Yes, I said it right. According to a report from Pew Financial Security, Generation X (those born between 1965 and 1980) are less wealthier (or poorer) than our parents.
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Courtesy of dollarphotoclub.com
How is that possible?
We make FAR more than our parents could have ever imagined even with inflation and cost of living adjustments.
But, according to Pew, it is not what we make that is contributing to this statistic, it is what we spend. We have nearly six times more debt than our parents had when they were our age. Six Times! Grant it, most of this debt comes from student loans, but other reports show:
We spend more money on vacations
We spend more money on eating out
We spend more money on clothing
We spend more money on electronics
We just spend money overall!
So the problem is not just all of the student loans some of us had to get, it is the spending we continued to do once we received that new salaried job with the big title.
So as the Director, Plant Manager or Doctor, we find ourselves trying to live up to the “title” or even the salary sometimes unknowingly. And thus, the infamous poetic lyricist ends up being right after all, “Mo’ Money, Mo’ Problems!” The more we make, the more we think we have to spend; hence, the more problems we incur (Note: Millionaire Next Door is a great book to read concerning spending).
So what do we do to change those stats of being poorer then our parents and being the first generation of not having enough for retirement?
We have to plan!
But before we can plan, we have to take a hard look at our current financial makeup–what we owe and who we owe.
Yes, we may know we have $25,000 of student loans and $5,000 on Visa, or $500 on our Macy’s Card and $1,000 on Best Buy and, of course, $250,000 on our mortgage loan and let’s not forget the $18,000 for our auto loan. We may know what we owe on each individual bill, but we probably have never actually added them all up. We have never calculated them all to see we actually owe $299,500 in total. And that is just one person, if you are married, it does not even include your spouse’s debt.
$299,500 worth of debt
You never looked at it in all of its totality.
Well, you are not the only one. Most of us Generation Xers do not know how much debt we are in.
We just know we get paid on the 15th and 30th
We know we will pay the minimum on each of those bills each month.
And we know we will continue to live our lives as usual…continuing to spend.
So what do we do to take control of our finances and crush those statistics? Here are a few steps to get you started.
Step 1: Calculate all of your debt. If you are like me, this was truly a “Come to Jesus” moment. I had absolutely no idea how much I owed EVERYBODY COLLECTIVELY.
Step 2: Create a plan. What do you want your finances to look like next year? In 5 years? And 10 years from now? Definitely discuss this with your spouse, if you are married. It takes two to create and work towards a plan.
Step 3: Stop spending! Take control of your finances and stop letting your finances control you. If you do not have any savings, continue to pay the minimum on each bill, pay all of your monthly expenses (gas, food, utilities, play money), and whatever is leftover, put in your Savings account. You should always have at least $1,000 in savings for a likely emergency.
Step 4: Pay down one bill at a time starting with the lowest first. Once you have some savings, start paying bill #1. Once you paid off bill #1, take that money and put it (ALL) on bill #2 and continue until all your bills are paid.
To obtain a more detailed step-by-step process, click here to sign-up to receive 7 Steps to Building a Financial Legacy.
We do not have to be worse off financially than our parents. My mom use to always tell us each generation should be better than the former (not worse). I am determined to completely eliminate our debt and show our children that it is ok to be “the one” to mess up the curve, to defy the odds and to have a better financial life than our parents. We are not Generation X! We are not even Generation Less! We are Generation Blessed!
Do you think our generation (Generation X) is less wealthier than our parents? Yes, we make more, but do we actually spend more? Share this post on Facebook or Twitter and leave a comment.
Source: CNN
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