Comparing oneself to one's parents is one way that a lot of individuals gauge how well they're doing in life.
After all, your future success in life may be highly influenced by your parents' financial circumstances. Many different types of families share the desire to outperform them. However, not too many individuals are succeeding in that endeavor these days.
Furthermore, compared to their older and younger counterparts, many persons in their prime earning years were more likely to report feeling worse off than their parents, according to the poll. (Photo : by Kenny Eliason / Unsplash)
Intergenerational Financial Trends
Since the 1940s, the percentage of people who go on to earn more than their parents has been continuously falling. In fact, according to Opportunity Insights study, just 50% of those born in 1980 have grown up to earn more than their parents, compared with 90% of persons born in the 1940s.
According to CNBC's International Your Money Financial Security Survey conducted by SurveyMonkey, It makes sense that just 36.5% of individuals say they believe they're better off financially than their parents. 42.8% of respondents believe they are in worse shape than their parents, compared to 20.7% who believe their situation is roughly the same.
Furthermore, compared to their older and younger counterparts, many persons in their prime earning years were more likely to report feeling worse off than their parents, according to the poll.
Among individuals aged 18 to 34, 38.2% express feeling worse off financially than their parents, while in the age group of 35 to 65, this sentiment is reported by 49.8% of respondents. For those aged 65 and older, 32.7% share the view of being worse off financially compared to their parents.
In general, middle-aged individuals feel worse off than their parents for a variety of reasons, though every household is different. Additionally, there are a few reasons that things might not be as terrible as they appear.
These factors indicate that younger generations are less financially secure than older generations.
Salary Stagnation
When adjusted for inflation, salaries in the U.S. have scarcely budged since the 1970s. Strong incomes have lost a significant amount of their purchasing power since inflation has caused prices to rise.
Although Gen Xers and Millennials' wages today may be comparable to those of their parents at the same age, the former group's earnings were far higher.
Unachievable House Ownership
Many would-be homeowners, particularly millennials, find it nearly impossible to purchase a home due to the constant increase in property prices. According to recent Clever research, property prices in the United States are 24 times greater in 2024 than they were in 1963.
Being a property owner doesn't automatically translate into financial security or well-being. You could feel worse off, though, if, at your age, your parents had a home and you cannot purchase one, even though your income is equal to or more than theirs.
High Tuition Fees and Debt Among Students
The younger generations are paying far more for college education, even if they are more likely than their parents to have gone. According to Bankrate, the price of attending a four-year college has increased by 153% during the last 40 years.
According to the Education Data Initiative, Gen X and millennials together account for approximately 87% of the nation's outstanding student loan load, with Gen X alone owning 57% of the total. At $44,290, Gen X borrowers also have the largest average loan debt.
According to a CNBC study, 42% of parents believe their children will be in a better financial condition than they are, while being pessimistic about their own circumstances. Among those 35 to 64 years old, that percentage falls to 40%.
Present-day parents are even more inclined to be optimistic about their kids' futures: 59% of respondents with children in the study said their kids will have better financial opportunities. Just 1 in 5 parents believe that things will get worse for their kids.
Those children could benefit from an inheritance by building on their parents' financial success and getting a head start. More than 75% of those surveyed indicate they intend to provide money in their will for their future children.
It's not the most important thing to leave that money behind, though. 43% of parents questioned said that the most crucial thing for their child to have a better financial result is for them to get a stable employment. The next most significant factor (20%) was a fully paid education, which was followed by an inheritance (15%).
