Why mom and dad’s advice is still so important
You can’t put a pricetag on mom and dad’s spending advice.
If given $1,000, about 50% of millennials say they’d consult their parents for spending advice before blowing their dough, according to a new survey conducted by marketing agency Element Three and market research firm Smari.
So why are these adult spenders still calling up mom and dad prior to shelling out their Benjamins?
Sometimes it’s because they trust their parents’ insight more than their own. That’s the case for 26-year-old Kristie Covey of Denver, who owns party supply website Party Fueler. When she bought her last car, Covey’s parents steered her away from the fancy Lexus, to buy a less expensive Mazda CX5 for $30,000 instead, saving her about $20,000. Covey said she knew their insight would help her make a financially savvy decision: “My parents…are really frugal people and they encouraged me to be the same.”
And asking the parents for guidance on a purchase might even mean they’ll help you buy it: When Covey also turned to mom and dad for help when buying a sofa after graduating from Bradley University, they slapped down their credit card to buy the $3,000 couch from Ashley Furniture for her — though they did require her to pay it back in a timely manner — which she did — and negotiate with the store for a price break. The result was a discount of $800, bringing the total to $2200 for her chocolate brown leather sofa.
Without them, “I honestly don’t think I would have saved,” she confessed. “It was really helpful to have that money; at the time I was trying to put just about everything I could toward student loan payments,” a $15,000 expense which she also paid off within 18 months.
Asked if she’d turn to them again for advice on larger purchases like a home, “I definitely would,” she said. “I think I’d be able to gain a lot from hearing about their experiences and some problems they might have run into, and hopefully avoid them too.” She added that they recently helped her brother through the process of buying his first home, including guiding him through obtaining a mortgage.
For her part, 23-year-old Mia, a fashion industry professional in New York City who asked that Moneyish withhold her last name, recently turned to her mom for advice on the purchase of a $2,300 Saint Laurent Paris handbag. “She told me to make sure I really love it because it’s an investment piece, and if I would actually wear it. Some bags you keep, but could you really wear this one on a daily basis?” her mom asked her.
Ultimately, Mia pulled the trigger on the purchase — but her mom said that, “I have to be sure because that is a lot of money… I don’t shop often, but when I do shop, I usually know what I want exactly. I’d rather save up for it.”
Stories like these are why millennial spenders like Covey suggests that others in her age range consult their parents for advice on larger purchases, too.
“Whether it’s parents or another adult parental figure, they’ve had a million experiences and acquired all different kinds of knowledge that we might not yet have,” she concluded. “So, if they’re willing to help out and give their advice, it’s bound to be helpful — and might even save you a big chunk of money.”
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