As the cost of living continues to surge, Generation X, those aged 44 to 59, are experiencing significant financial pressures. Unlike millennials who have benefited from real estate and stock market booms, and baby boomers who enjoy pensions, Gen X finds itself in a precarious position.
A recent survey by the Federal Reserve Bank of Philadelphia reveals that many Gen Xers are struggling to manage their household finances, resulting in increased workloads and reduced spending on essentials. Despite having a median income of $136,776 per year, they carry an average debt of $157,556, the highest among generational cohorts.
Wendy Graham, involved in the nonprofit sector in Philadelphia, shared her challenges with maintaining a lifestyle that includes buying new or nice things. She noted that medical expenses are a growing concern, adding to the financial burden. “I rarely go out or buy new things or nice things. I usually shop for clothes secondhand, and the expenses that I’m really worried about — and they’re just increasing — are my medical expenses,” she stated.
Meanwhile, Barbara Lose, a 57-year-old from Florida, disclosed her difficulties in covering rent after losing her job recently. Expressing a desire for financial stability, she said, “I just want to go through life and have a job where I can make enough money to go out to dinner and have a couple glasses of wine once a week.” This sentiment echoes the challenges of maintaining discretionary spending under current circumstances.
The trend of cutting back isn’t solely negative; a note from the Bank of America Institute suggests that Gen X is reallocating funds to retirement savings and investments. However, this adjustment doesn’t fully alleviate the financial pressure, especially as many are in a “sandwich” stage – assisting both adult children and aging parents.
The Philadelphia Fed’s LIFE survey highlights that nearly a third of Gen Xers have reduced essential spending. Wendy Graham illustrated this with her own experience, having accumulated debt from necessary dental care costs. “There just isn’t enough. There’s not enough extra to go around, and healthcare costs are just continuing to increase. I don’t see any relief from that in the future,” she explained.
To cope financially, more Gen Xers are taking on additional work, a trend that has grown notably since early 2023. Despite the added burden, Barbara Lose remains optimistic, confident in her ability to adapt: “We’re still a very adaptable generation,” she remarked.
As Generation X navigates this challenging financial landscape, they face unique pressures between supporting family and planning for retirement. While their adaptability is evident, the future remains uncertain as they hope for economic relief.
Source: Businessinsider
