellor

At some point in your life, you may have had a conversation with a member of your family that really stuck with you.

It could have been a grandparent, parent, or even your child – and in those conversations, you may have realised that those who grew up in another time period might have vastly different life experiences that you can learn from.

When you turn your attention to the financial side of things, it’s easy to assume that other generations just “don’t get” your financial concerns or aspirations. But actually, those who have had different experiences to you might be able to offer a helpful alternative perspective.

So, if you’re searching for ways to view your money in a new way, here are six finance tips from three generations of savers, earners, and investors.

 

The silent generation

Those who grew up between 1924 and 1945 lived through some unimaginable experiences of war, rations, uncertainty, and chaos. They became known as the “silent generation” due to having grown up in a time when many were voiceless against the evils of the world.

In the 2020s, we live in a different kind of uncertainty, largely centred around financial instability and climate change. As such, there’s plenty we can learn about finance from the silent generation.

Here are two tips to consider.

1. Frugality is an essential life skill

Some people are naturally more frugal than others, but if there’s one thing that those who grew up in times of war can teach us, it’s that being careful with money is an essential life skill.

The cost of living crisis has proved that living frugally is an important habit not just reserved for more extreme times such as war. Being able to cut back on non-essentials means you could live within your means even in a time of high prices, helping you to preserve more of your wealth for the future.

2. Don’t let uncertainty stop you from being financially disciplined

The last four years have been extremely uncertain for most of us. Covid, the cost of living crisis, and ongoing regional conflicts could have made you feel worried about the future, and may have altered your life in ways you did not expect.

However, as the silent generation knows better than anyone, it’s important not to let uncertainty prevent you from being financially savvy.

In fact, the opposite could be true: while there are many things happening in the world that you can’t control, you have power over your financial behaviours. So, it could help to let the chaos of the world fuel your financial discipline rather than interrupt it.

 

The baby boomer generation

“Baby boomers” are those born between 1946 and 1964. They are so named due to the boom in the birth rate after the second world war was over.

While this generation is often considered to have “had it easy” due to the abundant educational and employment opportunities they may have experienced in the 1970s, 80s, and 90s, there is still wisdom to be gained from baby boomers.

1. It’s never too early to start saving

According to Moneyfarm research, the average boomer has more than £40,000 in savings, compared to Generation X (people born later), who have around £12,000, and millennials who have nearly £6,000.

As such, this generation is a testament to the benefits of compound interest and returns. Paying into your pension pot, making regular savings, and investing over the long term could help you to grow your wealth substantially over the many years of your career.

2. Prioritise your retirement

Thanks to the ample savings opportunities baby boomers have experienced, many have had the privilege of choosing their retirement date. And while other generations may think that boomers “have it easy”, their focus on retirement could teach us all a thing or two.

After all, most people plan to retire at some point – so why not prioritise your retirement date from an early age?

Some steps you could take to set retirement goals include:

  • Maintaining or boosting your pension contributions where possible
  • Making additional investments over the long term, including using Individual Savings Accounts (ISAs) to grow your money tax-efficiently
  • Create a retirement plan years in advance with the help of a financial adviser.

Taking a leaf out of the baby boomer generation’s book could make you more optimistic and goal-oriented when approaching your finances.

 

Generation Z

You may be surprised to see “Gen Z” contribute to a list of finance tips.

After all, the generation born between 1996 and 2012 are often considered spoiled and out of touch by older people – but when it comes to money, Gen Z have a lot figured out already. Let’s take a look at the wisdom they have to offer.

1. Start investing early in life

If you think back to when you were 21 or younger, ask yourself: “Was I already carefully investing my money in a diverse range of assets?” The likely answer is “no” – but the younger generations are different.

According to research published by FTAdviser, 80% of Gen Z have begun investing before they turn 21.

With so many avenues for investing online in 2024, it is no surprise that the younger generations are taking the opportunity to earn money from it where they can.

Of course, there are drawbacks to online trading without taking advice first – some of these young people may be putting their money at unnecessary risk, for instance – but the message remains clear: investing early could help you create financial stability later in life.

Holding assets over the long term could offer your investments the chance to ride out any market volatility and see sustainable returns.

2. You are in control of your financial future

If there’s one inspiring thing that Gen Z can teach us all, it’s that they know how to take control of their money, especially when it comes to how they earn it.

According to Fortune, Gen Z are fast becoming accustomed to today’s unstable job market, and have responded by making their own “side hustles” – 40% of this generation have another form of income on top of their regular job.

Gen Z’s protectiveness over how they make their money could serve as motivation for other generations to be proactive about their wealth. Even if you live a comfortable life now, ensuring you are doing enough to create a stable future as well is extremely important.

 

Get in touch

Here at Chancellor, we are proud to work with individuals of all generations and backgrounds, along with multigenerational families who all have a role to play in securing their financial future.

To find out more about how we can help, email info@chancellorfinancial.co.uk, or call 01204 526 846 to speak to an adviser.

If you’re already a client here at Chancellor, contact your personal financial adviser to discuss any of the content you’ve read in this article.

 

Please note

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance.

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts. 

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.