Surprising Ways Gen X and Millennials Are Worlds Apart Financially

Gen Xers (born between 1965-1980) and the older millennials (1981-1996) will be the last generations to remember the world before the internet, mobile phones and social media. There is a lot of overlap in the experiences of the two demographics, who together shepherded the country into the 21st century, the new millennium and the digital age. There’s also, however, a lot that sets them apart.

Although they’re still commonly lampooned as naive kids, the oldest millennials are now 40 years old. The earliest-born Gen Xers are drifting out of middle age and toward retirement. Along the way, each group developed ideas, attitudes and strategies about money and finances that don’t always agree with those of the other.

GOBankingRates reached out to experts who work with Gen Xers and their younger counterparts in the millennial set to find out exactly where the two groups diverge on matters of finance.

Karen Condor is a finance expert with Loans.org. In her experience, Gen Xers are more likely to adopt a set-and-forget, buy-and-hold mindset when it comes to their investments. Their younger counterparts, on the other hand, tend to trade more actively.

“When it comes to millennials who invest, they change their portfolios more often than Gen Xers do,” Condor said. “Perhaps in part because they have more confidence in their knowledge and ability regarding investments.”

Gen Xers have a tendency to focus so narrowly on building traditional savings that their other investments suffer, according to Craig Cecilio, CEO and founder of investing and personal finance platform DiversyFund. The generation after them, on the other hand, tends to view investing not as an exercise in nest-egg building for the future, but as a means to an end in the here and now.

“Millennials care about having a work/life balance,” Cecilio said. “According to a Vanguard survey, 48% of millennials want to work just enough to have a comfortable lifestyle and retire early. However, while this generation has ample access to financial tools and technology, they struggle with the fundamentals of finance, including budgeting, portfolio diversification and retirement planning.”

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Millennials suffered the collective trauma of coming of age during the financial calamity of 2008 — and it forged a widespread reluctance to borrow, according to Zachary A. Bachner, a CFP with Rivendell Capital Management.

“Millennials are often more savings conscious after growing up through the financial crisis,” Bachner said. “They saw the effects and burden that time had on their parents and many became determined to strive for more financial stability. Millennials often seem commitment-averse and avoid or delay large purchases such as homes and starting families.”

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Timing is everything, and the fates dealt the millennials several lousy hands in a row.

“Millennials find themselves in a hard spot financially,” said Facet co-founder and CFP Brent Weiss. “They were rocked by two major economic crises and now a global health crisis. They were never able to establish themselves financially due to poor job markets and high levels of student loan and credit card debt–and they feel betrayed by Wall Street. We’ve seen this generation turn to things like day trading apps and Reddit financial advice, almost trying to DIY their way back to a feeling of control over their finances.”

But, as it so often does, all that struggle will likely lead to innovation.

“They will be the driving force behind the creation of financial services for Main Street and not Wall Street,” Weiss said.

Although the financial trauma endured by millennials is already leading to exciting new tools and technologies, the steadier ride enjoyed by Gen X seems to have paid dividends over the decades.

“Generation X finds themselves as the middle child of America,” Weiss said. “They are sandwiched between the largest two generations, millennials and boomers, yet they carry far more influence than many people give them credit for. Gen X was able to find their feet financially before recessions and skyrocketing college costs could knock them down. They carry the most debt of any generation but have assets to back it up. They are more conservative in nature, as a group, and tend to feel more secure about their financial futures”

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