In 1989 I was producing the six part PBS television series Making Sense of the Sixties and we wanted to hear what the younger generation – these Denver college students – thought about the values expressed by some in the 1960s. Money was one of the things they wanted to speak about.
Generation X has a unique perspective on money. Their attitudes toward money differ significantly from both Baby Boomers (preceding them) and Millennials.
Baby Boomers grew up during a period of post-WWII economic prosperity, where hard work in a stable job often led to homeownership, job security, and pensions. Money was viewed as a means to achieve the American Dream, often tied to long-term employment and accumulating wealth over time.
Generation X came of age during a period of economic uncertainty, with events such as the 1970s oil crisis, recessions, and the rise of corporate downsizing in the 1980s and 1990s. These experiences fostered skepticism about job security, leading to a more cautious and pragmatic approach to money.
Unlike Baby Boomers, who often prioritized work as central to their identity and success, Gen X values work-life balance. They are seen as the first generation to question the long-term benefits of devoting their entire lives to a single company or career. They are practical and entrepreneurial, valuing independence and side hustles as ways to supplement their income. They don’t necessarily strive for extreme wealth but prefer financial security and stability.
Gen X tends to balance the importance of making money with the importance of family and personal fulfillment. Many grew up with "latchkey kid" experiences, where both parents worked, and they have sought to give their children more attention, even if it means not pursuing the highest-earning career paths.
Gen X is often wary of debt, having witnessed the rise of credit card debt and student loans in their formative years. They tend to prioritize saving for retirement, given the uncertainty they saw in the job market and a diminished faith in pensions or Social Security benefits. This contrasts with Millennials, who are sometimes more accepting of debt, particularly student loans, and may delay saving for retirement due to other financial pressures.
Gen Xers are known for their cynicism toward corporate promises of loyalty and job security. They are less likely than Boomers to trust that their companies will take care of them, making them more focused on self-reliance and having an emergency fund or multiple income streams.
Unlike Boomers, who might have been more focused on the visible symbols of success (such as large houses or luxury cars), Gen Xers are generally more frugal and pragmatic, not as concerned with keeping up with appearances. Their experiences have made them more likely to value experiences and quality of life over material wealth.
Generation X's pragmatic and cautious attitude toward money has impacted their behaviors regarding homeownership, car ownership and vacations.
Gen X experienced delayed entry into the housing market compared to Baby Boomers, primarily due to economic circumstances like high-interest rates in the late 1970s and early 1980s, and recessions in the 1990s. However they generally have higher homeownership rates than Millennials.
Many Gen Xers faced significant financial losses during the Great Recession, leading to foreclosures and a loss of wealth. This event affected their ability to buy homes or maintain homeownership compared to Boomers, who may have been more financially established at the time. In fact, research from the Federal Reserve found that Gen X lost nearly half of their wealth in the Great Recession.
Despite these setbacks, Gen X owns more homes than Millennials, who have struggled even more with affordability and higher student loan debt.
Generation X has high car ownership rates though not as high as Baby Boomers. Unlike Millennials, who have shown a preference for public transportation, ride-sharing services, or even delaying car ownership, Gen Xers are more likely to view owning a car as a necessity for daily life.
Research suggests that Gen X takes fewer vacations than Baby Boomers. A 2018 study by Allianz Global Assistance found that Gen X is more likely to prioritize saving for retirement and their children’s education over taking expensive vacations. Although Gen X values work-life balance more than Boomers, their careers and financial pressures may make them less inclined to take extended vacations. This contrasts with Boomers, many of whom are in or near retirement and therefore more likely to take time off for leisure travel.
Boomers are more likely to spend on luxury goods, given that many are in retirement or have fewer financial obligations. Millennials, on the other hand, are more focused on spending on experiences, but they also tend to travel on tighter budgets.