“Use your youth so that you may have comfort to remember it when it has forsaken you, and not sigh and grieve at the account thereof.”
Sir Walter Raleigh
Born after 2010, Generation Alpha represents the youngest generation of consumers, and they will outnumber Baby Boomers in a few years. More than digital natives, Alphas are endowed with meta, crypto and automation knowledge. Yet, they still seek survival skills that are unique to their physical-digital-meta existence. Generation Alpha will share multiple identities across metas, and seek to connect with other people and institutions through all media, some of which haven’t yet been invented.
Financial Literacy Among Generation Alpha
Alphas face an increasingly difficult global financial environment. The COVID pandemic exposed gaps in financial literacy. The global instability fortified the importance of fit financial fundamentals for Generation Alpha, who want full ownership of their personal budgets, earnings, savings and investments.
The 2022 Investopedia Financial Literacy Survey revealed that Generation Z feels the least educated in financial matters. Millennials are the most attuned to savings, investing, and crypto, while focusing on their credit scores. Gen X is more centered on retirement funds. Baby Boomers are using their years of experience to retain and protect their nest eggs in retirement.
Your kids will not gain financial literacy in school. Only 16 states currently require students to take an economics or personal finance-related course. This number has been flat for years, and is unlikely to grow while the Alphas advance through elementary, junior high, and high school. However, they will likely take STEM courses, learn coding, and experience more visual, multimodal and hands-on methods than previous generations. All of this can equip them to succeed in the workforce and as entrepreneurs.
As a Dad, it’s important that you talk to them about money, dissuade stress and fears, and give them the knowledge and tools to succeed. As your kids learn on TikTok or YouTube, they’ll lean on your guidance as a backbone of their financial fluency. Experts advise that Dads and their partners should understand crypto, investing, saving and budgeting to hold conversations that deliver meaning and value to the younger generations.
It’s inevitable that Generation Alpha will face a crisis on a global scale. Look at the recent pandemic, the housing market crash and Great Recession, and as far back as the World Wars and Wall Street crashes of 1929 and 1987. Every generation has been forced to weather a seismic calamity of worldwide proportions. Alphas could face a worldwide cyber-terror attack, crypto crashes, wars, and pandemics, to name a few. You cannot avoid this, but as a Dad you can enable your kids to survive and succeed in spite of these massive challenges by providing them with knowledge and esteem to keep moving forward.
Digital World
Alpha generation kids will rely on recos from friends and web influencers and make purchases using digital currency. AI and Machine Learning (ML) will automate their money management and purchases. TikTok and YouTube will me primary sources for knowledge and exploration about money.
They may never exchange money for goods and services using physical cash. It may not be fiat, meaning government issued money, but Alphas will utilize the same instruments as their great grandparents among newer models (again, some of which haven’t yet been invented).
Investing
Women of Generation Alpha will lead the way. They are less intimated, influenced and stressed about money than their male counterparts. Furthermore, women in Generation Alpha will open investment and banking accounts even earlier than Generation Z and young Millenials who are already opening these accounts a decade earlier than their gereiatric Millenial and Gen X counterparts.
“Cryptocurrency and stocks are the most popular assets held by Gen Z, millennial, and Gen X investors” per Investopedia. It’s realistic to assume Generation Alpha will follow suit.
Did you know April is Financial Literacy Month?
This is a great time to kick off conversations with your kids about personal finance. Use the Spring season to open a debit account with digital-first solutions like FamZoo or Chase First Banking for kids; discuss chores and allowance using apps like Greenlight and gohenry; and start micro-investing through Fractional Shares with Schwab and Betterment.
As a parent, you can set up your will, a 529 plan and trust for a child, all of which will save for your inevitable death, your kids’ schooling and for use in the future. Visit these posts to learn more:
What is a 529 Plan for your Kid?
Set Up Your Will, Your Kids Will Thank You
Money Moves to Make for Your Kids
April may be the special financial literacy month, but every day, week, and month is a great opportunity to teach your kids, talk to them, and fill them with the strength, smarts and grit to succeed as the next great Generation – as Alphas, that is.
