Generation X is often named the “lost” or “forgotten” generation, placed between the internet-savvy Millennials and the self-reliant Baby Boomers. Despite being overlooked in discussions about generations, this group remains resilient and continues to adapt to the world's constant fluctuations.

"Gen X,” as they are nicknamed, consists of individuals born between 1965 and 1980. This generation witnessed the beginning of ATMs, cellular data, and the famed invention of the Rubik’s Cube. Every generation has its own set of financial obstacles, and Gen X is no exception. Elements is here to empower Generation X to take charge of their financial future. In this article, we will discuss Gen X's approach to handling money and the origins of their debt. Additionally, we will provide useful tips for managing debt and planning for a successful financial future.

How does Gen X approach money? 

As part of the middle generation, Gen X has gained financial knowledge from both older and younger adults. While the Baby Boomer and Silent generations emphasize the importance of earning money through hard work, Gen Z and Millennials tend to prioritize work-life balance. Generation X was among the first to experience a transition from carrying real, tangible cash in their wallets to tracking numbers in an online bank account instead, making spending effortless.

Although this generation is experiencing higher income and is expected to inherit a substantial amount, they currently hold the highest levels of debt in student loans, mortgages, credit cards, and auto loans, totaling an individual average of $157,556, according to Experian.

So, why does Gen X have so much debt?

Managing expenses and saving for unexpected costs can be challenging due to various factors. In such situations, taking on debt becomes a temporary solution. Many Gen X adults are also supporting both their children and their aging parents, which adds additional financial pressure. In light of these hurdles, our team of experts has helpful advice to help Gen X navigate their journey to financial freedom.

How can Gen X manage their financial responsibilities?

Debt is a common reality for many households, but not all debt is the same. Most people don't have tens of thousands of dollars readily available to buy a car or a home. Taking on necessary secured debt can help you make larger purchases over time and build your credit, and they usually come with lower interest rates. On the other hand, unsecured debt, such as personal loans or credit cards, typically has higher interest rates and more risk. It's easy to end up spending more than you intend, which can lead to more debt, affecting your credit score and financial future. We understand that dealing with debt can be stressful and overwhelming. That's why we've gathered some repayment strategies to help you manage funds responsibly.

The Debt Snowball/Avalanche

There are several ways to tackle your debt, but the most important thing is focusing on one bill at a time. You’re not going to get rid of your debt overnight, so concentrating on one debt at a time makes it easier to manage. “The Snowball” and “The Avalanche” are two methods that can help you begin your debt repayment plan.

Start Small with The Snowball:

This debt repayment method involves targeting the smallest debt in one category while making minimum payments on all other debts. For example, if your smallest debt is on a credit card, focus on paying off that card first. By doing so, you will eliminate one item from your list while making progress on your other balances. Once you’ve paid off your smallest debt, move on to the second smallest, and so on.

Start High with The Avalanche: 

Start high by eliminating your highest interest rate first, regardless of the balance, and work your way down to the lowest. This method can help you save money in the long run because you’ve gotten rid of your higher-priced debt.

Now that you have these strategies, here are some other steps to help you get started on reducing debt:

1. Create a budget by learning your spending habits, wants, and necessities.
2. Don’t be afraid to make changes to your finances! Refinancing or cutting unnecessary expenses can give you extra funds to put toward existing debt.
3.  Have friends and family in your life that encourage you to succeed financially.
4. Build in milestones to celebrate! It’s okay to reward yourself during the process.

Want to learn even more about debt repayment? Visit elements.org/debt for more information.

Planning Ahead

We all know the importance of planning for what’s to come, but where do we start? For some Gen Xers, that might be retirement, while for others, it might be opening more accounts and investing more of their funds. No matter your goals, having a strategic plan can help relieve stress and give you a clear path forward for managing your finances in the next phase of life. Here are some common options to explore for future financial health:

• Estate Planning: This process is done by a legal professional who helps you create a will or trust based on your personalized situation. Having an estate plan protects your assets and ensures they go to the right people.
• Investments: Diversifying your investments is key to a strong jumpstart for your financial future. Investments can range from stocks, bonds, annuities, savings certificates, and even real estate. Investing is also a great way to build wealth to pass down to your loved ones. 401k,
• Pensions and Social Security: Retirement is right around the corner for many Gen Xers. Check with your employer to determine how much you have in each of your retirement savings accounts and what incentives your workplace offers so you can maximize those benefits. You can also get an estimate for your Social Security benefit at www.SSA.gov.
• Life Insurance: Life insurance provides financial security for you and your loved ones, giving you more peace of mind. Take time to research the different types of life insurance policies to find the best option for you.

It’s essential to pay close attention to all these tools as you continue to shape your financial stability and goals. Remember, it’s never too late to consider your future and that of generations to come. By taking proactive steps and making well-informed decisions now, you can ensure a comfortable retirement and create a sound legacy for your loved ones.  

Have questions or seeking personalized advice? Contact Elements Financial for support of all your financial needs.