Recently, I’ve been on a somewhat self-reflective journey/mindset. No, I’m not having a midlife crisis, but I’ve found myself interested in how different generations navigate their lives. Of course, this has led me to dive deeper into my own generation, Generation X. Without recapping what I’ve written before, here’s a quick rundown of what Gen X is known for:
- We are the generation of independents. Gen X was the first full generation of kids to grow up with both parents going to work—they call us the “latchkey” kids because we always knew how to get into our locked homes.
- We saw the transition from analog to digital. We went from VHS tapes and portable radio boomboxes to DVDs and even horrendous filesharing programs that would immediately make the personal computer sick with viruses. The point is, we’re a pretty adaptable generation, relatively speaking.
- Witnessing multiple tidal economic shifts left my generation aware that all bubbles can pop and that no matter what, you should expect and prepare for turbulence, but don’t live your life in fear.
As most Gen Xrs are well into their parenting years, I thought it would be interesting to explore how we are treating our kids and whether we’re destined to make some of the mistakes our parents did or discover a wealth of new missteps of our own. Don’t fret—regarding family financial planning and building generational wealth, I’ve got some positive messages for you to consider!
Gen X Parents – Are We Overcorrecting for the Past?
I can say this with confidence: each generation works hard to avoid repeating the missteps of their parent’s generation. Childhood experiences are foundational, and it’s hard not to carry some grievances regarding what our parents did wrong.
For Generation X, many feel frustrated that their parents were absent and didn’t spend enough time with them. So, in a perfectly understandable response, they want to spend more time with their kids and protect them from some of the trauma that they may have experienced in youth. I get it. I try to spend as much time with my kids as possible, and I had a good relationship with my parents in my youth. So, I sympathize with those who were not in good standing with their parents while growing up.
Now, here’s the rub: by trying not to repeat the mistakes of the past, we can sometimes over-correct, pull a complete 180-degree turn, and end up creating a different set of issues that must eventually be faced as well.
I’ve witnessed many of my Generation X clients face the same set of challenging financial challenges: 1) they are taking care of their late-stage-of-life parents who need eldercare, and 2) they’re funding almost all components of their kids’ lives, including college – Gen Xers are great at focusing on their needs last.
Understanding When to Limit the Support
My job and goal as a family financial planner is to work with everyone up and down the family tree. When I work with generations of one family and help build strategies to benefit all, I see where the dots can be connected, what can be better positioned, and what needs better support, helping families ensure their legacy planning is in order. Gen Xers often neglect their retirement planning needs to support the immediate needs of elder care and college funds/kids’ needs. Almost every aspect of life is about balance, and I must let my clients know when they are heading off-course and putting too many resources into one bucket or the other.
Hope is not lost, though. There’s always a better way, and it’s never too late to course-correct and influence your future outcomes.
Hope and Opportunity for Gen X Parents
While I can’t disclose names or particulars, I can tell you I’ve had multiple Gen X clients work with me to connect the dots and find solutions for everyone’s needs without jeopardizing their retirement.
A common disconnect between generations within a family is that the desires of the grandparents are often not communicated or misinterpreted. The sandwich generation (Gen Xers) is often not told about their parents’ leave-on vs. live-on plans, or the legal paperwork is incorrect. Because of this disconnect, things like college savings accounts may not receive once-intended funding, or a mortgage may get paid off years later than need be.
Here are a few quick examples:
- A client of mine sent her parents the “Cash Alternatives Guide.” Her parents had their entire liquid net worth of $250k in bank accounts yielding .01% and a safe deposit box earning nothing. By simply using a couple of the alternatives, we got roughly 5% on these assets and are now collecting an additional $1,000/month income.
- A client saved their parents $600/month by reviewing their Medicare choices.
- A client read my blog, “Crucial Lessons in Financial Planning Begin in the Early Years,” and helped their child make a great financial decision when choosing a college. The same client set up Roth IRAs for both kids, and they are starting to form great financial habits and are taking advantage of 40+ years of compound interest tax-free.
Once the generations become less siloed and the whole picture becomes clear, there are often many opportunities to address the issues thoughtfully.
We’re a Fun Generation
As Gen Xers, we know that guiding our kids through life’s challenges rather than shielding them from every difficulty is better, but it’s not always easy to live by. At the same time, we’re mindful of our responsibilities toward our aging parents, ensuring they have the care and support they need as they grow older. However, this must be done without compromising our financial futures. These are the difficulties we face, but believe me when I say there’s a balance to be found, and it’s my job to help my clients find that balance.
I’ll leave you with this thought: Gen X Parents, with some dedication to balance, you can still be a great parent and helpful son or daughter to those generations around you. Yes, many depend on you, but resources and help are available, too, so you don’t have to sacrifice your needs to support those you love.
Quick fun sidenote: I’m friends with a group of Gen X dads in Newburyport. Each year, we enter the Newburyport Bed Race as part of Yankee Homecoming Weekend. We build a bed and pick a theme, frequently featuring tasteful nostalgia from our generation. While I was sadly unable to participate this year with two kids doing all-star travel baseball, I cheered them on proudly! This most recent year’s theme was the 1980s WWF (now WWE); this goes to show that Gen Xers now know how to have fun—we may not be perfect, but we’ve gotten an awful lot right, too!
If you have questions about my family wealth management services, please don’t hesitate to contact me. My door is always open.
