Gen Xers confident about their financial futures
Posted on January 29th, 2008 – 12:22 PMBy Kara McGuire
Ameriprise conducted a survey last spring about different generations’ money attitudes and beliefs.
Here’s an excerpt of the release:
Forty-six percent of the adult children of boomers say they are very optimistic about their personal financial future, compared to 39 percent of boomers and only 28 percent of the boomers’ parents’ generation who report they are very optimistic about their financial future.
Likewise, 48 percent of the adult children of boomers say that they are very confident in their ability to reach all of their financial goals over time; only 36 percent of boomers and 34 percent of boomers’ parents feel the same way.
To me, these numbers speak more to time constraints than anything. It’s a lot harder to feel confident about financial futures and reaching financial goals if you’re 90 years old. You’re not working, you have a finite amount of money and have a lot of time to sit around and watch your nest egg shrink and grow with the day’s market gyrations. When you do venture out to the store you see the price of groceries and medicine rising above the bump in your Social Security check that’s supposed to cover cost of living increases.
The press release highlighted how younger generations are more optimistic than their parents. But to me, what stands out is that more than half of those surveyed are worried.
Maybe I just run with a gloomy crowd, but I’m not hearing from “very confident,” “very optimistic” people– in my personal life or in my work.
Instead, I hear a generation concerned about a future of higher taxes, wage stagnation, job insecurity, an American economy poised to take a backseat to the “third world,” and college tuition inflation.
I am hopeful that I will have a decades-long, satisfying career and decades-long enjoyable retirement. But I am worried about some of what I mentioned above.
How about you? Confident about your financial future? Confident, but concerned? Or are your genuinely worried? And why?
4 Responses to "Gen Xers confident about their financial futures"
I am 31 years old, squarely in the Gen-X category. My wife and I have 3 young children. I would like to think that we are confident about our financial future because we received and followed some very sound financial advice along the way, including:
- Pay your entire credit card bill EVERY month.
- Only take out a loan for 2 things: A house and an education. They both have the potential to appreciate in value. Pay for everything else with cash.
- If you can’t afford it with cash, you don’t need it.
- Don’t have kids until you can follow the 3 above rules.
- The benefits you receive at a job are equal to, if not better than, the wage that you earn.
- Put 10% of your salary away towards retirement.
- The #1 key to financial well-being, as well as a comfortable retirement, is owning a house you can afford. A house is not an investment, it is your home. If you can easily afford your home, it is easier to adjust to the financial storms that come your way.
I know some of these rules are easier said than done. But they take some sacrifices. If you can’t afford the shoes, don’t buy them. If you can’t afford the vacation, don’t take it.
I think of my friends and co-workers who are Gen-X’ers. The ones who I would consider “financially stable” made wise decisions in their 20’s. The one’s who are having financial troubles spent their 20’s buying vacations instead of paying down student loan debt. Or buying brand new cars and going to bars instead of buying a fixer-upper house and spending their time on sweat equity.
I wonder if there’s an inverse relationship between how one feels about their own financial future vs. how much time they’ve spent thinking about it?
Having said that, I feel pretty confident about our financial future, with the one nagging concern about future college costs.
N. The first poster is wise way beyond his/her years. Keep up the good work.
Well, Gen X hasn’t really been known as an optimistic bunch. Angst, cynicism, and distrust have been used to describe the 29-45 year olds, but not optimism. Although we do have a lot of entrepreneurs in our generation.
I’d say one thing we have going for us: at a macro level we’re such a small generation that once the high position jobs currently held by Baby Boomers are vacated, there should be tremendous opportunities for us and less competition.
Personally I feel pretty good about the future. And I agree with N on the point that a house is not an investment. An interesting blog from WSJ on the subject: http://blogs.wsj.com/developments/2008/01/16/why-baby-boomers-may-bust-the-housing-market/
