If members of Gen Z are able to stay focused on their financial goals in 2025, many of them will have their family and friends to thank.
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According to GOBankingRates’ recently released Financial Head Start Survey, 22% of Gen Zers said using loved ones as accountability partners will be their top choice for staying on target financially in the year to come. Other age groups were less likely to cite family and friends, with the next-highest percentage being 25- to 34-year-olds at 19%.
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Leaning on the People Who Know Them Best
Gen Z — the generation born between 1997 and 2012 — may be on to something. There are multiple reasons to consider leaning on family and friends for financial advice and support, including personalization, trust and affordability.
There are potential cons to the family-and-friends approach over other strategies. Even if they’re well-meaning, your loved ones may lack the financial expertise of trained professionals and may not be up on the latest financial wisdom. They may also have biases or conflicts of interests that could affect the advice they give. It’s still worth considering help from financial pros, online resources and financial planning course.
Proceed with caution, but here are five reasons family and friends may be your best bet for financial advice — followed by some tips if you go this route.
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Family and Friends May Offer More Personalized Guidance
One of the primary advantages of seeking financial advice from family and friends is the personalized guidance and support they can offer. Family members, in particular, have a deep understanding of an individual’s financial goals, values and circumstances, enabling them to provide tailored advice.
For instance, a parent who has navigated the college financial aid process can offer invaluable guidance to their child, helping them to avoid costly mistakes and maximize their financial aid package. Similarly, a friend who has successfully managed their own debt can provide practical tips and advice to someone struggling with similar issues.
They Offer Emotional Support and Empathy
Financial decision-making can be emotionally challenging, and having a supportive network can make all the difference. Family and friends can offer emotional support and empathy, helping individuals to navigate difficult financial situations.
For example, a family member who has experienced financial hardship can offer a listening ear and words of encouragement, helping their loved one to stay motivated and focused on their financial goals. Similarly, a friend who has overcome financial obstacles can provide inspiration and guidance, helping someone to stay on track.
You May Be Able To Trust Family and Friends More
Trust and confidentiality are essential when seeking financial advice. Family and friends are often bound by strong relationships and a sense of loyalty, making it likely that sensitive financial information remains confidential.
In contrast, professional financial advisors may have a fiduciary duty to disclose certain information, and online resources may lack the personal touch and confidentiality that family and friends can offer.
They Offer Practical Experience
Family and friends have likely walked in your financial shoes. They can offer real-world insights that are invaluable in navigating the complexities of personal finance. They may have firsthand experience with financial products, services and strategies, enabling them to provide informed guidance.
For instance, a family member who has invested in the stock market can offer practical advice on how to get started, while a friend who has refinanced their mortgage can provide their insights into the pros and cons of different loan options — all with your particular circumstances in mind.
It’s Probably a Lot Less Expensive
Finally, seeking financial advice from family and friends is often more accessible and affordable than consulting professional advisors. Family members and friends are typically willing to offer guidance and support without charging a fee, making it an attractive option — and sometimes the only option — for those on a tight budget.
Tips for Seeking Financial Advice From Family and Friends
If you’re considering seeking financial advice from family and friends, here are some tips to keep in mind:
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Choose trusted individuals: Select family members and friends who are financially savvy and have a track record of making smart financial decisions.
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Be open and honest: Share your financial goals, concerns and circumstances with your trusted network to ensure they can provide personalized guidance.
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Seek diverse perspectives: Consult with a broad range of people to gain a well-rounded understanding of different financial strategies and options.
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Verify information: While your loved ones can offer valuable insights, it’s essential to verify information through reputable sources to ensure accuracy and completeness.
Methodology: GOBankingRates surveyed 1,001 Americans aged 18 and older from across the country between Oct. 17 and Oct. 22, 2024, asking twelve different questions: (1) What is your main financial goal for 2025?; (2) How do you plan on keeping yourself focused on your financial goal in 2025?; (3) If you’re planning to retire in 2025, what is your main financial concern?; (4) How much debt do you have?; (5) How do you plan on paying down your debt in 2025?; (6) How much time do you expect to spend planning your budget per month in 2025?; (7) Currently, what percentage of time do you stick to your budget?; (8) How much do you have in your emergency fund?; (9) How much do you expect to add to your emergency fund in 2025?; (10) How many months of your expenses do you have saved?; (11) What financial resources are you incorporating into your personal finances in 2025?; and (12) What’s your main financial concern going into 2025?. GOBankingRates used PureSpectrum’s survey platform to conduct the poll.
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This article originally appeared on GOBankingRates.com: Gen Z Leans on Friends and Family To Meet Money Goals — 5 Reasons You Should, Too
