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People in Gen X, the forgotten generation, require a great deal of financial strength and resolve to handle being “sandwiched” between several generations.
Gen Xers, rightfully, suffer from middle child syndrome. The two older living generational cohorts, baby boomers and the Silent Generation, generally are lauded for being financially responsible and mature. The three younger generations — millennials, Gen Z and now Gen Alpha, born after 2010 — are often portrayed as the wayward trendsetters of the future.
The truth is that Gen Xers hold significant power and influence despite their position as the smallest and most overlooked generation. Cerulli Associates says Gen Xers will be the primary beneficiaries of the $48 trillion in wealth expected to transfer from boomers over the next 25 years.
As a Gen Xer myself and a certified financial planner, I recognize the importance of my generation as wealth receivers and, ultimately, wealth protectors. We need to develop the financial acumen and mental resolve to defy the statistic that wealth rarely lasts for three generations.
As Gen Xers prepare to receive wealth, we assume the weight of providing emotional support, guidance and physical presence to aging parents, while also trying to live our lives and raise children and even grandchildren. These caregiving demands can fuel anxiety and alter work productivity, often resulting in missed promotions, delayed raises and strained marriages.
These situations impact Gen Xers’ largest assets: human capital and the economic strength of two-income households. Common household dynamics — such as blended families, commuting spouses and mental health concerns that span from dementia (parents) to depression (children) — also compound the economic fragility experienced by Gen Xers.
Not only do Gen Xers manage family relationships — which requires us to magically stretch our time, energy and finances — but we also find ourselves sandwiched between very distinct views on workforce engagement. Our parents rarely changed jobs and exuded confidence that Social Security and their pensions would finance their retirements. Our children resist traditional work environments, delay “adulting,” remain on our payroll, stay in our homes and drive our cars. So how do we deal with these two dynamics?
Caught between two worlds, we recognize that we must change jobs, start an entrepreneurial venture or both — all in search of market-rate compensation as we gain more skills and expertise. We assume job risk for the return of meaningful income. Rising salaries are critical for substantial investment and retirement contributions, as well as for funding exorbitant college tuition, supporting our own parents’ medical needs and paying off mortgages for a comfortable existence during our retirement years.
The market has taken Gen Xers for a ride, too. We barely survived the dot.com bubble and the housing crisis with underwater homes. We experienced the longest bull market in history, fearful of what stagnant incomes and an expected downturn will mean for us as pre-retirees. Other financial bubbles, such as student loan debt and long-term care, stifle our children’s and our parents’ nest eggs, respectively, and leave us vulnerable as their safety nets.
How can Gen Xers weather financial storms and keep wealth intact? Here are a few practical tips.
Identify your needs
Focusing on the needs of others without recognizing your own is a plan for disaster. You expose yourself to depleting your energy and finances, leaving you and everyone you love emotionally taxed and financially drained.
Find strength and resolve, then dedicate time to creating a lifestyle plan that sets a strong financial foundation for you and your family. Your financial plan, which includes your goals, will bring mental clarity and focus. It will also equip you to address family members and their needs.
Set boundaries and expectations
By designing your lifestyle and financial plan, you can decide how much time and money you will invest in the needs of your parents and children. You’ll be able to clearly articulate, without guilt or remorse, your honest decision about the assistance you can provide. You’ll demonstrate prudent ways to engage life and finances, and you’ll encourage your family members to adopt the same mindset. It’s the best demonstration of tough love and walking the walk.
Take care of yourself
As the middle generation, we often feel like the ball on the ping-pong table, with the generations ahead of us and behind us holding the paddles and volleying for our attention. Give yourself permission to rest and refresh. Add activities to your budget that support your mental and physical health, such as massage appointments, weekend getaways and a personal coach (e.g., fitness, mental health, career or financial).
Invite siblings and other family members to share the load — or at least cover for you during your reprieves. Outsource activities such as cooking, housekeeping, bookkeeping, lawn care and laundry.
As the forgotten financial superheroes, we Gen Xers deserve to courageously assess our needs and finances without “FOG” — fear, obligation and guilt. Our ability to receive and protect wealth earns us the right to adjust our financial superhero capes and live the life we envision, all while enhancing the lives of those we love.
Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.