Moral Low Ground

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Gen X & Their Personal Finance Woes: Help Is on the Way

March 27, 2014 by Moral Low Ground in Rich & Poor with 4 Comments

save money on your piggy bankGen X is in a bit of a financial bind. When the economy tanked in 2008, most millennials were too young to lose much, and boomers already had decades’ worth of equity in their homes and growth on their investments. Gen Xers, though, had young kids to feed and mortgage payments to make. Median household net worth dropped 59 percent for people ages 35-44 between 2005 and 2010, the largest decline of all age groups, according to the U.S. Census Bureau. Today, a household headed up by those in the 35-44 age group is 44 percent poorer than its 1984 counterpart, the Pew Research Center reports.

The good news? The economy is on the mend, and Generation X still has plenty of time left to improve its financial situation. We’ll get you started:

Review Past Financials

Any type of planning starts with a review of what’s gone before, and financial planning is no different. Set aside some time to review these major finance areas. Document them in an easy-to-reference spreadsheet or chart, or use any of these personal accounting software programs.

  • Income – Look at all sources of income, so you know what you have coming in each year. Last year’s tax filing is a good place to start, but also look at gifts and income from sales of things like automobiles or household items. If you’ve recently sold your structured settlement payments to a company like J.G. Wentworth for a lump sum, count that too, as well as any lottery or gambling winnings and inheritances.
  • Expenses – Pull out your files and tally up 12 months of gas, phone, electric, credit card, cable or satellite TV, Internet and any other monthly expenses.
  • Security – Look at all your insurance policies: automobile, home or renter’s, life and other insurance, such as flood insurance and any riders for jewelry or valuables.

Check These Each Year

Check your financial health on a regular basis—monthly or every six months, ideally. A financial review forces you to examine and understand your spending and saving habits, and you can make any adjustments from there. Besides spending and savings, other important financial areas to review include:

  • 401(k) – Look at your 401(k) balance and contributions at least once a year. Assess if you want to increase or decrease your contributions, and check if your fund still matches your investing goals. Many 401(k) plans have resources for investors to help review and plan.
  • Income Tax Withholding – Look at your income tax withholding to ensure it’s the right amount for income projections for the coming year, and make any necessary adjustments.
  • Budget – Review the year’s budget performance—or, if you don’t use a budget, make one. Use your monthly expenses from the past year to set up budget targets, and add in any expected new expenses for the upcoming year.

Get Help

If you’re in over your head or ready to start investing, consult a financial planner. He or she can help you create a budget, dig out of credit card debtand figure out future investment and retirement strategies.

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4 Comments

  1. wildMarch 27, 2014 at 2:41 pmReply

    I would pay attention to ‘the percentages’, for both your income & expenses. Look at things like your actual Federal Income Tax, as a percentage of your annual gross income, is it 5%, 15%, or 25%? Same for State Income taxes, FISA Social Security, Workman’s Compensation, Health Insurance, wage garnishments, IRAs, and anything else that is incurred upon your paycheck stub…because these things are taking their cut of your paycheck, and sometimes there are things you can do to change those ‘automatic expenses’.

    The main thing about auditing your own expenses is that from year to year or time to time, it is the percentage that will clue you in immediately when something is ‘not quite right’. Post these percentages on a sheet of paper, and revisit it often…I’ll guarantee you this, that the IRS, the State Finance Dept., the FISA, the Workmans Compensation, the Health Insurance, the wage garnishers, the IRA ‘guy’ are all constantly monitoring YOUR payments to them.

    So do your due diligence and monitor your ‘auto deductions’…because any of these entities, including your company book keeper can and do make mistakes, rarely in YOUR favor, especially if undetected by YOU.

