We grew up with MTV, the Rubik’s Cube, Reaganomics, and “Who shot J.R?” Our parents were Baby Boomers and they were no strangers to tough times. They lived through international and national turmoil, staggering gas lines, Vietnam, and more. They sacrificed, they saved their money, and they wanted to make the world a better place. Welcome, Generation X! So, if our parents were so awesome and we were supposed to have it easy, why the hell aren’t more Gen-Xers on FIRE?
Gen-Xers, also dubbed the Sandwich Generation and America’s Middle Child is a small generation in between two behemoths: Baby Boomers & Millennials. The quintessential decade for Gen-Xers was the 1980s. The 80s were a time of flamboyance, excess, and image. This is evidenced by shows like Miami Vice and Dallas. As long as you looked good, no one cared how much was in your bank account. But youth is now fading and savings rates aren’t growing for most of the forgotten generation.
It’s true that Gen-Xers might not be saving as much as their younger cohorts, the Millennials, but there are BIG reasons for this. Their finances are being pulled in a myriad of different directions. Ultimately, their savings rate is suffering.
According to this chart, Mr. MMM and I have fallen within both categories in the past few years. My mother no longer lives in the house, but she did for about a year. Regardless of her current change of address, we still supplement her income.
Not all Boomer parents were well-prepared for retirement. We are in such a category. Mr. MMM’s parents struggle to make ends meet but have not yet needed any financial assistance from us. My mother, on the other hand, has not been so lucky. My mother and father were completely ill-prepared for the inevitability of growing old. Neither my mother nor father ever had a high-paying job. My mother stayed at home to raise four children, while my father worked full-time as a custodian to pay rent and put food on the table. I had a loving childhood, but my parents didn’t have the means or know-how to invest for their golden years. So they didn’t.
When my father passed away a few years ago, my mother was left with only social security, like so many other people her age. This means, any additional monies she needs for things like car repairs, health premiums, and even food has to come from somewhere else. That somewhere else is our bank account. Of course we are helping her, but it is yet another tug on our personal finances which inevitably slows us down.
Related: A Tiny Freedom Gift
Mr. MMM and I only have one child (so far). However, even with only one child, we are still taxed, financially, to give her a nice childhood with a few extras. We do not buy her toys incessantly. In fact, she only gets toys on special occasions. We do not buy her new clothes every time the season changes. We do not succumb to the pressure of our peers to throw extravagant birthday parties with invites going out to every member of her elementary class. No way. What we are trying to do is take her on vacations each summer to give her wonderful memories that will last a lifetime and save enough money to pay for a modest college education.
Fortunately, Mr. MMM and I were both able to attain good jobs that pay well in order to offset some of the extras that are coming out for my mother and our daughter. We also need to maintain our household, including mortgage, utilities, insurances, food, vehicles, etc. In order for us to maintain our goal of early retirement AND field the additional caregiver costs, we live an extremely frugal lifestyle. We are able to have a savings rate hovering around 70% because we spend very little on most things. We don’t have a big house. We don’t do cable. And our entertainment budget is almost non-existent. See here a post about stuff we just stopped buying.
So Why Aren’t More Gen-Xers on FIRE?
I would love to know the answer to this question. Maybe Gen-Xers carried feelings of a carefree childhood into adulthood. Maybe Gen-Xers never thought they’d get older. Maybe Gen-Xers didn’t anticipate the skyrocketing costs of childcare or higher education for their children. Maybe Gen-Xers didn’t expect to also be helping their parents. Or, maybe it’s because there was little attention given to the importance of investing early in life before LIFE got in their way.
Millennials have the luxury of growing up in the information age. Anyone with Internet access can quickly and easily learn the ins and outs of investing and wealth building before even leaving high school. Gen-X didn’t have access to such information until they already had massive student loan debt and a high-interest mortgage.
Excuses? Maybe. Reality? Maybe.
I can say this for certain, Mr. MMM and I would probably already be early retired had we had access to a plethora of financial independence/early retirement blogs when we were in our early 20s, as opposed to our late 30s. Sucks for us – but we’re still enjoying the journey. Cheers!
What do you think? Are you an X-er, Millennial, or Boomer? How do your finances stack up against your peers? Oh, and bonus points if you actually know who shot J.R. without using Google 😉
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