“Older and wiser.” Is this statement true when it comes to finances? There’s no doubt our age and life experiences affect our goals and decisions, especially when it comes to money. It’s natural for people to focus on different financial goals depending on the stage of life they’re in. You can achieve financial stability at any age, even in unstable times like these. A recent survey from COUNTRY Financial found that 76 percent of Americans developed new financial skills over the last year, such as cutting unnecessary spending, paying down debt and putting money aside for an emergency.
These unprecedented times have impacted different generations in varying ways. The survey found that while each generation has reacted differently when it comes to their financial well-being, they’ve each established financial goals to work toward. COUNTRY Financial representative Michael Trupia talks through some of these financial goals and the strategies each generation should focus on.
According to the Census Bureau, the baby-boomer generation is defined as individuals born between 1946 and 1964. This means people in the baby-boomer generation are currently in their mid-50s to mid-70s. Many in this generation are retired or looking to retire in the near future. Trupia said the most common concern of people in this generation is planning for healthcare and retirement.
How baby boomers have responded financially to these unprecedented times
The survey by COUNTRY Financial found that baby boomers are the generation “most likely to feel financially secure;” however, they are also the “most likely to say the 2020 election has made them less confident about their financial security.” The survey says many members of this generation claim that the COVID-19 pandemic has not affected their finances.
Strategies baby boomers should focus on to achieve financial stability
The survey shows baby boomers’ top financial goals are to control their spending, pay down debt and save money for emergencies.
Trupia explains that while these are good financial goals for this generation, there may be a better option when considering paying down debt - depending on the type of debt. “Sometimes paying off a mortgage in a low-interest-rate environment is not always the best idea. Liquidity may be better. Retail debt should always be reduced or eliminated,” Trupia said. He goes on to suggest that, “Baby Boomers need to start looking closer at distribution and conserving” their funds.
Generation X is the generation between baby boomers and millennials. People in this generation are currently in their late-30s to mid-50s. Many in this generation are working toward retirement. Trupia also said many in this generation are concerned with what more they should or could be doing with their money.
How Generation-Xers have responded financially to these unprecedented times
The survey shows that Generation X has a lot of similarities to both baby boomers and millennials depending on the situation.
Like the baby-boomer generation, Generation-Xers are more likely to feel secure about their current financial situation and more likely to feel financially prepared for retirement. They are also more likely to feel less optimistic about their future finances.
Like millennials, Generation-Xers are more likely to say the COVID-19 pandemic has negatively impacted their finances. Also like millennials, one of their top financial goals is to save for retirement.
Strategies Generation X should focus on to achieve financial stability
Generation-Xers are prioritizing saving for retirement, controlling their spending and saving their money for an emergency, according to the survey. Trupia supports these financial goals for this generation. He said that in addition to saving for retirement, it’s important for both Generation-Xers and baby boomers to talk with a tax professional to learn more about “how taxation is impacting what they already have, and then understand their personal goals going forward.”
The millennial generation is defined as individuals born between 1982 and 2000, according to the Census Bureau. This means people in the millennial generation are currently in their early-20s to late-30s. Many in this generation are in school, starting a family and building their career.
How millennials have responded financially to these unprecedented times
According to the survey, millennials are least likely to feel financially secure. Like Generation X, they feel the COVID-19 pandemic has negatively impacted their finances - so much so that 15% reported they delayed purchasing a home because of the events of 2020.
Unlike baby boomers and Generation-Xers, millennials are “significantly more likely to feel optimistic about their finances in 2021,” the survey noted.
Strategies millennials should focus on to achieve financial stability
Millennials’ top financial goals are to save for emergencies, pay down debt, control their spending and save their money for retirement. Trupia agrees these are the right priorities for this generation. “Time is on their side,” Trupia said. This age group has the opportunity to save slowly and plan long-term for their retirement.
Generation Z is the generation born after millennials. People in this generation are currently in their early-20s or younger. Many in this generation are in college or still in high school.
How Generation Z have responded financially to these unprecedented times
Generation Z sits in the middle with many of the statistics found in this study. They feel optimistic about their future finances while simultaneously feeling secure about their current finances. They agree with millennials and Generation-Xers on feeling COVID-19 has negatively impacted their finances. They do not feel as prepared for retirement as the baby boomer generation or Generation X.
Strategies Generation Z should focus on to achieve financial stability
The study found that Generation-Zers are financially focused on controlling their spending, saving their money for an emergency, paying down debt and purchasing a car. “The key is learning to save. If they learn to save at this age and are able to receive gratification for this effort, this is a fantastic strategy to realize at this age,” Trupia said.
Key strategy for each generation
Trupia’s top key strategy for each generation, regardless of circumstance, is to “work with a financial professional, have a plan and review that plan annually.” Trupia says that uncertain times come and go and there are always varying situations. The key is to have a solid plan to get you through the good times and the tough times.
“Regardless of the age group, it all comes back to ways of securing your finances by controlling what you can versus getting fixated on the things you can’t control,” Trupia said. “While we tend to get passionate about the pandemic, the government and the stock market, it’s important to keep the perspective that these things are not all 100% within our control. Rather than getting emotional about the things you can’t control, look to the things that you do have control over like your job, how much you’re spending and how much you’re saving.”
Trupia adds while many of the financial issues and decisions people are facing today seem complex, when you work with a trusted financial professional you can develop a plan to simplify and work through these potentially overwhelming situations.
Visit COUNTRY Financial for resources to help you achieve your financial goals in 2021.