Surprising Ways Gen X and Boomers Are Worlds Apart Financially
Written by
Laura Bogart
Edited by
Chris Cluff
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Much of the chatter around generational divides has seemed to focus on the gaps between baby boomers and Gen Z, with the common refrain of “OK, boomer,” or baby boomers vs. millennials, with their claims that the younger generation’s zest for avocado toast single handedly cratered — well, everything.
While you might not be too shocked to hear that baby boomers have a different approach to money than their much younger counterparts, you might be surprised to find that there is yet another significant generation gap: Gen X is infamous for more than flannels and MTV, they’ve also departed from the boomers in many areas of personal finance.
If you think that boomers are inherently more cautious or savvier than their kids and grandkids — well, hear the surprising news that some experts had to share.
Also see how Gen X can avoid a retirement crisis.
Brand Loyalty
When asked about the biggest differences he has observed between baby boomers and Gen X, Yiannis Zourmpanos, a consumer trends analyst at Bountii, said brand loyalty comes to mind.
He said baby boomers are more likely to buy from brands they’ve always trusted in part because they grew up in a flourishing economy. “They grew up when the economy was doing really well,” he said, “so they don’t mind paying a bit more for things that are high quality and make them feel successful.”
However, coming of age during tougher economic times has made Gen X more strategic shoppers.
“They’re careful with their money, always looking for the best deals and comparing prices,” he said. “They focus on getting good value rather than just sticking with familiar brands.”
Spending and Saving
Ghazenfer Mansoor, founder and CEO of Technology Rivers, is used to helping companies across tech and healthcare succeed financially, but he also has noticed more than a few key differences between the ways that Gen X and baby boomers approach saving. It’s a personal topic for him, since he is a Gen Xer himself, with boomer relatives.
“With pensions not so steady and Social Security looking uncertain, we Gen X folks are really focused on putting away that cash for the future,” he said. “We are like rulers of the 401(k) and IRA world. Saving for retirement is almost like getting ready for a big battle — it’s better to be safe than regret it later, yes?”
But when it comes to boomers, he has noticed a more relaxed approach to saving, citing the presence of reliable pension plans and growing up with a positive outlook for the future that alleviated pressure to think about saving.
“They thought things would just somehow be OK,” he said. “My dad, for example, always looked sure that when he retires there will be enough money. He didn’t worry much about saving and liked to spend what he earned as it came in.”
For Dennis Shirshikov, head of growth at gosummer.com, the core differences in how boomers and Gen Xers spend and save come down to priorities. He said baby boomers generally try to avoid debt and focus on saving for retirement.
“In contrast, Gen X tends to carry more debt, particularly in the form of mortgages, student loans and credit card debt,” he said. “This generation also faces the dual pressure of saving for their own retirement while often supporting aging parents and their children’s education.”
Investing
If Gen Xers are generally more discerning when it comes to their shopping preferences and building their IRAs than their boomer counterparts are, they are a little more flexible and open to risk taking when it comes to investing.
“They are more likely to invest in equities, real estate and even alternative investments like cryptocurrencies,” Shirshikov said. “This risk tolerance can be attributed to their longer investment horizon and the necessity to build significant wealth for future needs.”
Conversely, baby boomers are more conservative, focused on preserving capital and generating steady income, preferring low-risk investments such as bonds, dividend-paying stocks and annuities.
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