Elders’ excesses in finances taught Gen-Xers a better way

Associated Press

NEW YORK – Many of the children of America’s baby boomers are already young adults, and they have learned a thing or two about the world.

While the boomers came of age to Woodstock and the Vietnam War, their older offspring are the product of Reaganomics, MTV and the Macintosh. The younger ones matured to portable MP3 music players and the Clinton impeachment.

As a result, each generation brings a different approach to life. So perhaps there’s something boomers might learn from Generation X, now in their 20s and 30s, and the teen-age Generation Y.

“Every generation has challenges and strengths,” said Ann Fishman, president of Generational Targeted Marketing in New Orleans. “Each needs to recognize its own weaknesses and learn from the other’s strengths.”

So just what can Gen Xers teach their parents well?

“They watched the drug culture, the downsizing of companies and parents who spent more than they saved,” Fishman said. “They saw people who lived the very good life, but didn’t plan for the future. They saw people who worked 100 hours a week and their families fell apart.”

As a result, Gen Xers tend to advocate more balance between work and personal life, she said. “They’ll get the job done – but not by sacrificing everything else.”

Aware that pensions are shrinking or disappearing and that Social Security is also uncertain, “they’re thinking much earlier about saving for their future,” Fishman said.

Juliette Fairley’s recently published “Money Rules” is a personal finance guide for Gen Xers. The 35-year-old New Yorker makes it clear it’s a post-boomer book with passages such as “How did people survive without Automatic Teller Machines? … Well, somehow they did, just like they survived without cell phones.”

She believes her generation, reacting in part to the idea that “boomers stayed too long at the party,” is going to be more responsible with money.

“Gen Xers are concerned about the lack of Social Security in the future, and they’re already saving for that,” she said. “Boomers seem to be more carefree about possible cutbacks, even though they are closer to retirement.

“Maybe boomers should pay more attention to that.”

But Fairley also believes Gen Xers have picked up some of their parents’ spending habits.

“They won’t abandon Banana Republic and the Gap,” she said. “They like brands, they like nice things.”

Young people do seem to be focusing on financial issues earlier than their parents did.

A survey of students ages 16 to 22 by the Washington-based American Savings Education Council found 54 percent felt it’s very important to save on a regular basis, and 76 percent consider themselves disciplined in their savings decisions.

But a lot of boomer kids, like their parents, are accumulating debt.

Nellie Mae, an education loan company, found in a survey that 78 percent of college undergraduates have credit cards and carry an average debt of $2,748. The debt level for graduates students was about double that figure.

Christina Rohall, 26, a public relations specialist in San Francisco, has strong ideas about saving but isn’t sure her parents – or other boomers – are willing to share them because “they’re pretty stuck in their ways.”

Concerned that her parents couldn’t pay for her college education, she began putting money away herself in high school for her tuition. She uses just one credit card and tries not to carry a balance.

Rohall already has accumulated stock under an employee purchase program, funds a 401(k) retirement plan at her office and puts money into a Roth IRA.

Rohall said that several years ago, she tried to interest her father in opening a Roth IRA, which has special tax protections, but “he felt it was more for younger people.”

Don Silver has written about both generations, publishing “Baby Boomer Retirement: 65 Simple Ways to Protect Your Future” and “The Generation X Money Book.”

“Boomers should give advice to their Gen X kids about careers and finance – and then do as they say,” he said.

One thing boomers are learning, perhaps late and to their dismay, is there’s less stability in the workplace. Downsizing, layoffs and unpaid “vacations” are increasingly common, and many boomers have to find other ways of earning money.

Gen Xers, he said, are more prepared to change jobs, to change industries, to learn new skills.

“If baby boomers hope to move in the workplace, they better look at the required skills,” Silver said. “Gen X and Gen Y grew up in the computer era, and they have knowledge that the boomer may need to acquire to compete.”

He added: “Your natural inclination is not to listen to your children. The older generation is supposed to be wise. But the reality is that Gen X is more in tune with what’s going on in the workplace, and at least having a dialogue could be helpful.”