https://www.cwbwealth.com/en/news-and-stories/insights/future-proof-your-family-engaging-gen-y-and-z-in-financial-literacy
Imagine having a blueprint that empowers your children and secures your family legacy for generations to come. In my experience, financial literacy does this. It isn’t just about understanding how money works—it’s the key to independence, opportunity, and security. In helping Generation Y, also known as Millennials (born 1981-1996), and Z (born 1997-2012) with their financial literacy, parents and other family members can help them build a sustainable future while securing the family legacy.
As a first-generation immigrant, I saw the power of financial awareness early on. In our family, financial decisions were often left to men, but I took control of my own finances. My parents taught us to save and value money, which paved the way for my financial independence. Today, as a portfolio manager, I encourage families to make financial literacy a shared mission. Support from parents and family members, along with guidance from trusted advisors, can move younger adults toward making more confident and informed financial choices.
As a result, up to 79% of Gens Y and Z are now turning to online influencers (AKA “finfluencers”) for guidance—but these sources can be unreliable. Early education in money management can significantly help these generations develop healthier financial habits and reduce the anxiety they often feel.
They also turn to social media apps like TikTok for advice from influencers, but these may lack depth or accuracy. Many influencers prioritize catchy content over accuracy due to time constraints and the need to engage quickly. They often oversimplify topics, lack context, and provide misleading advice which can result in poor financial decisions for viewers.
Solution – Trusted advisors can connect with this generation using simple language and practical tools. I welcome the chance to educate my clients’ children on finances, offering flexible opportunities for them to ask me questions and engage at their own pace. When they’re ready, I show them the power of having goals and using a roadmap to get there. Parents and their advisors can jointly start young people on a path to feeling more confident about taking charge of their finances.
Solution – Parents and family members should share their own financial experiences openly. Let younger adults know that everyone (including their parents) faces financial challenges from budgeting to managing debt. This honesty can make young people feel more comfortable seeking advice. I encourage my clients to share personal stories or lessons they’ve learned—including their financial mistakes! They can also expose their children to financial concepts from a young age.
My husband and I taught our children the value of a dollar early on. We set up bank accounts for them and taught them how to make deposits. As they got older, we regularly shared growth on the investment accounts we’d started for them, which were funded by their allowance earnings and gifts from family. This piqued their interest in their financial future.
Solution – I teach my clients’ children that budgeting is the foundation of financial well-being. And I encourage parents to help their children distinguish between essential and discretionary spending (need vs want), showing them how to track income and expenses. For Gen Z, budgeting as soon as they have income can provide essential skills before they move out. For Gen Y, who might already be independent, the focus can shift to balancing cash flow and saving for future goals.
Both generations should be cautioned about overextending themselves—leave some room for a rainy day! Budgeting takes time, patience and focus on short and long-term goals. Working with an advisor can help keep them on track as it’s easy to get derailed.
You don’t need to have all the answers to engage in conversations with these generations. Connecting them with your dedicated Private Wealth Advisor can ensure they get trusted guidance and a reliable roadmap. By investing in the financial knowledge of the next generation, your family can create a legacy of financial wellness and peace of mind.
Sources: PYMNTS, Yahoo Finance, WalletHub
Information presented herein is for discussion and illustrative purposes only and is not a recommendation or an offer or solicitation to buy or sell any securities. Views expressed are as of the date indicated, based on the information available at that time, and may change based on market and other conditions. Unless otherwise noted, the opinions provided are those of the authors and not necessarily those of CWB Wealth Management Ltd. (CWB Wealth) or its affiliates. CWB Wealth does not assume any duty to update any of the information. Investment decisions should be based on an individual’s own goals, time horizon, and tolerance for risk. Information herein is intended to provide qualified or accredited investors, or their advisors, with general information and is not, and under no circumstances is to be construed as, a prospectus or advertisement or a public offering of the securities of pooled funds offered by CWB Wealth. Any such offer or solicitation shall only be made at the time a qualified or accredited investor, in those jurisdictions where permitted by law, receives the Confidential Offering Memorandum, or other offering documents as applicable, relating to the respective pooled fund. Nothing in this content should be considered to be legal or tax advice and you are encouraged to consult your own lawyer, accountant or other advisor before making any financial decision. Investors should consult their financial advisor before making a decision as to whether mutual funds are a suitable investment for them. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus, which contains detailed investment information, before investing. Mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated.
