Why Does Generation X Have Lifestyle Envy?

Media / Blog

Why Does Generation X Have Lifestyle Envy?

Prev

Do You Buy Your Bride A Wedding Gift?

November 25, 2013

It’s official.   For years and years everyone has labeled my generation (Generation X) the slacker generation.  We were the ones that really started on the video game revolution with games like Pong and Atari and now we have relegated ourselves to worst in class when it comes to overall debt.

Although the average balance on credit cards is neck and neck with baby boomers at $5,343 per card and we don’t carry quite as many credit cards as baby boomers, the average debt for a Gen X’er has soared to over $30,000. The Experian study showed that nationally, the average debt in the United State is $27,887 and the average bankcard balance is $4,501.   So, why is such a successful generation getting so deep in debt?  What actions can you take today to start improving your situation?

There is a reason why Gen X’ers and Millenials are using their credit cards more and falling behind on their payments.  I call it lifestyle envy.  While social media has become really effective in bringing the world closer together, it has also created a set of unrealistic expectations for my generation based upon last night’s Facebook post.    Doesn’t it make you angry that your childhood friends are all taking vacations to paradise whereas you suffer from having to take staycations?   Aren’t you frustrated that your co-workers all seem to be driving a Porsche or an Audi and you are stuck rolling around in a 2001 Honda?   How is it possible that your neighbor’s kids are having birthday parties like they are rock stars while you are still playing pin the tail on the donkey in your basement?

You should learn by reading the study from Experian that although it appears they are living life like they are on an episode of Entourage, the truth of it is that their finances are a sinking ship weighted by an anchor of credit card.  All the pictures on Facebook, Instagram, and Pinterest might give you the appearance they are doing well.  But that is all smoke and mirrors as these images produce a level of irrationality in our minds when it comes to how we spend our money.   The pictures tell us, “If they can do it, surely I can do it as well!”   Notice there are no facts about income or net worth on Facebook.  Notice that there are no budget numbers shown on Facebook.    Since pictures are worth a thousand words, the posts we see night in and night out psychologically work on our brains to make us think we should be spending more than we need to with our credit cards.  So, how can you fix your situation?  Use these five rules as you manage your personal finances.

  • Adopt The Pay Yourself First Rule- I’ve been doing this personally for 22 years in my own financial plan, and I recommend to save a minimum of 10% off the top before you plan out the rest of your budget.  If you can get to 20% to 30% even better, but start at a minimum of 10%.   If you try to save money after you spend, it’s likely you’ll have nothing because everyone is after your money.
  • When It Comes To Raises At Work, Use the 1/3rd Rule- Hopefully, if you are between the ages 34 to 48, your income will continue to go up in your peak earning years.   It is easy to expand your lifestyle as you make more money.  Consider saving just 1/3rd of every new pay raise you get at work whether it be in your 401(k) or personal savings.  1/3rd will go to tax and keep a 1/3rd for fun.
  • Get Down To Two Credit Cards You Use- Once you begin to pay off debt don’t cancel your existing credit cards, just stop using them.  I’ve maintained a high credit score over the years by carrying several cards, but being disciplined to using two cards and paying them off all the time.  Do you really need five more store cards?
  • Use The Acid Test For Purchases- Before you make a purchase, ask yourself whether or not you need it, you want it, and you can truly afford it?   Since the internet has created a wave of ease for our spending compulsions, before you click purchase give it 48 hours and then come back to website to see if you still really want the merchandise.
  • If You Are Struggling, Go To A Forced Budgeting Site- In the good old days, people used envelopes to sort out the cash from their weekly paychecks for paying bills.  Today, there are websites such as www.mvelopes.com that can help you do this electronically as a family.  This can be an especially powerful tool for those that lack self-discipline.

Remember that sound from Pac-Man when you got caught by one of the Ghosts?   If you don’t get your spending under control, that is what your personal financial picture will look and sound like as well.  Use these smart money moves to get your debt under control and make your cash work toward making work optional one day soon!

Written by:

Ted Jenkin

Request a FREE consultation: www.oxygenfinancial.net

Next

Why Kroger Got This Moms Order

Sign Up

Sign up for our exclusive Sunday Paper with a weekly market commentary, insightful personal finance blogs, and life changing education guides.

Email sign up

Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. oXYGen Financial is not affiliated with Kestra IS or Kestra AS. Kestra IS and Kestra AS do not provide tax or legal advice.

This site is published for residents of the United States only. Registered Representatives of Kestra IS and Investment Advisor Representatives of Kestra AS may only conduct business with residents of the states and jurisdictions in which they are properly registered. Therefore, a response to a request for information may be delayed. Not all products and services referenced on this site are available in every state and through every representative or advisor listed. For additional information, please contact Kestra IS Compliance Department at 844-553-7872.

PLEASE NOTE: The information being provided is strictly as a courtesy. When you link to any of the web sites provided here, you are leaving this web site. Kestra IS and Kestra AS makes no representation as to the completeness or accuracy of information provided at these web sites. Nor is Kestra IS and Kestra AS liable for any direct or indirect technical or system issues or any consequences arising out of your access to or your use of third-party technologies, web sites, information and programs made available through this web site. When you access one of these web sites, you are leaving our web site and assume total responsibility and risk for your use of the web sites you are linking to.