{"id":277,"date":"2019-10-15T16:13:48","date_gmt":"2019-10-15T16:13:48","guid":{"rendered":"http:\/\/ladintax.com\/blog\/2019\/10\/15\/generational-differences-in-handling-money\/"},"modified":"2019-10-15T16:13:48","modified_gmt":"2019-10-15T16:13:48","slug":"generational-differences-in-handling-money","status":"publish","type":"post","link":"http:\/\/ladintax.com\/blog\/2019\/10\/15\/generational-differences-in-handling-money\/","title":{"rendered":"Generational Differences in Handling Money"},"content":{"rendered":"<div>\n<p>The baby boom generation is the<br \/>\ndemographic engine that has driven U.S. economic growth over the past 50 years.<br \/>\nBut now, as boomers work less, spend less, retire and draw on retirement funds,<br \/>\nthat baton is being handed over to Generation X and millennials. The economy is<br \/>\nfueled by consumer spending, so the people who buy the most cars, houses,<br \/>\nstaples and luxury items are in a position to call the shots. How will younger<br \/>\ngenerations handle their wealth and power?<\/p>\n<p>But first, here\u2019s a quick rundown<br \/>\nof the generations, according to the Pew Research Center:<sup>1<\/sup><\/p>\n<ul>\n<li>Silent<br \/>\ngeneration: Born 1928 \u2013 1945<\/li>\n<li>Baby boomers:<br \/>\nBorn 1946 \u2013 1964<\/li>\n<li>Generation X:<br \/>\nBorn 1965 \u2013 1980<\/li>\n<li>Millennials: Born<br \/>\n1981 \u2013 1996<\/li>\n<li>Generation Z:<br \/>\nBorn 1997 \u2013 2012<\/li>\n<\/ul>\n<p>Regarding Gen Xers and<br \/>\nmillennials\u2019 attitudes about money, a recent study shows millennials, in<br \/>\nparticular, have shown more interest than their elders in seeking guidance from<br \/>\nfinancial professionals at a younger age. For them, it\u2019s not about waiting until<br \/>\nthey\u2019re close to retirement age to get professional input. They seek it after<br \/>\nthey reach milestones such as getting married, having children and making a big<br \/>\npurchase.<sup>2<\/sup><\/p>\n<p>In some ways, the millennial<br \/>\ngeneration resembles the silent generation in its approach to money. One<br \/>\nexperienced the Great Depression, while the other weathered the 2008 recession<br \/>\nas burgeoning adults \u2014 aware of the impact that loss can have on a household.<sup>3<\/sup><br \/>\nThese lessons can run deep and don\u2019t often go away, even after people recover<br \/>\nand accumulate wealth. That\u2019s not necessarily a bad thing. If you\u2019re interested<br \/>\nin feeling more confident about your own financial future, we have some ideas<br \/>\nthat can help you achieve your goals. Feel free to give us a call.<\/p>\n<p>According to the Bureau of Labor<br \/>\nStatistics\u2019 Consumer Expenditure Survey, here\u2019s what the different demographics<br \/>\nspend, on average, on housing:<sup>4<\/sup><\/p>\n<ul>\n<li>Millennials spend<br \/>\nnearly $17,000 on housing each year, which is around 35% of their total annual<br \/>\nspending.<\/li>\n<li>Only one-third of<br \/>\nmillennials own a home, although the demographic as a whole is the largest<br \/>\ngeneration of homebuyers.<\/li>\n<li>Gen Xers spend nearly<br \/>\n$23,000 a year on their homes, which is 33% of their total annual spending.<\/li>\n<li>Three in five Gen<br \/>\nXers own a home.<\/li>\n<li>Baby boomers spend<br \/>\nan average of $19,000 a year on housing, accounting for 31% of their annual<br \/>\nspending.<\/li>\n<li>Three-quarters of<br \/>\nbaby boomers own their home; nearly half are mortgage free.<\/li>\n<li>Among the silent<br \/>\ngeneration, housing accounts for 35% of their spending.