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Experts share six money management tips for Generation X to have financially secure future

As this generation reaches its peak earning years and takes on the responsibilities of families and even grandparenthood, it's crucial to sharpen financial skills.

Experts share six money management tips for Generation X to have financially secure future
Representative Cover Image Source: Pexels | Tima Miroshnichenko

People born between 1965 and 1980, also known as Generation X, often find themselves in a unique position as the "middle child" generation, sandwiched between the baby boomers and millennials. They are characterized by their resourcefulness, independence, and a strong desire to maintain work-life balance. As Gen Xers reach their higher-earning years, establish families, and even become grandparents, it's essential for them to sharpen their financial skills. To ensure financial stability in both the present and the future, some experts spoke to Yahoo! Finance and recommended these six key money skills.

Representative Image Source: Pexels | 
Karolina Grabowska
Representative Image Source: Pexels | Karolina Grabowska

The first thing to do is to have an emergency fund. Regardless of age, an emergency fund is a financial safety net. Michael Hammelburger, the CEO and financial consultant of The Bottom Line Group, underscores the importance of Gen Xers having an emergency fund capable of covering at least three to six months of living expenses. This safeguard provides protection in case of job loss or unforeseen medical emergencies. Secondly, always have an investment strategy. Hammelburger advises Gen X to prioritize investment planning to enhance their wealth over time. Diversifying portfolios across various asset classes and regularly monitoring investments align with financial objectives, ensuring a robust and balanced strategy.

The third thing to keep in mind is to ensure that you are investing in real estate. Diversifying investments is vital at this stage of life. According to Jeff Mains, CEO of Champion Leadership Group LLC, real estate is an attractive option for Gen Xers, offering the opportunity to diversify their investment portfolio and generate passive income. Low interest rates make it a favorable time to invest in rental properties, potentially providing steady income and long-term value. Especially for those seeking a hands-off approach, real estate investment trusts (REITs) offer an indirect way to invest in income-producing real estate properties without the hassles of property management.

Representative Image Source: Pexels | Tima Miroshnichenko
Representative Image Source: Pexels | Tima Miroshnichenko

The fourth tip is a big one, debt management. Mains advises Gen Xers to prioritize debt management, especially as retirement approaches. Creating a budget that systematically pays off high-interest debts like credit card balances and personal loans can lead to substantial interest savings. Consider consolidating debts into one payment with a lower interest rate for easier management. Hammelburger echoes this sentiment, emphasizing the importance of tackling high-interest debts like mortgage loans, auto loans and credit card balances. A well-devised repayment plan can help Gen Xers effectively manage their debt load.

Representative Image Source: Pexels | Tima Miroshnichenko
Representative Image Source: Pexels | Tima Miroshnichenko

The fifth tip is to save for college. As parents, Gen Xers should plan for their children's college expenses. Opening a 529 college savings plan or exploring other investment options is crucial, says Hammelburger. Starting early allows for more significant savings, and seeking scholarships and grants can help offset the high cost of education. 

Last but not least, make sure you plan your retirement well. Retirement may seem distant, but it's never too early to plan. As Hammelburger emphasizes, Gen Xers in their 40s and 50s should create a retirement plan and determine their monthly savings goals. Contributing to 401(k) or IRA accounts is essential, and diversifying investments through stocks and bonds can help secure their financial future. Bennett Heyn, CEO of Parker Marker suggests exploring Roth IRAs to save for retirement tax-free, providing an additional avenue for financial security.

Representative Image Source: Pexels | Andrea Piacquadio
Representative Image Source: Pexels | Andrea Piacquadio

Gen X, which is characterized by their unique generational traits, faces the responsibility of securing their financial future. These six money skills, encompassing debt management, real estate investment, retirement planning, college savings, investment strategy, and emergency fund building, are essential tools for achieving financial stability and enjoying the fruits of their hard-earned labor.

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