CWB Wealth uses third parties to provide certain data used to produce this report. We believe the data to be accurate, however, cannot guarantee its accuracy. Visit https://www.cwbwealth.com/disclosures for the full disclaimer.
As a first-generation immigrant, I saw the power of financial awareness early on. In our family, financial decisions were often left to men, but I took control of my own finances. My parents taught us to save and value money, which paved the way for my financial independence. Today, as a portfolio manager, I encourage families to make financial literacy a shared mission. Support from parents and family members, along with guidance from trusted advisors, can move younger adults toward making more confident and informed financial choices.
Why financial literacy matters for Gens Y and Z
Gen Y and Z face unprecedented financial obstacles like high living costs, student debt, and uncertain job markets. According to the New York Post, Gen Z is poised to make up to 27% of the workforce by 2025, yet they remain the least financially confident. Studies like WalletHub’s show that over one-quarter of Gen Z lacks confidence in their financial understanding, which is exacerbated by limited financial education in schools.As a result, up to 79% of Gens Y and Z are now turning to online influencers (AKA “finfluencers”) for guidance—but these sources can be unreliable. Early education in money management can significantly help these generations develop healthier financial habits and reduce the anxiety they often feel.
Overcoming common barriers to financial literacy
Attention spans and immediate gratification
Barrier – Budgeting and financial education can feel overwhelming or tedious for younger generations. They seek out, and are drawn to, solutions that offer immediate satisfaction—qualities often lacking in traditional financial institutions. While investment apps can provide some accessible solutions, they aren’t comprehensive.They also turn to social media apps like TikTok for advice from influencers, but these may lack depth or accuracy. Many influencers prioritize catchy content over accuracy due to time constraints and the need to engage quickly. They often oversimplify topics, lack context, and provide misleading advice which can result in poor financial decisions for viewers.
Solution – Trusted advisors can connect with this generation using simple language and practical tools. I welcome the chance to educate my clients’ children on finances, offering flexible opportunities for them to ask me questions and engage at their own pace. When they’re ready, I show them the power of having goals and using a roadmap to get there. Parents and their advisors can jointly start young people on a path to feeling more confident about taking charge of their finances.
Lack of transparency
Barrier – Parents often want to protect their children from financial struggles, which can unintentionally leave them unprepared for real-world challenges. Without witnessing financial ups and downs, young adults may feel ill-equipped to handle their own.Solution – Parents and family members should share their own financial experiences openly. Let younger adults know that everyone (including their parents) faces financial challenges from budgeting to managing debt. This honesty can make young people feel more comfortable seeking advice. I encourage my clients to share personal stories or lessons they’ve learned—including their financial mistakes! They can also expose their children to financial concepts from a young age.
My husband and I taught our children the value of a dollar early on. We set up bank accounts for them and taught them how to make deposits. As they got older, we regularly shared growth on the investment accounts we’d started for them, which were funded by their allowance earnings and gifts from family. This piqued their interest in their financial future.
Overreliance on the bank of Mom & Dad
Barrier – From living expenses to help with car payments, relying on parents for financial support can delay financial independence. When young adults transition to full responsibility, the adjustment can be overwhelming. People often tell me that when they got to post-secondary school or went out on their own, they were blindsided by things like how to use a credit card or manage money. And having their parents pay for things like phone bills and school expenses had the unintended consequence of giving them a false perception about budgeting.Solution – I teach my clients’ children that budgeting is the foundation of financial well-being. And I encourage parents to help their children distinguish between essential and discretionary spending (need vs want), showing them how to track income and expenses. For Gen Z, budgeting as soon as they have income can provide essential skills before they move out. For Gen Y, who might already be independent, the focus can shift to balancing cash flow and saving for future goals.
