Gen Y turn to parents for advice

Many Millennials have different financial priorities than your average clients.

Saving for the long term is important for younger Canadians, but many also have to pay down student debts and cover daily expenses such as monthly bills and outings with friends, finds a recent TD survey.

What’s more, they’re not sure whom to turn to for financial advice. Since parents and friends often offer tips, only a third turn to advisors.

Read: Advising Gen Y

However, young people who do work with advisors say they’re more likely to have money left over each month to put toward their financial goals, says the survey.

“Parents have a lot of wisdom to pass along, but [there’s a] wide variety of financial products and services available today,” says Raymond Chun, senior vice president, of everyday banking, personal & indirect lending at TD Canada Trust. So, “it’s understandable they might not have all of the answers.”

Budgeting tips are easy to pass on, he adds, but the economic realities facing younger Canadians are shifting. That’s why Gen Y needs the right blend of professional and family help.

Read: Don’t discount Gen Y

Take Casie Stewart, a 31-year-old social media specialist and blogger who spent five years paying off her student debt. She found her parents were good role models, but conceded that their tips didn’t always apply to her situation.

“My parents always taught me to save,” she says, “but that’s difficult when you don’t have much money coming in.” Since Stewart needed help managing her debt, she sought an advisor who’d worked with younger clients.

Read: Gen Y clients aren’t average consumers

“I [then] set a goal to be debt free by 30,” she says. “For five years, I made monthly payments and never missed one. It was…helpful to keep that five-year goal in mind, and now [have] different financial goals.”

Here are some tips on how to assist Gen Y clients:

Document spending for a month. You’ll have a much better idea of how your new client is spending money if you help them track her spending. Then, if she needs to, help her cut back on expenses by getting her to allocate a maximum monthly spend in some areas, such as entertainment.

Check in often. It’s important to revisit and revise budgets as young clients’ financial situations evolve. If your client’s income, lifestyle or goals change, set a meeting to go over her finances. This may occur more often with younger people who are building careers, businesses and/or families.

Automate saving. Encourage them to automatically transfer set amounts into a savings account each week. The starting amount doesn’t matter since the exercise is more about developing good habits.