Younger generations put money goals before relationship goals

September 20, 2023 3:22 PM

A new study from Massachusetts Mutual Life Insurance Company suggests that when it comes to the pursuit of happiness, younger Americans would rather chase financial stability instead of true love.

According to the company's latest Consumer Spending & Saving Index that analyzes investor priorities, Gen Z (65%), millennial (62%) and Gen X (54%) representatives are more likely to say that financial security has a bigger impact on personal happiness than who you marry than are baby boomers (41%) and the Silent Generation (29%).

Researchers say the results suggest a shift in evolving priorities among younger generations who may value economic security and self-sufficiency over strong and enduring relationships.

Despite younger people's conviction that financial stability is essential to their happiness, the survey reveals many are not practicing what they preach. Nearly half (49%) of younger respondents say they are not saving enough to retire at their ideal age, as opposed to just 32% of baby boomers who feel the same way.

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"Investing in yourself through wise financial choices today is a commitment younger people can make to secure a more stable financial future," said Paul LaPiana, a CFP and head of product for MassMutual. "As with most healthy habits, consistency is key. Good financial habits include saving and spending responsibly starting at a young age, increasing retirement contributions and broadening your investment portfolio to unlock a financially secure and prosperous future."

The MassMutual Consumer Spending & Saving Index tracks financial outlooks and behaviors in a changing economic environment. The research was conducted online in August among a nationally representative sample of 1,000 U.S. adults. Research was also conducted with an additional sample of 500 adult Massachusetts residents.

Scroll down for other notable findings from the research.

Millennials are as likely to take financial advice from social media as they are to meet a financial advisor.

Nearly one-third of millennials (31%) and Gen Z (32%) say they have followed financial advice from social media in the last three months. That same number of millennials (31%) and just 21% of Gen Z say they have met with a financial advisor in the past, compared with 58% of baby boomers and 57% of the Silent Generation.

Among those who say they have gotten financial advice from the timeline in the last three months, the most common sources are Instagram (56%), YouTube (54%), Facebook (49%) and TikTok (46%). The social media platforms Twitter/X (22%), LinkedIn (21%) and Reddit (14%) are referenced less often.

Nearly half of Americans planning for retirement say they are behind where they need to be to retire at their ideal retirement age.

More men (52%) report being behind on retirement savings than women (44%), and two-thirds believe that the ideal retirement age is between 60 and 69. More than half of the respondents expect to retire around that age (53%), and another 20% do not ever plan to retire.

Among retired Americans, 43% say that their retirement savings are about what they need; 21% say that they have more than they need, and 29% say they have less than they need.

Americans continue to worry about the impact recent and looming changes in the financial world will have on their day-to-day finances.

However, Americans have become slightly less concerned about the recession, bringing it level with other issues like the American political climate and the 2024 presidential elections.

Consistent with the previous quarter, inflation remains the topic Americans (87%) are most concerned about having an impact on their day-to-day finances. Recession concern falls into a clear second tier of concerns that also includes the fall American political climate, for which concern is comparable to last quarter.

About 75% of Americans are concerned how the 2024 presidential election will impact their finances, with 32% believing it will have a negative impact.

"The most recent findings from the MassMutual Consumer Spending & Saving Index highlight the resolve of the American consumer to build a resilient financial future for themselves and their loved ones despite collective anxiety about anticipated political and macroeconomic headwinds," says LaPiana. "By adapting to evolving market and political trends, including an upcoming presidential election and an evolving global economic landscape, Americans can weather any financial uncertainty that heads our way."

For Americans who have student loan debt, the Supreme Court's ruling is expected to hurt.

Four-fifths of Americans (80%) with student loan debt say the SCOTUS decision to overturn the Biden Student Debt Relief plan will have a negative impact on their finances, compared with just 41% of all Americans, and 32% of Americans without student loan debt.

About 74% of Americans with student loan debt say they plan to reduce spending when student loan payments resume, with 27% saying they plan to reduce spending on luxuries and 47% saying they plan to reduce spending on essentials.

A little more than a third with student loans (36%) have used the funds originally meant for payments to buy consumer goods during the pause.