<\/li>\n<li>Nearly 80%<br \/>\npercent of the elderly own a home; 40% still pay on a mortgage.<\/li>\n<\/ul>\n<p>Baby boomers are throwing a wrench<br \/>\ninto the plans of millennials who may be ready to buy a house. Boomers are<br \/>\nstaying in their homes longer, which is keeping about 1.6 million houses off<br \/>\nthe national residential market, according to a Freddie Mac analysis. This<br \/>\nmeans younger generations don\u2019t have as many choices when they want to buy a<br \/>\nhouse or trade up to a more expensive home.<sup>5<\/sup><\/p>\n<p>One reason for the shortage is<br \/>\nthat more than half of baby boomers plan to age in place and are renovating<br \/>\ntheir homes to accommodate future needs, a recent survey found. To this end,<br \/>\nthe demographic has outspent all other generations in home improvement projects<br \/>\nby nearly a third. This multigenerational trend has bolstered the entire<br \/>\nrenovation industry, as younger buyers, unable to afford pricey houses, are<br \/>\npurchasing older homes and remodeling them to meet their needs. Millennials are<br \/>\ntwice as likely as baby boomers to complete bathroom and kitchen remodeling<br \/>\nprojects and are being called the \u201crenovation generation.\u201d<sup>6<\/sup><\/p>\n<p>Millennials is are also choosing<br \/>\nto travel more than previous generations. In 2019, the average millennial planned<br \/>\nto take about five trips during the year, many of them international. That\u2019s<br \/>\nmore international trips than Gen Xers take, and more overall trips than baby boomers.<br \/>\nHow can they afford to travel so much? Many do it on the cheap, staying at<br \/>\nAirbnb residences instead of hotels, taking shorter trips and scouring the<br \/>\ninternet for transportation deals. On average, frugal millennials in 2019 were<br \/>\nplanning to spend $4,400 on travel compared to $5,400 for Gen Xers and $6,600<br \/>\nfor baby boomers.<sup>7<\/sup><\/p>\n<p><strong><em>Content prepared by Kara Stefan<br \/>\nCommunications.<\/em><\/strong><\/p>\n<p><sup>1<br \/>\n<\/sup>Michael Dimock. Pew Research<br \/>\nCenter. Jan. 17, 2019. \u201cDefining generations: Where Millennials end and<br \/>\nGeneration Z begins.\u201d <a href=\"https:\/\/www.pewresearch.org\/fact-tank\/2019\/01\/17\/where-millennials-end-and-generation-z-begins\/\">https:\/\/www.pewresearch.org\/fact-tank\/2019\/01\/17\/where-millennials-end-and-generation-z-begins\/<\/a>. Accessed Sept. 12, 2019.<\/p>\n<p><sup>2 <\/sup>Global X by Mirae Asset. 2019. \u201cBeyond Baby Boomers: 7<br \/>\nTips to Prepare for the Rise of Millennials and Gen X investors.\u201d <a href=\"https:\/\/cdn.globalxetfs.com\/content\/files\/Beyond-Baby-Boomers-19aug06.pdf\">https:\/\/cdn.globalxetfs.com\/content\/files\/Beyond-Baby-Boomers-19aug06.pdf<\/a>. Accessed Sept. 3, 2019. <\/p>\n<p><sup>3<\/sup> Hillary Hoffower. Business Insider. \u201cThe Great<br \/>\nRecession created a domino effect of financial struggles for millennials \u2014 here<br \/>\nare 5 ways it shaped the generation.\u201d <a href=\"https:\/\/www.businessinsider.com\/how-the-great-recession-affected-millennials-2019-8\">https:\/\/www.businessinsider.com\/how-the-great-recession-affected-millennials-2019-8<\/a>. Accessed Sept. 12, 2019.<\/p>\n<p><sup>4 <\/sup>Taylor Tepper. Bankrate. March 28, 2018. \u201cHow<br \/>\ndifferent generations spend their money.\u201d <a href=\"https:\/\/www.bankrate.com\/banking\/savings\/how-different-generations-spend-boost-savings\/\">https:\/\/www.bankrate.com\/banking\/savings\/how-different-generations-spend-boost-savings\/<\/a>. Accessed Sept. 3, 2019.