The Age of Finance. BB, Generation X, Millennials...

Personal finances change throughout a person's life, and experts recognize 5 periods that are directly linked to their finances:

1- A first period that spans from childhood to 18 or 19 years old, where essential concepts about money usage and savings are learned, usually guided by parents.

2- In the next stage, between 19 and 30 years old, the main concern is personal development for the future, often involving investments in a master's degree, courses, etc. During this stage, individuals begin to think about saving money for the future and make their first investments, sometimes resorting to some form of credit.

3- Between 31 and 45 years old is the stage where the highest incomes are usually received, and other needs related to family, mortgages, etc., often arise, necessitating effective resource management.

4- The following stage, between 46 and 55 years old, is a period of consolidation.

5- From 56 years old, the last stage begins. Over these years, financial burdens decrease as additional responsibilities diminish. Individuals focus on managing their savings and enjoying their investments.

But finances also change over time, from generation to generation.

Baby Boomers, Generation X, Generation Y or Millennials, Generation Z... are the most well-known and they shape the current context, leaving behind a very interesting social and economic analysis due to the enormous generational gap brought about by technological development. Change is inherent to human history, but the speed of change in recent decades leaves us with a diversity never seen before. The qualitative leap is so significant that one could almost speak of different worlds forced to interact. This complexity is also reflected in finances and deserves analysis; we will do it through the characters in the illustration. Let me introduce you to:

Lucía, at the end of the line, 50 years old; in front of her are Pablo, 8 years old, and Juan, his father who just turned 40. In fourth position is María, our grandmother who is around 80, and opposite her waits Clara, in her thirties, and Carlos, 19 years old, approaching his twenties although it may not seem like it. Rarely or never have such different generations lived together:

  - Among the Baby Boomers, born between 1946-1964, is María, who belongs to a time of hope and ambition for change, after a period of difficulties and austerity. Many of them secure a stable and long-term job, which offers them an unknown standard of living, with work becoming a way of being and existing. They do not dedicate much time to leisure and recreational activities. Women of this generation are still entering the job market, but social structures are beginning to break.

Their financial profile can be defined as conservative, with a low level of indebtedness and a risk aversion. Without financial literacy, they rely on their trusted advisor and maintain a high level of loyalty to their lifelong bank.

This generation, completely analog, is left with a world they do not understand due to technology. María probably needs help using the ATM, may learn some basic uses, but struggles to use the card and prefers to continue paying with cash. Many of her age end up delegating their finances to others, usually to their closest relatives.

- Within the Generation X, we have Lucía (1965-1981). They belong to a transition generation that was born into an analog world but also witnessed the emergence of the Internet and major technological advancements of the time. They are marked by significant social changes and the obligation of continuous adaptation, seeking a balance between two worlds. They transfer this balance to their financial management, maintaining a preferably conservative profile but starting to inform themselves and combine delegation to professionals with self-management. Their loyalty level remains quite high, but it is no longer as unconditional and is open to change if circumstances require.

Among their values are effort and dedication to work, and they usually accept institutional hierarchy. Their energy is divided between children, work, and leisure time.

- Generation Y or Millennials (1981-1996). Here we can include both Juan at 40 and Clara in her 30s. In fact, it's normal to find mixed profiles sharing qualities of various generations.

At this stage, they are already fully adapted to technology, with virtual life being an extension of real life. However, they still maintain some privacy codes regarding what they expose or not on the Internet.

They are entrepreneurial and creative, probably the best-prepared generation, but they do not dedicate their lives to work; studies show they stay in their jobs for an average of two years, unlike Generation X and the Baby Boomers. They prioritize other ideals and try to live off what they love to do. We can say they are a disruptive generation in their understanding of life, criticized and admired almost equally.

Enthusiasts of entertainment technology, traveling, and social networks. Their loyalty level is low both in their jobs and in finances. They like to have control over their money management and to know and understand the products they contract. Many are self-taught and keep an open mind to new things; in fact, they have spent much of their lives in a context of financial volatility, where products and relationships are becoming increasingly complex. The difficulties of the job market force them to seek work outside their borders, so they are not in favor of tying themselves with mortgages, even if they can afford it. Their finances are almost entirely online, and they hardly ever visit a bank branch unless absolutely necessary. They are the most active in all kinds of investments, from stock markets to crowdlending. They do not have as much aversion to risk or short-term debt; they live day by day conditioned by the social and economic context they have to live in, defending ethical and ecological values.

This generation represents the largest percentage of investors in INVERSA; most not only want to be able to choose and decide for themselves but also enjoy it. They tend to diversify their financial portfolio a lot and greatly value the democratization of finances.

- Generation Z or "Centennials" (2001 to 2015). They have not entered the workforce yet or have done so sporadically. Carlos masters technology, and part of their life unfolds on the Internet. Creative, over-informed, and even more self-taught than millennials, they consume a lot of tutorials seeking information and entertainment.

We cannot yet speak of a defined labor and financial behavior, but they are heavily influenced by YouTubers at all levels and have no problem in sharing their opinions and experiences on social networks. Their world is online; it's in their DNA, and so will be their finances.

At a professional level, they worry about finding a vocation according to their tastes and an uncertain future marked by crises and instability, contrasting with the high standard of living they grew up with. They are probably also the generation, along with Alpha, most committed to the environment.

- Finally, Generation Alpha (2015...) is Pablo, who at eight years old remains pensive, observing and exploring the world, curiously eyeing that machine that "gives away money."

Their role is yet unwritten, a blank page where we can only imagine and predict. Probably he or his child will no longer use money as we know it, not even a card at the ATM. The mobile will be the payment medium for everything and the substitute for the bank branch.

As we can see, studying individuals' financial literacy or competency at each moment in history involves considering aspects such as age, social context, values, opportunity to access financial products, financial culture, or technological competencies. The latter has brought about profound social changes that mark a change in the financial model. The 2008 financial crisis and the current Covid crisis have accelerated this process, but the seed of change was already there. Unfortunately, along the way, generations that knew another world are excluded, witnessing with astonishment and resignation this transformation at all levels, including labor. But change is unstoppable, and it is up to us to make it for the better.