Downs Law Firm, P.C.

Generation X

How Can Generation X Find a Money-Life Balance?

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You can achieve your money-life balance with savings strategies.

For Generation X (“Gen Xer’s” are people in their late 30s to early 50s), saving is a major investment of time. With aging parents, children nearing college, and their own retirement in the near future, it can be hard for these “sandwiched” adults to even tread water, let alone get ahead with their finances.

U.S. News & World Report reminds us in its article “Essential Strategies for Generation X” that with the right savings strategies, Gen Xers can find a money-life balance.

Generation X has been financially devastated twice: when the tech bubble burst and again during the financial crisis. This makes these individuals dubious about the future.

Let’s look at three strategies for those in the sandwich generation to help make certain that the financial needs of their aging parents and children are met, and at the same time, ensuring that they don’t sacrifice their own financial future.

For You. As a Gen Xer, you need to determine your financial health by calculating your net worth. This includes your savings, personal investment accounts, retirement plan accounts, and real estate, minus credit card debts, your mortgage, and miscellaneous debt. Take off any items that won’t appreciate or be consumed in retirement, like a car or jewelry. Then review investments to be sure they’re performing consistently with your needs and expectations. Develop a plan to tackle debt, and identify existing and projected expenses. Once you have all this information, use a basic retirement calculator to see if you’re on track to meet your retirement spending needs.

A basic calculator probably won’t let you input different scenarios or make detailed assumptions. Most will assume that you will need 70-80% of your current salary in retirement, but this may not be the case if you’re a big saver.

Create a contingency plan for premature death and disability. Ask an attorney to draft your will and other estate planning documents.

For Your Children. Look at the resources available to fund your children’s education. Don’t put your retirement plan in jeopardy by paying for an expense you can’t afford, including your children’s college.

For Your Parents. See where your parents are financially because you may need to factor unexpected expenses into your plan if your parents need financial assistance. It will save time in the future if you know where to track down this information.

Develop good financial habits to give you peace of mind and save time in the future. Harness the power of time—even if you are only able to save a small amount, over time your investments will grow. Some in Generation X don’t save because they don’t think you can save enough. Doing something is better than nothing. XReference: U.S. News & World Report (March 28, 2019) “Essential Strategies for Generation X”