Can Baby Boomers Show Millennials How to Avoid FOMO and Debt Before it’s Too Late?Apr 21, 2015
Recent research shows that Millennials are affected by FOMO more than any other generation and many could be overspending and accumulating debt in order to make their fears go away. What is FOMO? FOMO stands for the Fear of Missing Out and can be thought of as the modern, digitally-influenced version of ‘Keeping Up with the Joneses’.
For parents of Millennials, FOMO could be contagious
Millennials who are connected to their social circles though Facebook, Instagram and Twitter are constantly exposed to images of their friends, and the products and life experiences those friends are spending their money on. Prompted by these images, and the desire to not miss out or lose social status, many Millennials are spending increasing amounts on travel, fine dining and luxury goods. Surprisingly, parents of Millennials may also be spending and accumulating debt in order to make sure that their son or daughter is ‘keeping up’. Research shows that many parents are using their retirement savings to financially help their adult son or daughter. Increasingly, parents are even helping Millennials finance their first house, and it’s costing them quite a bit to do so.
Be a financial role model
If you are the parent of a Millennial, you may also be tempted to overspend so that your adult child can enjoy the things that their friends have. It’s not hard to see why many parents feel the desire to do this. However, it’s important to consider that, as a parent, you have the opportunity to act as a financial role model and can help them avoid overspending and debt problems due to FOMO.
Let’s talk FOMO
Broaching the subject of financial responsibilities with your adult children can be challenging. Consider scheduling an informal family meeting for a general discussion about spending habits, lifestyle affordability, and debt. Of course, this is an ideal opportunity to review your own spending and saving habits. Discuss the importance of budgeting with them, including how to create a workable, real-life budget that they can stick to. If they are willing, it’s also a good idea to talk and help them create financial goals that focus on the present and the future.
Discussing debt options for debt reduction is another way that you can be a financial role model and help your adult children manage the debts they already carry. Start by sharing with them the strategies you use for debt repayment. Although they are likely aware of the problems that can occur when you ‘live large’ and overspend, it may also be a good idea to discuss what could happen if their debt becomes unmanageable. This could, for example, include a discussion about debt relief options such as debt consolidation loans, consumer proposals and the process of filing for personal bankruptcy.
In reality, FOMO is not that different from “Keeping Up With the Joneses” – a phenomenon that the Boomer generation is quite familiar with. If your Millennial son or daughter is facing financial challenges as a result of FOMO-inspired overspending, take the opportunity to help them face their fears. Missing out on an experience once in a while is well worth the feeling of being debt free and in control of your finances.
Are you a good financial role model for your son or daughter? How do you help Millennials fight FOMO and avoid overspending and debt? #LetsTalkFOMO