This post is sponsored by Lexington Law.
Baby Boomers (born between 1947 and 1964) are one of the oldest generations in the workforce. The generation that precedes them, Traditionalists, are few and far between but about 250,000 are still working to some capacity. While about 10,000 Boomers are retiring everyday many are still holding steady in their careers. This is due to the Recession and accessibility to better healthcare.
There are about 73.4 million Boomers in the US with a total buying power of $2.6 trillion. Much like millennials, this generation is still one to focus on. They are spending money on anything from vacations, pets, to everyday items for their household. One thing that might vary from other generations is their healthcare costs and retirement funds.
In this post, we are going to tackle the spending habits of Baby Boomers and share strategies for Baby Boomers to share what they’ve learned to the younger generations. Helping other generations to better understand how to get ready for the next stages in their life.
Baby Boomer Spending Habits
How Do Baby Boomers Shop and What Are They Buying?
According to a post of Lexington Law’s blog, more than half of Boomers prefer to shop online than in the store. They are savvy shoppers who use digital coupons, score deals on Cyber Monday and about 25% even have groceries delivered.
Since they are in a different stage in their life, their spending habits differ from the younger generations. They are most likely empty nesters (unless their millennial children moved back home). According to the same post Boomers spending priorities are:
- Healthy food
What Does “Retirement” Look Like for Baby Boomers?
According to an article on Lexington Law’s blog, “mid-Boomers (those born in the middle of the generation, roughly between 1952 and 1958) realize that they’re not financially prepared for retirement and scramble to see how they can fund it.” They were putting about 9-10% of their pay checks away which sadly might not have been enough and then with the housing bubble lost more money.
That same post mentions that only about 26% of Boomers have a back up plan for retirement. So, what does this mean? Many Boomers plan to continue to work for some time. This may either be in a 9-5 role, or something more flexible. While this might not have been their vision, the rising costs has made it a reality to work past what we previously thought was retirement age.
Baby Boomers: Here’s How to Help Your Grandchildren Be More Fiscally Responsible
As a millennial mom of two brought up by Boomer parents; I have been fortunate to be able to pass down financial knowledge to my children. Growing up my parents, spent time teaching me the value of money, how to save, and the importance of paying off my credit cards.
As grandparents, they continue to share this knowledge with my children. I realize that many people are not as fortunate, and wanted to share a few ways to help the younger generation to be more financially responsible in hopes of making an earlier retirement a realistic option.
Talk in Terms They Understand
While the concept of budgeting and credit scores is something that’s even difficult for adults to grasp, it can be like speaking another language to a child. When we talk above their ability to understand, it’s hard to make progress (or for them even to listen).
For example, when you’re trying to explain credit cards (what my daughter used to think was a magical card), you can use a report card analogy. By using this analogy you’re providing something that they can relate to and makes it easier to understand.
To do this, you have to make a connection between grades (report card/tests) and the “grades” (credit score) that we’re given by credit bureaus. You can explain how having poor grades can limit your options and how having a poor credit score can do the same. They might not be able to live where they want, buy a car, or do something else they might be excited about. This example can change based on the age of your child. For my kids, a poor grade or not doing their best may lead us to not get a celebratory ice cream cone.
Set Up a Reward System
Growing up my husband’s parents would match the amount he chose to donate or put in his bank account to save. If he donated $10 to the SPCA, they would also donate $10. If he put half of his birthday money in the bank, they matched that amount. This was a great incentive for him to save and to give back to the community. We started doing the same thing with our kids and they’re able to see how their money is making an impact.
Show Them What Happens
My daughter lost most of her teeth in a relatively short period of time and combining that with some birthday money; she had a small bit of cash. We talked to her about opening up a back account, what that meant, and how this can incrementally help her money grow. Since she mainly went with us through the drive through, we made it a point to take her inside the bank and learn how to fill out deposit forms. She took her money, helped with the form, and then handed it to the bank teller. She was part of the process from start to finish. In school, she also recently learned how to write a check and that’s something I didn’t learn until I was on my own and too embarrassed to ask about.
We also help her keep track of her account through our bank’s app. She can see her money grow (even if it’s at a slow pace). It took a little while for her to understand that we can’t go to the bank and visit her actual money but showing and using the app has made it more practical. She now knows the process for putting money in the bank and taking it out if she needs to.
Have Fun with It
I’ll admit, budgeting and talks about money are not my favorite past times but being fiscally responsible is something I really want to instill with our kids. We don’t want to make talking about money a bad thing and only bring it up when they do something wrong. It’s something we reward and have real conversations about early on. The more educated they are now, the more likely they are to live more financially responsible futures.
While talking to our kids/grandkids about money is important, we also need to understand where we stand as adults. One of the first (and most often overlooked) steps, is to get a better grasp on our finances. Pulling your credit report, understanding your score, and fixing any inaccuracies is essential. When we have a better grasp on where we stand and make an active effort to increase our scores; we’re setting an even better example for our kids/grandkids.
We’re also able to learn from our mistakes and provide them with a real financial education. The professionals at Lexington Law can provide you with personalized assistance to help you understand your credit score and repair your credit.