How did you decide where to open your first bank account? Where did you learn to budget or pay bills? If you have a money question now, what do you do? Who do you turn to?
If you’re under the age of 30, your answers to the above questions are likely some combination of “my parents”, “the Internet” and “I don’t know—I just kind of figured it out”. Although you might have been lucky enough to take life skills classes in high school, most young adults don’t receive any kind of formal financial education. So, it’s likely that you’ll need to seek guidance when it comes to money management.
That guidance can come from any combination of sources: family, friends, apps, blogs, classes, forums, financial institutions, articles, books—the list goes on. No source is inherently better than the others, as long as it empowers you financially. But the reality is that when it comes to getting financial advice, most of us have a comfort zone or a pattern we fall into: we ask mom and dad because that’s how we’ve always done it, or we start with an online search because we’re not comfortable with asking someone for help. Your default information sources say a lot about you and your values, and even though each source has good things going for it, it’s important to keep an open mind. Your financial health can always benefit from including new sources of advice.
Advice Source: Parents and Family Members
What it says about you: Responsibility is important to you, and you believe that big decisions should only be shared with people you absolutely trust.
Why it’s great: Recent studies have found that 49% of Millennials turn to their parents for financial advice. It’s not hard to see why—family members have a trust factor that just can’t be rivaled by any financial institution. They’ve known you literally forever and they truly have your best interests at heart. They’re familiar and accessible and, since they’ve guided you through most aspects of life, it makes sense that they guide you through your finances too.
Where it’s lacking: No two families are alike. In some households, money is talked about casually and in others the topic is totally taboo. Some parents are fully involved in teaching their children about money; others get stressed out even thinking about it. Parents are an excellent resource if they’re money-savvy and if they’re comfortable talking to you about finances. If that’s not the case, then you might want to look for other sources of financial information before consulting with mom and dad.
Advice Source: Financial Advisor or Financial Planner
What it says about you: You value expertise in decision-making, and you’re not afraid to ask for help from a professional.
Why it’s great: Whether you consult with an advisor at your financial institution or hire an advisor independently, it’s hard to top the results you get from working with a dedicated professional. Having an expert assess your financial situation and design a plan for you is an extremely powerful tool because they can recommend products, services and strategies that you might never have come across on your own.
Where it’s lacking: Many young adults shy away from this advice source. One possible reason is because, as helpful as a financial advisor can be, reaching out to one can be intimidating if you’re used to your finances being a very private matter. Maybe you feel embarrassed about your current level of financial understanding, or maybe you’re not used to talking about money. Using some other sources on this list to gather information before meeting with a planner can help you feel in control and better prepared.
Advice Source: Personal Finance Blogs/Online Forums
What it says about you: You value privacy when it comes to your finances, and you know that research is critical before making any important decisions.
Why it’s great: It’s fast, it’s specific and it’s private—the Internet is great for financial guidance. Some helpful online resources include your credit union’s website, personal finance blogs geared toward your life stage, personal finance sections on news sites, and FAQ sections or forums on popular financial websites.
Where it’s lacking: As with all online content, you need to have a critical eye when gathering data. Who’s the author of the content? What’s their motivation? Is this review biased? Is that research trustworthy? When you use the Internet as your go-to information source, it’s up to you to sift through all the sites and articles to find the content that’s most relevant to you. Getting a second opinion (or better yet, a professional opinion) on a topic you’ve been researching is a great way to get more comprehensive advice.