<\/p>\n<p><sup>5 <\/sup>Joanne Cleaver. Chicago Tribune. June 19, 2019.<br \/>\n\u201cChicago housing market hurdle: As baby boomers stay put, millennials struggle<br \/>\nto find starter homes.\u201d <a href=\"https:\/\/www.chicagotribune.com\/real-estate\/ct-re-millennial-baby-boomer-housing-shortage-20190623-story.html\">https:\/\/www.chicagotribune.com\/real-estate\/ct-re-millennial-baby-boomer-housing-shortage-20190623-story.html<\/a>. Accessed Sept. 12, 2019. <\/p>\n<p><sup>6 <\/sup>Genevieve De Vera. mHelpDeskNews. March 18, 2019. \u201cHousing<br \/>\nand Home Renovation Trends to Know: Millennials vs. Baby Boomers.\u201d <a href=\"https:\/\/news.mhelpdesk.com\/field-service-industries\/housing-and-home-renovation-trends-millennials-baby-boomers\/\">https:\/\/news.mhelpdesk.com\/field-service-industries\/housing-and-home-renovation-trends-millennials-baby-boomers\/<\/a>. Accessed Sept. 3, 2019. <\/p>\n<p><sup>7 <\/sup>Megan Leonhardt. CNBC. Aug. 30, 2019. \u201cMillennials are<br \/>\nmaking travel a priority more than previous generations \u2014 that\u2019s not a bad<br \/>\nthing.\u201d <a href=\"https:\/\/www.cnbc.com\/2019\/08\/30\/millennials-making-travel-a-priority-more-than-previous-generations.html\">https:\/\/www.cnbc.com\/2019\/08\/30\/millennials-making-travel-a-priority-more-than-previous-generations.html<\/a>. Accessed Sept. 3, 2019. <\/p>\n<p><em>We are an independent<br \/>\nfirm helping individuals create retirement strategies using a variety of<br \/>\ninsurance products to custom suit their needs and objectives. This material is<br \/>\nintended to provide general information to help you understand basic retirement<br \/>\nincome strategies and should not be construed as financial advice. <\/em><\/p>\n<p><em>The information<br \/>\ncontained in this material is believed to be reliable, but accuracy and<br \/>\ncompleteness cannot be guaranteed; it is not intended to be used as the sole<br \/>\nbasis for financial decisions. If you are unable to access any of the news<br \/>\narticles and sources through the links provided in this text, please contact us<br \/>\nto request a copy of the desired reference.<\/em><\/p>\n<p>952755B<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>The baby boom generation is the demographic engine that has driven U.S. economic growth over the past 50 years. But now, as boomers work less, spend less, retire and draw on retirement funds, that baton is being handed over to Generation X and millennials. The economy is fueled by consumer spending, so the people who&hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_expiration-date-status":"","_expiration-date":0,"_expiration-date-type":"","_expiration-date-categories":[],"_expiration-date-options":[],"footnotes":""},"categories":[1],"tags":[],"_links":{"self":[{"href":"http:\/\/ladintax.com\/blog\/wp-json\/wp\/v2\/posts\/277"}],"collection":[{"href":"http:\/\/ladintax.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/ladintax.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/ladintax.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/ladintax.com\/blog\/wp-json\/wp\/v2\/comments?post=277"}],"version-history":[{"count":0,"href":"http:\/\/ladintax.com\/blog\/wp-json\/wp\/v2\/posts\/277\/revisions"}],"wp:attachment":[{"href":"http:\/\/ladintax.com\/blog\/wp-json\/wp\/v2\/media?parent=277"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/ladintax.com\/blog\/wp-json\/wp\/v2\/categories?post=277"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/ladintax.com\/blog\/wp-json\/wp\/v2\/tags?post=277"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}