When I was Your Age… A look into the future of personal finance.
Generation Alpha is the next up-and-coming generation, being those who were born between the dates of 2010 and 2024. Those born in 2010 are already in high school and have grown up in a fully-digital landscape when it comes to finance and alongside such tech as Cryptocurrencies, Tap-to-pay, digital device integrations, and more. They are in-tune to such things and they come as second nature alternatives to traditional financial options.
There are several things to consider when we talk about the future of personal finance and we’re specifically targeting Gen Alpha with this one, and parents of these “mini-millennials” need to adapt to the ever-changing landscape to help keep them fiscally secure and responsible.
Digital Financial Integration
Make sure to discuss with your kids the purpose of online banking regulations and procedures and the history of how these have evolved over time, so they understand the Why’s and How’s of their apps and browser platforms. In our time, we’ve gone from just being able to call into a touch-tone system to get our balances only to being able to conduct major financial transactions in moments over the internet.
Alternative Currencies
Consider how cryptocurrencies, digital currencies, and alternative payment systems might become part of personal finance. Digital lenders are integrating their services into apps and websites offering flexible payments over time instead of a lump sum-up front, and these may seem tempting, but they are at their very base, a loan service which requires you to pay interest, will run your credit, and more. Helping your child understand the very basics of what a loan is, how it affects your credit, and the importance of prompt payments can instill in them the knowledge to recognize things like this for what they are instead of just “another payment option.”
Automated Financial Management
AI and payment automation are already playing a part in the financial system, offering hands-free payments and advice skimmed from large libraries of information to inform financial advice that may (or may not) be helpful. Automatic payments are incredibly helpful for those who are absent-minded or lead a busy lifestyle in keeping up with their bills and payments, but you must have the money in the account for it to work properly, of course. It’s not a lending platform. AI is still learning and growing from us every day and it will be exciting to see where it goes from here.
Changed Retirement Landscape
Millennials and Gen Z have had to adjust to the so-called “hustle culture” to supplement their regular full-time work, often resulting in secondary streams of income to help make ends meet in a tough economy. Gen Alpha may very well have a similar, if not more dramatic, adjustment including income from multiple streams and the possible elimination of traditional “retirement”. As the landscape changes, we all will have to adjust our lifestyles!
Financial Education
In summary, the rise of environmentalism with reaction to climate change, subscription-based models for many products and services, and hyper-personalize advertising modeled by AI and algorithms will only add more obstacles to personal financial stability without the proper education to recognize them for what they are at their most basic form. Knowing how emotions and preferences can shape our spending habits and how your own preferences affect your credit score and future prospects is so incredibly important as well. Take the time to become educated in personal finance and to sit down with your kids and discuss money in a real, educated way.
If you find yourself lacking in the knowledge yourself, please take advantage of our free financial education resources provided on our website or make an appointment to come in and have a face-to-face with our free financial counselor, Rusti. She’s here to help you navigate your finances and offer services and products from Your Legacy, your not-for-profit partner in personal banking.
