Boomer Money Skills That Millennials Shouldn’t Follow
Written by
Dawn Allcot
Edited by
T. Woods
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Every generation has strengths and weaknesses when it comes to money management. Gen X holds the distinction of carrying the most debt, according to a report from CNBC.com. This includes credit card debt, other loans, mortgages and student loan debt. Yet millennials are catching up to their slightly older peers. Studies predict that by 2030, millennials will have the most debt, up to $228,891 per person.
It is easy to blame older generations for mounting debt problems in the U.S. In a recent survey by National Debt Relief of 2,000 adults split across ages, 48% of respondents said their money habits are inspired by their parents. Across the board, only 27% of respondents rated their money-saving habits as “excellent.”
Meanwhile, 65% of Gen Z and Millennials worry about Baby Boomers’ impact on their own financial future. Three-quarters of millennials also believe their current financial challenges are, at least in part, due to financial decisions made by Boomers.
What money mistakes should millennials leave in the past to build a stronger financial future?
Considering Small Purchases Insignificant
While the “latte factor” has been largely debunked as an obstacle to building wealth, small purchases do add up over time and can leave you short on cash. Based on the National Debt Relief survey, 43% of Americans make this mistake.
Rather than skipping that morning coffee, look at reducing small recurring purchases. The average American pays nearly $1,000 per year in subscriptions, GOBankingRates recently reported.
Gambling
Thirty-nine percent of survey respondents admitted to gambling. Purchasing a lottery ticket every once in a while won’t spell financial ruin. But if it becomes a weekly habit, you’re wasting $400 a year, according to GOBankingRates.
Using Credit Cards to Pay Bills
Using high-interest credit cards to pay your bills could be a sign of financial difficulties. One-third of survey respondents said they have fallen into this bad money habit.
It can be tempting to charge your bills and accrue credit card rewards. But if you don’t pay your bill in full when it’s due, the interest charges will make those rewards points or cash back meaningless.
Taking Out Payday Loans
A payday loan is a high-interest, short-term loan, that you pay off with your next paycheck. The problem with these loans, apart from the high interest rate, is that they can set you behind and make it difficult to catch up on your bills. According to the survey, 28% of people cited payday loans as one of their bad money habits.
Spending More Than You Earn
More than one-quarter of people (26%) said they spend more than they earn. If you find yourself in this money trap and can’t reduce expenses any further, consider a side gig to earn extra cash.
Final Note
Every age group has some room for improvement when it comes to financial habits. “Regardless of generation, financial literacy and education are important for securing a healthier financial future,” said Natalia Brown, Chief Compliance and Consumer Affairs Officer. “By empowering ourselves with smart money habits, we’re not just securing our financial wellbeing, but fostering a culture of fiscal responsibility that will resonate for generations to come.”
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