Weekend Reading: Gen X Squeezed Edition

Generation X, those born between 1966 and 1981, are feeling the financial squeeze. A Franklin Templeton survey made headlines this week as it revealed that many Gen Xers are being stretched beyond their financial limits. One quarter of Generation X have saved nothing for retirement, with many citing too low of income and/or too high of expenses as the main reason for their lack of savings.

While these surveys claim to reveal shocking truths about our lack of savings (e.g. Millennials spend more on coffee than they save for retirement) the results aren’t that surprising when you think about it. For example, Gen X is feeling the squeeze precisely because at age 37-52 they are in the most expensive years of their lives – raising kids, mortgage payments, rising grocery bills, more need or desire for two vehicles, soaring gas prices, to name a few.

Weekend Reading: Generation X Squeezed Edition

As a Gen Xer myself, about to turn 39 this summer, I can fully relate to the stress. I want to be further ahead financially (and I HAVE my financial sh!t together) but the demands of a growing family, rising prices, and lack of wage growth have slowed our progress. I rely on my side hustle – blogging, freelance writing, fee-only advising – to help accelerate our financial goals. But those who don’t have the desire or aptitude to earn extra income or live ultra-frugal will find themselves struggling during this hectic period of their lives.

Instead of throwing labels around like selfish, entitled, or ‘bad at money’, I prefer behavioural economist Dan Ariely’s viewpoint, which is that we’re all humans wired a certain way, and our behaviour is more a product of our environment. What external factors are at work during your transformative years? What kind of demands are we faced with during the already difficult child-rearing years? What type of economy are we living through when it comes close to retirement?

Who’s the more confident retiree? One who was blessed with a 10-year bull market during their highest earning years, or one who was downsized during a recession and the greatest stock market crash of our lifetime?

Of course Generation X is feeling the squeeze. We have to balance today’s expensive reality with tomorrow’s future needs. I try and achieve that balance by being mindful of my spending, which means tracking expenses and planning for short-and-medium-term goals, automating my savings so I don’t even miss the money coming out of my chequing account on pay day, and tempering expectations by understanding that I can’t afford to do everything right now – there has to be trade-offs and sacrifices made.

Anyone else feeling the squeeze?

This Week’s Recap:

On Monday I compared the debt avalanche and debt snowball methods to see which approach gets you out of debt faster.

And on Wednesday Marie looked at money trade-offs and opportunity costs.

Weekend Reading:

Speaking of squeezed, why Rob Carrick pities the two-vehicle family with a mortgage up for renewal this spring.

Two lessons from Morgan Housel on how to plan for and deal with the unexpected.

Wealthsimple’s Michael Katchen had a big, simple idea: An investing revolution that’s winning over millennials. Can he beat the big banks, too?

Jonathan Clements asks, what does grown-up money look like? Turns out it’s less about the size of your nest egg—and more about attitude.

You’re a saver but you married a spender. Here’s how couples can balance love and money.

Rob Carrick discusses whether you should consider your house as an investment or a consumable good with Doug Hoyes, author of ‘Straight Talk On Your Money’:

Michael James shares an example of loss aversion – the idea that losing an amount of money, say $1000, feels worse than winning the same amount will feel good.

Million Dollar Journey blogger Frugal Trader shares his wife’s investment portfolio and strategy.

If you enjoy the Canadian Couch Potato podcast then this episode featuring A Wealth of Common Sense blogger Ben Carlson is a must-listen.

Dividend investor John Heinzl explains how a company’s price-to-earnings ratio can lead you astray:

“When you’re looking at a P/E ratio, you need to understand how it’s measured and evaluate it in the context of a company’s earnings and cash flow growth. Generally, companies that are growing rapidly will have higher P/Es, while slow-growing companies will have lower P/Es.”

Finally, a look at how tiny Carthage College’s endowment returns beat those of Harvard’s giant $37B endowment by using index funds.

Have a great weekend, everyone!

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  1. Russ on May 12, 2018 at 3:16 pm

    Love the Carthage College endowment story. I heard it first on Ben Carlson and Michael Batnick’s podcast, Animal Spirits. Do you listen to it, by the way? Michael and Ben are informative, insightful and hilarious.

  2. Gin on May 13, 2018 at 2:37 pm

    As a volunteer for Gensqueeze.ca, an organization that advocates for young Canadians, while I am mid fifties, I can completely relate to the challenges of younger generations.
    I see my hardworking mid twenties son and his peers struggling to get ahead, paying off education loans while working at low income contract and part time jobs without benefits. The lucky ones have a full time job – even in those cases often at a salary that is lower when comparing for current $ to the 80’s or 90’s.

  3. Susan on May 15, 2018 at 4:14 pm

    I was born in July 1965. I don’t feel like I’m part of the baby boomer group but more like a Gen Xer. To the young people out there, I say have patience. Those baby boomers are about to retire en masse. For myself, I feel like I’m stuck in the middle.

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