Money… for many of us….is a complex, controversial and sometimes competitive topic. While each generation has its distinct challenges, money can also be the number one stressor for individuals, couples, and families.
In this blog, I explain how each generation relates to money, how money stresses the generations, and offer solutions to the crushing stress factor.
Let’s begin with the World War II Generation or those born between the years of 1925 and 1942.
For many in this generation, also called “The Silent Generation”, money was associated with the deep scars of scarcity created by the Great Depression. Therefore, the emphasis was on saving and always spending less than they earned. This generation was largely content with keeping one house for as long as possible and keeping cars and other possessions until they wore out. The primary money motivator for the WW II Generation was to replace scarcity with “having enough” or sufficiency.
The Baby Boomers, born from 1946 to 1964, changed all of that. Oftentimes, for this generation, money was a motivator for “more”; the next promotion, the bigger house, the newer car, the latest in clothing and fashion…
Sadly, because “more was always better”, there was “never enough” and Boomers often found themselves on the never-ending treadmill of “more”. In addition to the “never-ending quest for more”, Boomers were also severely impacted by the 2008 recession. This, coupled with the unanticipated financial support required by their adult children, left many Baby Boomers underfunded to meet their retirement income goals.
In a Financial Finesse survey, Generation X, born between 1965 and 1976, has the highest response rate among the generations to “feeling overwhelmingly stressed out” when it comes to money. (Source: CNBC “Gen Xers are Doing the Worst Job with Money”: Survey Tom Anderson March 4, 2015.)
Why is this? One reason is because they carry the most debt of any generations – $142,000 per person on average which contributes to Gen X being the most financially stressed generation.
They also spend a significant amount for luxury travels escapes – averaging $627 per day. (Source: LearnVest “Battle of The Generations: How Gen X and Gen Y Do Money Differently”, Emma Miller April 30, 2015)
The Millennials are born between 1979 and 1994. Also known as Generation Y, they face the most uncertain future of perhaps any generations in America since the Great Depression.
The income and net worth gulf between the highest class and middle class is at its highest level in the past 90 years. The 2008 recession left over 15% of this generation out of work. Paying off enormous amounts of student debt (average $33,000 per person) coupled with underemployment or unemployment is delaying their ability to save for retirement. Their top splurge is eating out, averaging at least three times a week. (Sources: Money Habits of the Millennials by Mark Cussan 7-26-16, and LearnVest “Battle of The Generations: How Gen X and Gen Y Do Money Differently”, Emma Miller April 30, 2015 )
Regardless of the underlying causes, financial stress can result in people feeling powerless, out of control, helpless and/or depressed. Because these feelings can also reduce one’s energy level, many people feel hopeless and like “there is no way out”.
As an essential part of our work with clients, Resonate professionals offer a process which gives people control and confidence about their finances and financial decisions.
Based on our research, we understand there are certain things we can do which are designed for each generation to gain financial control and reduce financial stress.
Our thoughtful and compassionate process redefines the client experience as we partner together, aligning the purpose of money with the purpose of life. It leads to wise money decisions throughout the generations.
We’d love to share a conversation with you and to begin your journey to financial freedom and peace of mind.
Barbara A. Culver
CFP®, ChFC®, CLU, AEP®