Each generation has its own unique outlook on managing money and finances, driven by the opportunities they had and their current assets, needs, and future outlook. The economy, and even the political structures, however, are also changing the game. Whereas older generations enjoyed career stability, Gen Z and millennials face severe wage stagnation, shaky careers, and are now among the worst hit by AI and other cost-related layoffs.
It’s no wonder that financial behavior is changing, but each generation is changing its financial behavior in different key ways:
Boomers
Boomers, on average, have the highest income and hold the majority of wealth (51%) in the US. As many are now in their retirement, they are increasingly spending on healthcare, travel, and leisure.
Those in this age bracket should look into strategies to maximize their retirement savings and their estate. One, to maintain a high standard of living, and two, to maximize their children’s and grandchildren’s inheritance.
Generation X
Generation X is colloquially known as the “sandwich generation”, meaning they’re struggling with financially supporting both their parents and the older generation, as well as their own children. As such, they have the highest debt on average. While mortgages make up a large share of this debt, Gen X also carries the highest credit card debt.
To help balance their budgets and improve their financial health, Gen X should consider consolidating disparate debts (such as multiple credit card debts) into a single loan. Before that, however, they should consider negotiating down their debt from the outset. If you’re in this group, look to professionals like those at Achieve.com to first negotiate down your debt, then consolidate it into a more manageable payment plan.
Millennials
Millennials initially faced plenty of hardships, including delayed career progression due to the 2008 financial crisis, skyrocketing housing prices, and, of course, student debt. Millennials are now collectively reaching their peak wealth. Despite this, millennials are now, on average, 40 years old by the time they buy a property of their own, and 1 in 5 are living in poverty.
It’s no wonder that millennials are increasingly living with their parents, or hoping to inherit to help them get on the property ladder. While consolidating debts and smart money management can help, millennials are also looking to diversify their savings plans to include more than just a 401(k) to help overcome wage stagnation or even layoffs.
Generation Z
Generation Z faces many of the challenges millennials are currently facing, but with the added pressure of AI removing many junior roles from the roster. They are also more likely to use digital-only banking, hold cryptocurrencies, and even invest through app-based trading.
Now, this may make them seem like the digitally savvy way of the future, but studies have shown that they’re actually 3x more likely to fall for an online scam, though they tend to lose less on average than the boomer generation.
Where Gen Z behavior is mostly changing, however, is in money management. They’re more likely to use apps to track spending and set budgets, with some even opting for a cash stuffing approach to ensure they stick to their budgets. Gen Z also tends to prefer to save up for big purchases, rather than pay in instalments. This digital-first approach towards money management and even investing is helping the currently poorest generation manage money better.
Disclaimer: This article contains sponsored marketing content. It is intended for promotional purposes and should not be considered as an endorsement or recommendation by our website. Readers are encouraged to conduct their own research and exercise their own judgment before making any decisions based on the information provided in this article.
