Generation X: Smart Planning for the "Sandwich Years"

 Second in the series ”How Much Debt is Too Much?” Read about Personal Debt and Millennials here.

They’re homeowners who drive sport utility vehicles and remember Ronald Reagan’s presidency. They grew up as latchkey kids with a penchant for Footloose, acid-washed jeans and Duran Duran. Right now, they’re hitting their professional peak, sliding into top level positions as Baby Boomers retire. They’re Generation X: men and women across the United States who fall between the ages of 39 and 53.

Sandwiched between older Baby Boomers and younger Millennials, GenXers have a lot on their minds. Many are juggling full-time work with caring for children and elderly parents. They’re balancing the high cost of daily life with the pressure to save for both college and retirement. And while this generational cohort is nearing the peak of their earning potential, its members are also carrying a good bit of personal debt. According to Northwestern Mutual's 2018 Planning & Progress Study, GenXers have an average debt load of $39,000, not including home mortgages.

For GenXers, taking steps to reduce debt is a fundamental part of planning for the future, says Bank of St. Francisville Vice President of Credit and Internal Audit Robert Hanna.

“Managing debt while continuing to grow your assets is really important at this point in your life," says Bank of St. Francisville Vice President of Credit and Internal Audit Robert Hanna, a GenXer himself.

“It’s definitely possible to survive the expenses of middle age, while also planning for the future,” says Robert, thirty-nine, a GenXer himself. “Managing debt while continuing to grow your assets is really important at this point in your life. 

While GenXers generally earn more in wages than retired Baby Boomers or younger Millennials, they also spend more. Robert says it’s common to see GenXers carry hefty car notes, boat notes, or mortgages on investment property or second homes. They might have even borrowed against their homes to pay for their children to attend college, or to help support the needs of aging parents.

On the other hand, says Robert, some GenXers may be willing to take on more debt because they finally want to take a chance on an entrepreneurial idea.

“At this point in their lives, they’re confident and experienced in their abilities,” says Robert, “They might say, ‘it’s time to start my own business and see that dream through.’”

No matter the source of personal debt, Robert advises GenXers to develop a crystal clear understanding of their debt-to-income ratio, now and into retirement.

“If you know you want to retire in fifteen years and you want to buy a new house, you should be looking for a fifteen-year mortgage, not a thirty-year one,” says Robert. “And let’s face it, things are always more expensive than you think they’re going to be.”

Credit card debt impacts Americans across generations, including GenXers, says Robert.

“It’s really easy for anyone of any age to run up credit cards these days, and it happens for a lot of reasons,” Robert says. “It could be an emergency home expense, or it could be because someone is out of work. Even being out of work for a few months can throw your budget totally out of whack.” 

Consolidating credit card debt is a smart move, says Robert. Bank of St. Francisville offers debt consolidation services that enable customers to pay off multiple, high-interest cards through a single bank loan with the best interest rate possible. 

“Repaying one loan that’s been structured with an affordable monthly rate makes more sense than having to swim upstream with several,high interest credit cards,” Robert says. “It gives customers a chance to finally get ahead.”  

To assist GenXers with retirement planning or saving for college, Bank of St. Francisville partners with Pam and Joe Malara, representatives of Cetera Investment Services,a full-service FINRA member broker-dealer based in Minnesota.  Pam and Joe keep regularly scheduled office hours in the Bank of St. Francisville, or are available by appointment at (225) 635-0047 or (800) 901-0047.  

Need help getting a grasp of your debt-to-income ratio, or consolidating debt? We can help.


Further Reading