Why Generation X Should Rethink DIY Finances

Ross Quade | Financial | 29 Aug, 2014 | No Comments

Those that are considered Generation X, which is anyone who was born between the years 1965 and 1980, are known to be extreme product stalkers. This means that they do their research on everything they buy from a simple pair of jeans to home appliances. You would think this implies that they’d be very effective at managing their own finances such as their life insurance and retirement savings. However, the only thing that Generation Xers seem to be good at is racking up debt, spending money and not doing the work in order to prepare for their future. Although there are some Generation Xers that are successful at DIY financing, most have failed miserably at it. This could be due to the fact that many Gen Xers think that they have all the time in the world to figure out their finances and that they will magically think of a way to put them on the right financial path. Nonetheless, it’s high time that Generation X seeks financial experts’ advice when it comes to their finances and rethink the whole DIY finance concept.

The Statistics on DIY Financing

One recent study found that there is a huge distinction between what Gen Xers think they are able to accomplish when it comes to their retirement planning and the reality of their situation. The study also found that the average amount of money that Generation Xers saved for retirement was $90,400. This is twice as much as the amount that could be saved by Gen Xers who did not get the help of a financial planner. Yet, fewer Generation Xers are using financial planners than ever before. At the moment 77% of Gen Xers are not using a financial planner, which is up from 63% just two years prior. This is largely because Gen Xers are a generation that aims at being self-sufficient when it comes to finances due to the fact that they grew up in a time when the economy was quite unstable and many financial institutions wavered. On top of this, many Gen Xers don’t trust that a financial planner will have their best interest at heart.

Life Insurance

When it comes to protecting their loved ones in the case that the unthinkable happens, many Gen Xers are using the DIY approach as well, even when it is to the detriment of their loved ones. In fact one survey found that the gap between what Gen Xers should have in terms of life insurance and what they actually have was greater than $449,000. That’s better than the 20% of Generation Xers who have no life insurance whatsoever. This can be contributed to people’s willingness to give up their life insurance policy when they are strapped for cash. However, a life insurance policy is the last thing someone should cut when they are financially struggling.

Why Life Insurance is So Important

If you are strapped for cash now then imagine what your family will go through if you pass away prematurely. Without a life insurance policy your loved ones will likely be pulled into a financial crisis no matter what kind of DIY tactic you utilize, this is especially the case if you have serious outstanding loans. Even if you are unable to afford the coverage you need, there are still options out there for you. Keep in mind that at the end of the day some life insurance coverage is better than having none at all. It pays off to look for coverage sooner rather than later, and it is recommended that you do whatever you can in order to afford a policy.

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