Deborah Adeyanju, CFA, Associate Planner & Impact Strategist
Gen X women are worried. When it comes to the financial future, research shows retirement is our biggest concern. But managing monthly cash flow, paying down debt, and setting aside funds to pay children’s college costs — while often also taking care of aging parents — are on our minds too.
The worries are real. And, as Ada Calhoun covers in her book, Why We Can’t Sleep, they’re keeping many of us in the “sandwich generation” up at night. But they don’t have to. Taking control of your personal finances can not only set you up for success in achieving important life goals, it also gives you peace of mind. Here’s why it’s important and how to do it.
“Hello, you've reached the winter of our discontent.”
You can say that again. That Ethan Hawke line neatly sums up research on how Gen Xers are feeling. 40% of respondents to a Schwab survey of investors identified retirement as a significant source of stress. Between simultaneously caring for dependent kids, (trying to) save for retirement, and seeing to aging parents, Gen X is, not surprisingly, burdened by high levels of debt. Responding to the same survey, 27% of Gen Xers listed credit card debt, followed by the high cost of living as their next most significant financial stressor.
The fact that Gen X tends to be ignored by the media and the financial advisory industry, in favor of Boomers and Millennials, doesn’t help. Try doing a Google search on Gen X and most results are dominated by references to Millennials. And most financial advisors seem to be myopically focused on serving their existing Baby Boomer client base and/or chasing Millennials. Never mind that Gen X controls 16% of U.S. wealth to Millennials’ 3%.
It’s understandable that many of us feel left to our own devices. Not that we’re bitter. Maybe it was the media’s early characterization of us as the “latchkey generation.”(Before they started calling us slackers.) We’re used to being self-sufficient. But even as Gen X women mention worries over finances, an Ameriprise Women and Financial Power study found only 51% have sought financial advice. Gen X’s go it alone approach is very different from both Boomers’ and Millennials,’ 64% and 60%, respectively, of whom say they have done so..1 Another study on Gen X and finances, based on Harris poll data, found similar results.
Even more worrying, Gen X stands out in another way. Many of us seem to be winging it when it comes to personal finances. We are less likely than both Baby Boomers and Millennials to say we have a financial plan. Yet on the whole, we’re clearly in need of assistance, since only 20% of us express confidence about our financial futures.
“This is all we need. A couple smokes, a cup of coffee, and a little bit of conversation. You and me and five bucks.”
Well, not exactly. It can seem like a slog given everything else you have on your plate, but taking charge of your personal finances is a critical downpayment on a financially secure future. Here’s how to start tackling it.
#1. Make a plan of attack. It could be as simple as jotting down the three things you need to do right away. For instance, max out your retirement savings account, start setting aside more each month for emergency savings, and begin paying more than the minimum due on your outstanding credit card debt. Or it could get as complex as developing a comprehensive financial roadmap (you’ll want professional help with this).
Whatever form yours takes, what’s important is that you start. It’s also essential to break your plan down into discrete tasks, and assign each a timeframe.
#2. Next, talk to a professional. Now that you’ve outlined what’s most important for you to get a financial handle on, talking with a financial expert can be really helpful in drilling down on the how — helping you prioritize goals, figuring out what resources you’ll need, and weighing the impact of financial decisions — as well as providing a crucial sanity check.
Not only can an experienced financial advisor help you assess where you are now, s/he can also help you connect the dots to get from where you are today to where you ultimately want to be. We recommend choosing an advisor who holds herself to a fiduciary standard. That way you know your interests will always come first.
#3. Find an accountability partner. Whether that’s a trusted financial advisor, your best friend, or your yoga buddy, enlisting someone to hold you to your commitments, support you, act as a critical sounding board, and cheer you on, improves the odds you’ll keep making progress toward your goals.
1. Source: Ameriprise, “Women and Financial Power,” https://www.ameriprise.com/content/files/AMP_WOMEN_FINANCIAL_POWER_STUDY.PDF, June 2014.
2. Source: ThinkAdvisor: “Here Are Gen Xers’ Biggest Financial Concerns,” https://www.thinkadvisor.com/2018/01/08/here-are-gen-xers-biggest-financial-concerns/, January 8, 2018.
GRID 202 Partners is a holistic financial planning firm specializing in fee-based, comprehensive financial and investment planning for individuals, couples, businesses and institutions. We serve successful, ambitious professionals and business owners ready to take the next step in developing a budget, reducing debt and creating wealth for themselves and future generations.