RadioBDC Logo
| Listen Live
< Back to front page Text size +

Which generation is the best at managing and saving money?

Posted by Daniel Kline May 21, 2013 10:38 AM


Whether you’re in the Baby Boomers generation or one of their children or grandchildren – Gen X, Gen Y or Gen Z – money matters weigh heavily on our lifestyles and decisions. According to the 2012 Scottrade American Retirement Survey, concerns about financial futures has made most Americans change their spending and saving habits. The survey found that to reduce their financial concerns:

• 69 percent are spending less, compared to 63 percent in 2011;
• 67 percent are using coupons, compared to 59 percent in 2011; and
• 65 percent compare prices to find the best deal, compared to 58 percent in 2011.

Which generation is better at saving money? It’s hard to say, as each has such a range of different situations and needs.

As a Financial Education Advocate with Generations Federal Credit Union, however, David Rodriguez has worked with members of each generation and has gotten know the different financial challenges each may face. We spoke with him to get his expert take on the topic. The following are some of the concerns and saving strategies each generational category faces in managing money.

Baby Boomers (Born 1945–1966)

Financial experts recommend having 70% to 80% of current income available to use annually in your retirement years. However, over the last few years, Baby Boomers have experienced a significant financial hit in their retirement savings. Job losses, caring for both elderly parents as well as children, college costs and home values have decreased this generation’s savings.

“The difference with [Baby Boomers] is they knew better,” Rodriguez says. “They spent their money and didn’t save, but they knew the concept of saving based on their parents and elders who lived through the Great Depression.”
The Scottrade American Investor Survey notes that:

• 11 percent of Baby Boomers are saving for their own or a family member’s education;
• 72 percent continue to name retirement as their primary reason for investing
• 36 percent are saving to build an emergency fund; and
• 21 percent are working to reduce their debt.

For those who wish to delay retirement and continue to working through retirement, there is still opportunity to replenish their retirement savings account.

Generation X (Born 1967–1982)

While the Baby Boomers may have had pensions and generous company retirement fund matching benefits to rely upon, Generation X is skeptical that they will receive projected Social Security and increased retirement plan benefits. The burdens of school debt, lack of adequate workplace benefits, high housing costs, and the potential for periods of unemployment have taken a bite out of the Gen X savings accounts.

However, the good news is the January 2012 Insured Retirement Institute Report indicated that one-third of Gen Xers are confident of having enough money to live comfortably during retirement, cover their medical expenses and pay for their children’s college educations.

On the other hand, the other two-thirds of respondents state that:

• 41% of GenXers have saved less than $100,000 for retirement;
• 15% made early withdrawals from their 401(k) plans;
• 23% stopped contributing to their retirement accounts, and
• 22% stopped contributing to college savings plans.

Generation Y (Born 1983–1994)

Generation Y has parents who are most likely Baby Boomers, but that doesn’t seem to be a help to them. The average university student graduates with an estimated $28,000 in debt. The country’s unemployment rate is still high, and workers in their 20’s and 30’s are generally the first to receive the pink slip at work. Additionally, a lot of people in this generation have had to find work as contractors – which means no benefits and paying more in self-employment taxes.

As a result, many Gen Yers have had to resort to living on credit cards and cashing out any of their savings. “Late X’ers and Y’ers are the worst of the four generations at saving, because of the easy access that both of those generations had to credit. ’Why save if you can get it now and make easy payments?’ is the attitude I see regularly with these two groups,” says Rodriguez.

Generation Z, a.k.a Millenials (Born 1995-2012)

Generation Z – those who are 18 into their early 20’s, also called Millenials – have seen their parents and grandparents move through the up’s and down’s of several recessions. As a result, a survey conducted by TD Ameritrade notes that Gen Z has a high understanding of today’s financial and economical realities.

This awareness of financial matters and the importance of saving money definitely works in Generation Z‘s favor, points out Rodriguez. “I think that the Millenials will be the best savers, because they have witnessed firsthand not only the recession, but also their own parents struggling to save for and pay for retirement.”

As the older range of Gen Z have probably only been working a few years at mostly minimum wage jobs, paying for transportation and cell phone expenses – and perhaps contributing to school costs or rent — it’s difficult to compare their savings strategies to the older generations’ financial strategies.

Whatever generation you fall into, financial experts agree that education is key. Whether you consult with a financial advisor or look for information online, learning the basics of budgeting, managing debt, how to invest and save for retirement is invaluable.

Article originally published here:

Local finance professionals share insights and advice on issues such as budgeting, managing debt, and retirement planning.

About the contributors

D. Abraham Ringer is a CERTIFIED FINANCIAL PLANNER practitioner and a Financial Adviser with Morgan Stanley Global Wealth Management in Boston. He is registered in MA, NH, NY and several other states to which his articles are directed. For more information please visit
Financial Planning Association™ of Massachusetts has 900 members who specialize in the financial planning process. Many of its members engage in philanthropic pro bono work in their communities, recommend legislation, elevate public awareness, promote financial literacy, and advocate for sound economic and tax policies.
Odysseas Papadimitriou is the founder of, a credit card and gift card marketplace, and, a personal finance site. He has more than 13 years of experience in the personal finance industry, and previously served as senior director at Capital One.

E-mail your question

Your question/comment: