Best money tips for Gen Xers in a shaky economy – CNET | Mega Mediakw

This story is part of So Money (subscribe here)an online community dedicated to financial empowerment and advice, led by CNET Editor at Large and So Money podcast host Farnoosh Torabi.

Wedged between millennials and baby boomers, Generation X (of which I consider myself a proud member) has been somewhat overlooked when it comes to financial advice. And chances are, as a person of color, you feel completely ignored within this demographic. If you were born between the mid 1960’s and 1980’s it is often assumed that you have plenty of it savingsa sturdy one retirement plan and no money problems or debt.

Not really. We also fight at critical points.

On the one hand, Gen X has managed to stay afloat financially more than older and younger generations. Generation Xers were hit particularly hard during the Great Recession, but were the only generation of households to regain the wealth they lost between 2007 and 2010, with many lucky enough to hold on to assets and keep working, according to Pew Research.

Our generation also paid less for college than Millennials (born 1981-1996) and Gen Z (born 1997-2012). In 1995, the average annual cost of attending a four-year institution was just over $10,000, compared to $28,000 today. And chances are we didn’t go into a deep recession after we graduated.

Still, the journey for Gen Xers has been far from linear or painless. Although we may not need as much advice Consolidating our student loansmarrying or divorcing, raising children or caring for aging parents, we could use tailored financial advice and unconventional strategies, especially in today’s economy.

“We’re really at that moment in our careers and our lives where everything is happening, whether it’s in our jobs, in our relationships … I don’t want to be a downer, but … it’s a lot,” said editor Margit Detweiler. Detweiler is the founder of TueNight.com, a storytelling platform for what she describes as “Generation X adult women”.

Financial advice for my Gen X colleagues could span several books, but let’s start with these five steps.

1. Career: Don’t give up, even when the going gets tough

At the moment, the job market is still considered “hot” with an unemployment rate of 3.6%, close to the pre-pandemic low. But lately, as worries about a possible recession mount, we’ve seen more job cuts and hiring freezes. So far the majority redundancies are primarily in industries that were growing at the start of the COVID-19 shutdowns and are now facing slowing consumer demand.

When you lose your job in your 50s, finding employment can feel impossible. But don’t give up. Consider expanding your job search to other types of companies. For example, hospitality, foodservice, education, healthcare, and wholesale and retail trades are currently experiencing higher job vacancy rates, according to a June report from the US Chamber of Commerce.

And if you’ve been climbing in your career for a decade or two but hitting a plateau, get inspired by the many examples of people who have made great leaps in their careers or turned to entrepreneurship later in life. Julia Child, for example, wrote her first cookbook, Mastering the Art of French Cooking, at age 49 after years of working in advertising. Viola Davis worked as a performer for decades before her career took off in her early 40s when she starred in the film Doubt and was nominated for an Oscar for her role.

2. Retirement: Load up on your savings

Don’t kill the messenger, but some investment firms suggest having about three times your annual salary in a retirement account until age 40. By the age of 50, this recommended factor increases to five. This may feel like an outrageous sum, but it’s fair to say that the burden of Saving for retirement is very personal these days. With pensions dying out (for the most part) and uncertainty about the fate of Social Security, saving for our future has never been more important.

If you have access to a workplace retirement account like a 401(k) and have reached age 50, you know you can catch up by putting in an extra $6,500 this year. IRA savers age 50 and older can invest an additional $1,000.

We are currently in one bear market, or a sustained period of falling stock market trends. If you’re nearing retirement — or in the early stages of retirement — and your portfolio has taken a beating over the past few months, it might be worth reviewing your exposure to stocks with the help of a financial professional. If you’re scared of recent market volatility, it could mean you’re less risk-averse and need to reevaluate.

This could also be a good time to reconsider your retirement age. If you had to work part-time or full-time in your 60s and in your 70s, what would your ideal role be? Early strategic planning is never a bad thing.

3. Debt: Don’t worry about paying off your mortgage

The idea of ​​retiring without a mortgage sounds reassuring, but in reality it can mean making extra payments every year to get there. Is it worth? If you have many financial goals vying for your attention right now – from saving for retirement to sending a child to school or supporting an aging parent – then don’t worry about paying off your mortgage now.

If you got a mortgage before 2022, your fixed rate is likely very low, and speeding up your mortgage repayment probably isn’t worth it, especially when a recession looms. During an economic downturn, it’s better to put that money in a savings account when you need more cash, or focus on the financial moves that produce a higher return, such as B. Investments.

4. Family Finances: Crack the money talk with your parents

While it may be awkward to talk about money with our parents, it can be mutually beneficial. In tough economic times, parents can be a resource because they have seen many economic cycles and can offer some perspective.

The other more important details can be… trickier. But it’s important to discuss whether your parents have a will or trust, and whether they have appointed a power of attorney (someone who can make financial decisions when they are unable to).

Cameron Huddleston, author of Mom and Dad, We Need to Talk, joined me on my podcast to talk about her mother’s battle with Alzheimer’s. Huddleston wished she had discussed money with her mother before the diagnosis. “When I saw that she was having trouble with her memory, it suddenly wasn’t a what-if conversation anymore. It was, ‘Oh my god. Happens. What we gonna do?’ That’s why people need to have these conversations sooner rather than later…so they can talk about hypothetical situations. Not: “We are now in the middle of it. It’s an emergency with this one?'”

A smart way to start the conversation, according to Huddleston, is to use a personal story from someone you know who’s been through tough times for not talking to a parent about money. At this point in life, “I’m sure you know someone who has already dealt with problems.”

5. Kids College: You’re not a bad parent if you can’t afford it

Really, you’re not. When your child goes to college and you don’t saved for this effort, Do what you can. But also remember that students can do a lot themselves to reduce the cost burden. While sacrificing your own retirement or drawing on emergency savings may be tempting, it will haunt you — and your adult child — if you find it difficult to replenish those funds later.

A crucial part of college planning is discussing all the affordable avenues with your child — and there are many, like z or thinking about a career, where Student loan forgiveness is a possible option. And remember, college may not be the ideal path for everyone. Vocational school, coding boot camps, and apprenticeships are all valid alternatives these days.

Also note the following: Open a 529 college savings account where your money can earn interest and you can get a tax break depending on the state. If your kid is a long way out of college and saving is proving difficult these days, don’t sweat it.

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