Welcome back to my Milestone Money series! We’re talking about Generation X, those born as early as 1965 and as late as 1980. This is a middle point of life where you’re in your 40s or 50s, may have dependent children still, but are growing ever nearer to retirement.

GenX is a unique generation. They’re children of Baby Boomers… the generation that saw televisions come into every home, two cars in every driveway, and a huge push out to the suburbs. This generation is also the children of high divorce rates, an elevated comfort (and almost expectation) of having debt, and never really being “debt-free” in your lifetime. Their parents worked hard but didn’t often have open communication about money and finance, so they either learned about money from observing how their family interacted with it or figured it out on their own. GenX saw a rise in post-secondary education, meaning student loan debt and early access to credit… and some uninformed choices.

And now GenX continues to be stuck in the middle. They’ve become the sandwich generation, now caregiving for both their parents and children (and even grandchildren). This has seen people leaving the workforce to juggle it all or continue to work and hire help at great expense.

There’s a lot to be thinking about at this time of your life. We’ll touch upon just the top 6 you need to have on your radar:

 

1) Get in the habit of living below your means

You likely started adulthood with debt… whether it was student debt or just early and irresponsible use of credit as a young adult. Through your 20s and 30s, you married, got your first home, and the biggest expense of all — children. Now’s the time to really look at your finances (if you haven’t already) and make a habit of living below your means. Whether you’re currently servicing debt or not, with the current shifts in today’s economy (inflation, rising interest rates), spending less than you earn will only help you to ensure you have sufficient savings, and can better prepare you for retirement. Yes, you should be thinking about funding your retirement at this point, if you haven’t already.

 

2) Check off your long-time to-dos

No, I don’t mean finally fixing that broken thing in the house. Your FINANCIAL to-dos. Is there something you’ve “always been meaning to” do but just haven’t gotten around to it? Maybe it’s getting a Will and Powers of Attorney done, or life insurance to protect your family (and your partner’s retirement). After all, crowdfunding is not life insurance, and you should be taking care of your own instead of expecting your community and strangers to do it once you’re gone. Sit down and just get it all done… your future self will thank you.

 

3) Protect your most important asset

Do you know what that is? Well, you likely already have insurance protection for your home, its contents, and your automobile. You may even have life insurance to protect your loved ones. As precious to you as those all may be, they’re still not your most important asset. In fact, your ability to earn an income is. After all, that allows you to pay for your home, car, and provide for your family. So, if you don’t have sufficient disability coverage in an employer-sponsored group plan, or are self-employed without coverage in place, you should absolutely be looking into that.

“But Jenn, what if I don’t have a traditional employment, and instead stay home to care for my family?” You still contribute to the household and having some Accident & Sickness coverage is valuable. Think about the worst-case scenario — a long-term illness that will not only make it difficult for your partner to continue working and juggling your duties, but will include additional healthcare expenses and exhaustion. Wouldn’t it be helpful to have extra tax-free money coming into the household to hire a cleaning service, meal prep service, or in-home care for you and your children. Disability Income Protection frees you from having to deplete your savings, putting off retirement, and racking up debt.

 

4) Talk about your final wishes and estate plans

You may still think that you’re invincible or that estate planning is for “old people”. Well, we’re not spring chickens anymore, and it doesn’t hurt to have some of those difficult conversations with our partners, loved ones, and even parents so that those who need to know, do know what your final wishes are. Afterward, sit down with the proper professionals (lawyer, financial advisor, accountant) to make sure it can all happen in a tax-efficient way.

 

5) Educate your children to form good habits

You may have teenage or young adult children who are getting their first jobs, handling money more and more, and you want to equip them with the knowledge so that they can make good habits from the start. This includes teaching them some basics that they may or may not have learned in high school, including the 50/40/10 Rule: 50% of your income to be allocated towards your needs, regular living expenses, etc; 40% to savings, and 10% to wants. Now, as young adults they may be using an 80/20 rule — 80% wants, 20% needs, NO SAVINGS. This is a bad habit to get into, and you are in a perfect position to help them avoid that.

 

6) Gift your inheritance while you’re still alive

You may be feeling like you’re too young to be considering this, but in fact, it’s the perfect time to be looking at helping your children by gifting to them part of their inheritance at this stage in your life. What are some advantages to you? You have time to make it up before you retire; you’re helping them today knowing the cost of what they need in today’s dollars, not in the future; you can gift an amount that makes real impact, instead of becoming the “bank of mom & dad” and get nickel and dimed over many years. Consult with your financial advisor if this is something you’d like to consider, to find the most tax-efficient and best way to do this that will impact your retirement plan the least.

 

There’s a lot to absorb there, but before all of it, sit down with a financial professional to either create or update your financial plans.