Times have changed since baby boomers were young. Despite this, the money lessons they learned throughout the years still apply. Many xennials, who fall in between Generation X and millennials, could improve their finances if they listened to the wisdom of baby boomers. Here are several of the most noteworthy money lessons xennials can learn from boomers.
1. Don’t try to keep up with the Joneses
Social media has put a lot of pressure on younger people to buy the latest tech and follow trends. The downside to this is spending more money than necessary on items that have a minimal impact on quality of life.
“Baby boomers have taught xennials that it’s more prudent to invest money and forgo spending on items that only deliver temporary pleasure,” said Hayden McCoy, certified financial planner at Synergy Wealthcare Solutions.
2. Sacrifice today for a higher quality of life later
Successful baby boomers rarely used credit cards or loans to make purchases. Instead, they saved cash for purchases (even large ones), bought secondhand, or made do with what they had.
Through this strategy, boomers saved a lot of money and accumulated wealth, even if they didn’t earn high wages. Thanks to the sacrifices they made in their younger years, many of them are retired and enjoy a higher quality of life today.
3. Consider alternatives to higher education
Chances are you know many baby boomers without a college degree. Back in the day, many people skipped college and began to work at a young age to support themselves and their families. They were able to learn skills that allowed them to earn a good living and save for the future.
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“While college is a good option for some xennials, it’s not for everyone. Many of them can be just as successful as college graduates by attending a trade school or gaining meaningful work experience. Plus, they can avoid an overwhelming amount of student loan debt that continues to be a major issue in this country,” said McCoy.
4. Invest early and often
Successful baby boomers stashed money in investments at a very young age. They didn’t wait until they were 40 or 50 to think about retirement. Because they were often employed since they were in their late teens, they got a head start on investing.
Unfortunately, it’s not uncommon for xennials to delay investing until they’ve paid off their student loans, traveled, bought their dream house and took care of other financial priorities.
This is problematic as they’re missing out on compound interest that can mean the difference between early retirement and working until 80.
While it’s tough to set aside money for investments when there are other financial obligations to account for, it’s essential for any young person who wants a happy, secure retirement.
5. Be careful with lifestyle inflation
Just like xennials, baby boomers started from the bottom and worked their way up to higher-paying positions. The difference between the two generations, however, is what they did with their raises.
Successful baby boomers saved or invested their extra cash. Xennials should avoid splurging on a fancy trip, car or device. The “I deserve this” mentality may prevent xennials from meeting their long-term financial goals.
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