Dear Gen Z, from this Gen X-er.
In studying financial wellness, one of the topics that comes up a lot is generational differences. What is discussed, what isn’t discussed, what we used to teach, what we no longer teach, etc. The truth is that things today are different than they were in the 1990s. Things in the 1990’s were different than they were in the 1970’s, 1950’s and so on. The world changes, technology and inventions make things easier, smoother, and more advanced. We may not think every change is good or productive but change happens.
I started thinking about changes (I am at that stage of life) and what I wish I had been taught about finances in my youth that would have made me financially stronger now. Would these things be helpful to younger generations? Are they still as relevant now as they should have been when I was in my 20’s? Some are. If you will indulge this aging Gen Xer, here are some things that would have put me in a better financial position today. Would I have listened? That is another story, it was the 1980’s and 1990’s, I knew everything then.
Retirement. This is a big one and truly a passion for me, now. I wish this had been discussed, at length, when I was a teenager. Roth accounts didn’t exist and pensions were still around. 401k’s and IRAs were just becoming something. I logically understood that retirement was out there but it really was not my problem then. Gen Z understands this far better than a lot of us did. Many of us started later than we should have. Not because we thought that we would retire on Social Security, but because many of us really didn’t know. Start now. It doesn’t matter how old you are. Start. Open a Roth IRA. Talk to your employer or look for a job that offers retirement benefits. Ask questions, if you don’t have someone, call me. I will impart some of my wisdom on you. Some of us figured it out late but we figured it out. We can point you in a good direction.
Savings. Start an Emergency Savings Account. Don’t wait, emergencies will happen. Start with $20 a week or whatever you can. Keep it growing. Don’t spend it on anything that is not an emergency. You need to have this cushion of 3-6 months’ worth of bills. You might think $20 a week is not going to cover 3 months’ worth of bills. Don’t look at it as $20, this is a marathon, not a sprint. If you don’t touch it, it will add up. Getting into this savings habit will lead to other good habits that will keep you above water when disaster strikes.
Credit Cards. In this day and age (notice the old folks’ phrases that I use!), you need credit cards. When we were growing up, our grandparents may not have ever had one, mine didn’t. They paid cash or wrote checks for everything. The 80’s was the decade of “He who has the most toys wins”, so we were not necessarily taught good credit card habits. Honestly, many of us were not taught good financial habits. Get a credit card. Use it and pay the bill in full, monthly. You will come to a month when you can’t pay it in full. This happens, don’t beat yourself up. Life happens and it is expensive. Don’t let it throw you, just keep paying on it. Bring the balance down, get it paid off. Remember wants vs. needs. Think before you buy that new toy!
GenX is often called jaded, cynical, and apathetic. One thing that comes from these traits is knowing that if it looks too good to be true, it is. Statistically, Millennials and Gen Z are the most likely to fall for scams. Yes, Boomers lose more money to scams but these groups are falling for them at a higher rate. This has a lot to do with a heavier online presence, new tech platforms and trust on social media. So seriously, if it sounds too good to be true, walk away.
Gen Xers are getting older but in many ways, we are in our prime. We have hit that sweet spot where we let more things roll off of our backs. We have not given up the fight but are finding better ways to do it. We may seem aloof but in reality, we love to talk about things we know. We are at the “in my day” stage of life. Much like younger generations, we also want to be validated in our knowledge and beliefs. Remember, we have been where you are and we went through a lot of financial ups and downs to get where we are. Most of us have learned along the way. So ask. For my part, I will do my best to remind Gen X (and Boomers) that if we are dissatisfied with your generation, we raised you, it is our own fault! Personally, I am raising Gen Zers who I think are amazing. I love to hang out with them, listen to their ideas, and learn from them. I also love to watch them learn. When my 13-year-old asked me about Roth IRAs or my 28-year-old wanted to know how the best way to start their 401k, what a feeling! The sarcasm, snark, and sense of whimsy that they are combining with their own personalities, there is just nothing better than the Gen Z’s that I know!