As society changes and different factors come into play, we see many financial decisions that maybe haven’t worked out for the best. These might even be visible within our own family. So what are the financial fallouts that previous generations have made? And how can we help the next generation learn from these.
Born between 1946 and 1964 – Baby boomers
The baby boomers have seen some advantages of being born during the post second-world war boom. They’ve seen their house value increase tremendously, which certainly helped to make their financial situation a little easier. However, they haven’t been without their own set of financial mistakes.
When asked as part of a recent study by Standard Life, one in five of those approaching retirement (the baby boomers) admitted wishing the same.
A study by HSBC suggested found Britons were likely to live for 19 years post-retirement, but had only enough savings, on average, to cover seven years of it.
Born between 1960s to the early 1980s - Generation X
In an economy that encouraged a ‘boom or bust’ attitude to work, it’s no surprise that Generation X are slightly less stable in their approach to finances than other generations. Investing heavily in shares and stocks, turned out to be a mistake for this generation thanks to the market crash.
Generation X struggles the most with debt and paying bills on time, they may be particularly concerned about the impact of debt and late payments on their credit score, especially if they plan to refinance their debt or take out a mortgage to buy a new home.
Born between 1980s to early 2000s – Millennials
Starting out in the recession is hitting Millennials quite hard. With the job market still slow and a larger student debt than that of previous generations, millennials are finding themselves in a bit of a pickle. Millennials are misusing credit cards and pay day loan services, leading to them having bad credit scores.
Millennials are finding it harder to get on the property ladder, choosing to rent long term, travel and explore, rather than opposed to investing their money in property. 70% of millennials have not yet started to save for retirement (www.lifehappens.org), showing that they have certainly not learnt from the mistakes of previous generations.
Another interesting trend has emerged from this generation, their reluctance to invest. This reluctance reflects that of the World War II generation. Careful as they may be, Warren Buffet didn’t become the richest man in the world without investing.
Born since 2005 to the present and beyond – Tomorrow’s Generation
Looking at the different challenges and mistakes of previous generations, regardless of which one you belong to, will help us to learn and to teach the generation of tomorrow.
Understanding financial concepts, such as interest and risk will help our future generations make wiser choices and avoid misusing credit cards and pay-day loans.
Helping to remove the mystery that surrounds investing by educating our future generations will make it more accessible for young people to invest sensibly for their future.
Let’s make sure our next generations are prepared for their own future. It is important that our society helps support young people in doing this and we provide them with the tools and education they need.