Both generations should be cautioned about overextending themselves—leave some room for a rainy day! Budgeting takes time, patience and focus on short and long-term goals. Working with an advisor can help keep them on track as it’s easy to get derailed.
Opportunities for Gen Y and Z and their families
Regardless of where younger generations stand in terms of their interest in finances, it’s worth imparting the value of financial literacy as a life skill. Think of it as a gift and start with small talks about money and planning for their future. These can spark an interest in bigger conversations.
I help facilitate personalized and practical conversations with my clients’ children, like how to save for a car, understand investment basics, or maximize employer benefits. Some things I focus on are:
- Building interest in saving by showing how investments can grow over time
- Taking advantage of employer benefits, like stock purchase plans or RRSP matching
- Understanding the benefits of different accounts, like TFSAs, RRSPs, or the new First Home Savings Account (FHSA)
Resources for these generations
Getting started with financial literacy can be overwhelming, so using reliable resources is key. Some of the ones I recommend are:- Budget planners and calculators: Tools from CWB and CRA provide an accessible way to build budgeting skills, making it easier to track finances.
- Trusted financial resources: I introduce clients to podcasts, in-house proprietary tools and other resources to help alleviate the overwhelm of finding resources they can trust.
- Mutual funds and pre-high-net-worth accounts: Suitable for entry-level investors, these accounts can help Gen Y and Z start investing with manageable options. I guide my clients’ children in making the most of resources like Canadian Western Financial (CWF). As a Private Wealth Advisor, I can connect pre-high-net-worth relationships with a CWF Wealth Advisor to ensure my clients’ children are engaged in a goals-based financial plan, tailored to their unique needs
Empowering future generations
In a world that’s changing quickly, the gift of financial literacy can give Gen Y and Z confidence and control by providing a foundation for future independence and security. Families can start by fostering open conversations about finances, to give younger generations real-world perspective that helps them build good habits.You don’t need to have all the answers to engage in conversations with these generations. Connecting them with your dedicated Private Wealth Advisor can ensure they get trusted guidance and a reliable roadmap. By investing in the financial knowledge of the next generation, your family can create a legacy of financial wellness and peace of mind.
Sources: PYMNTS, Yahoo Finance, WalletHub
Information presented herein is for discussion and illustrative purposes only and is not a recommendation or an offer or solicitation to buy or sell any securities. Views expressed are as of the date indicated, based on the information available at that time, and may change based on market and other conditions. Unless otherwise noted, the opinions provided are those of the authors and not necessarily those of CWB Wealth Management Ltd. (CWB Wealth) or its affiliates. CWB Wealth does not assume any duty to update any of the information. Investment decisions should be based on an individual’s own goals, time horizon, and tolerance for risk. Information herein is intended to provide qualified or accredited investors, or their advisors, with general information and is not, and under no circumstances is to be construed as, a prospectus or advertisement or a public offering of the securities of pooled funds offered by CWB Wealth. Any such offer or solicitation shall only be made at the time a qualified or accredited investor, in those jurisdictions where permitted by law, receives the Confidential Offering Memorandum, or other offering documents as applicable, relating to the respective pooled fund. Nothing in this content should be considered to be legal or tax advice and you are encouraged to consult your own lawyer, accountant or other advisor before making any financial decision. Investors should consult their financial advisor before making a decision as to whether mutual funds are a suitable investment for them. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus, which contains detailed investment information, before investing. Mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated.
CWB Wealth uses third parties to provide certain data used to produce this report. We believe the data to be accurate, however, cannot guarantee its accuracy. Visit https://www.cwbwealth.com/disclosures for the full disclaimer.