It is no secret that money management styles differ greatly between generations. The gap can be pretty wide between baby boomers and millennials, who often have entirely different outlooks on the world and finances.
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Baby boomers, many of whom have enjoyed unparalleled wealth, may still have a few things to learn from their younger counterparts. Here are four money habits many millennials have that baby boomers should copy.
Also see seven money habits baby boomers have that millennials should copy.
Forgoing the Pricey House
While baby boomers came of age during a time when houses were affordable, millennials have faced a number of obstacles to homeownership. From the 2008 financial crisis to skyrocketing housing costs and high mortgage rates, an increasing number of millennials are opting to rent.
According to Apartment List, only 47% of millennials are homeowners. Additionally, they’re buying homes much later than boomers did at the same age. By age 30, only 33% of millennials owned homes, compared with 48% of boomers.
While unaffordable housing may be a contributing factor, renting does present unique opportunities that may be enticing to baby boomers. Renters have more flexibility, including the ability to downsize more easily. They can choose to quickly relocate to an area with a lower cost of living and are less reliant on the housing market to dictate their next move. Boomers who sell their home and then opt to rent may also have a sizable chunk of change to help fund their preferred retirement lifestyle.
Be Aware: 10 Things Boomers Won’t Be Able To Afford in Less Than a Decade
Cutting the Cord
Millennials had no problem cutting the cord to cable TV as streaming options became available. Boomers, however, are not so easily convinced.
In fact, according to Pew Research Center, 92% of those between the ages of 30 and 49 have streaming services compared with only 65% of those who are 65 or older. Additionally, boomers are most likely to say they have a cable or satellite subscription, per Pew.
As millennials know, choosing an alternative can save hundreds of dollars each month.
Not Relying on Pensions or Social Security
Millennials understand that safety nets, once guaranteed during retirement, may not exist when they reach their golden years. Employers have largely replaced traditional pensions with 401(k) plans or other defined contribution plans, and concerns persist about the solvency of Social Security.
According to the Committee for a Responsible Federal Budget, the Old Age and Survivors Insurance trust fund could be insolvent by 2033, which could lead to benefit cuts. With this ominous outlook, many millennials rely on self-funded retirement instead of government programs. Boomers, particularly younger ones, may want to take note. Relying solely on these programs could mean a reduced income at some point in retirement.
Talking About Money
Another key difference between boomers and millennials is their willingness to openly discuss money. For many boomers, income and other financial topics were likely not appropriate dinner conversations. Today, however, younger generations are significantly more willing to discuss money issues.
Transparency can help everyone involved, whether it’s telling loved ones about wealth plans or being honest with a partner about the current state of personal finances.
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This article originally appeared on GOBankingRates.com: 4 Money Habits Millennials Have That Baby Boomers Should Copy
