3 Boomer Money Habits for Gen Z To Adopt To Build Wealth
Written by
J. Arky
Edited by
Zuri Anderson
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As the sands pass through the hourglass, one age of people steps down while another one steps up. That doesn’t mean that wisdom and knowledge isn’t passed down from one generation to the other, even if the younger thinks the older has nothing to offer.
That’s certainly not the case when it comes to baby boomers, those people currently in their 60’s and 70’s, who know a thing or two about money habits to build wealth which Gen Z, people now in their late teens and early 20’s, can use to their advantage.
Louis Brion, the CEO at Lakefront Finance, highlighted that “[w]hile the economy and quality of life is vastly different from the time baby boomers were the age that Gen Zers are now, there are cross generational strategies, habits and mindsets that have helped people build wealth that will always work: Limiting your spending, increasing your income and building a diversified portfolio of investment.”
GOBankingRates asked Brion to break down the three boomer money habits for Gen Z to adopt to build wealth.
3. Mindful Budgeting and Spending
As Brion laid it out, before the advent of credit cards, “there used to be something called a checkbook which households used to track money going in and out of their bank accounts. When paying for things, often times checks were the payment method of choice, and it could take days or even weeks before money for a purchase left your bank account.”
Budgeting and financial planning helps you think ahead about potential purchases and make sure all of your needs are covered before you buy that new piece of technology, according to Brion.
“In an age of social media, lifestyle creep and [fear of missing out] FOMO go hand in hand,” Brion continued. “Keeping up with the Joneses is a phrase you may have heard your parents or grandparents say that means the same thing. Just because your neighbor, friend or coworker gets a new phone, car or clothes doesn’t mean that you (or even they) can afford it.
“While treating yourself is important, it’s also important to think of your future self before making any impulse purchases in a world full of technology trying to part you from your money.”
2. Increasing Your Income While Avoiding Lifestyle Creep
Brion said even if you’re more aware of how you’re spending, if your entire paycheck is spent on needs, you will never be able to buy things you want in a responsible way or save money for things like retirement in the future.
“Once your spending is under control, the next thing you should focus on is increasing your income from your work,” advised Brion. “More experience in a field, certifications, education, and entrepreneurial spirit all help you increase your income. Individuals with bachelor’s degrees in in-demand industries vastly out-earn their peers without a college education over the duration of their careers.”
One thing to balance is to advocate for yourself at work, making sure that increased responsibilities come with additional pay so that your employer ensures you are credited and values the work you do, something Boomers have done for decades. However, Gen Z should make sure to carefully use whatever newly-increased income they do end up earning.
“Even when you get a higher income through increased skills and responsibilities, it’s important to not squander the extra money each paycheck into lifestyle creep and instead be mindful of your budgeting and look towards the next point: Investments,” Brion added.
1. Make Your Money Work for You
This means investing your money, compounding your interest and growing your money so that you do not have to worry about it as much in the future.
Boomers were able to accumulate wealth by starting young, which means Gen Z is in the perfect position to start putting their money towards growth.
“By being mindful of your spending and increasing your income by investing in yourself and your skills, you will have more money each paycheck after all of your expenses,” shared Brion. “With that money you can then start to accumulate investments that will grow your wealth even further, without you having to work.”
One thing Brion advised Gen Z to note of “is that while these assets may look appealing, not all assets appreciate and not all appreciating assets appreciate forever.
“Before you invest, learn about the different risks of each kind of investment and consider diversification in order to prevent large losses. At the end of the day, real wealth isn’t about how much you make, it’s about how much you are able to save.”
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