    Making a budget as the article suggests is easy, based on your present numbers, list Income on one sheet of paper with the total at the bottom of the page. List Expenses on a different sheet of paper with the total at the bottom of the page. Compare the Expenses page against your Income page, deriving a budget is much easier when you build your budget, based on real numbers from last year. Then creating an future budget for the new year expecting it to be nearly the same as last years, and that is where you gain control of your finances, by knowing what Expenses and Incomes you expect to change in the new year that will affect the new years profit or loss.

    All those people that ‘have their taxes done for them’, these people are quite frequently either not directly interested in their own finances, or are too busy to deal with it. Generally I believe there are millions of good people that don’t do their own due diligence to their own personal & business finances, based in convenience for the tax payer, most tax preparers all too often are doing little more than simply filling out various forms, the taxpayer all too often doesn’t even realize any good direction for their future, because they don’t have a working understanding of their own finances.

    wild;)

    • Brett WilkinsMarch 28, 2014 at 10:26 amReply

      May I ask if you’re a member of our illustrious and financially-challenged “Gen-X”?

  2. wildMarch 28, 2014 at 5:01 pmReply

    I’m 53, I think they classify me a baby boomer.

    I’ll tell you this, I know for a fact that those of the X & Y generations are up a creek, in many ways. Because of the direction this country has chosen to conduct itself, the tax situation for example is overly complicated. The intentional inflation is horrible. The destruction of responsible unionized labor is rampant. We all know about the exorbitant higher education costs. And the X & Y generations haven’t yet learned that your phone is tapped, your being videotaped or tracked in all kinds of subtle ways, including any money accounts. Insurance out the ears, your car, your home (because you have a loan), now your health…which is great if you like your insurance guy and believe in the insurance gamble as a way of life. Oh and those wayyyyyyyyyy overpriced ‘bundled’ cable/telephone/internet…the baby boomerzzzzzz did that to ya on purpose. How about all that imported goods, services, and labor?, well we can’t blame it all on Bill Clinton, but he & his are at the top of the baby boomer list as being culpable, right up there with R. Reagan and his Star Wars race to trash outer space, and all that is below it.

    Oh and one more thing, the baby boomers have no problem skinning the X & Y generation at every turn, how about perpetual wars Vietnam, Iraq, & Afghanistan back in the late 50’s until now, are intentional deprivation of life & liberty, at the behest of the most vile, regardless which generation their age reflects. I could go on all day listing war zones…East Timor, Grenada, Africa…it is worldwide, stirring up more crap as we fly & submarine our perpetual nuclear arms globally, the Cold War isn’t over, some yuppie just changed the name of it.

    For those that don’t keep up, or better yet stay ahead of the tax laws serious financial trouble can be found. I learned ‘the hard way’ about 20 years ago, long story short—my newly retained CPA, positioned me & my business into $60K tax debt + interest @ 26% + penalties…overnight! As I reflect upon it, with the pain of that experience, I learned that it is absolutely better to handle things on your own, and knowing now what I didn’t know then, that bit of trouble was totally avoidable, unrealistic, and absolutely should not have gone that way. So I recommend to X & Y to use your computers, but they won’t think for you, no matter what your buddy tells ya. Use a piece of paper to post your financials in plain sight, post them on the fridge if necessary so the whole family knows what your doing, and when trouble comes, and trouble WILL come, look to your paper reports, figure out where you went wrong and do all you can to promptly fix it.

    Ohhhh well I’ve probably said too much. hahahha

    wild;)

  3. wildApril 13, 2014 at 1:30 pmReply

    I found a recent article http://www.commondreams.org/view/2014/04/11-9 somewhat relevant to this article.

    ~~~from the reference article by Astra Taylor, I picked a couple interesting lines to share:

    paragraph 17, “Lest one imagine otherwise, there’s no way off the student-debt treadmill: thanks to the rewriting of bankruptcy law in 1998 and 2005,…”

    Last paragraph, “Too often conversations about selling out devolve into inquests focused on personal purity when it’s the larger, screwed-up economic system that we should be putting on trial—not individual choices.”

    wild;)

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