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The working class can be divided into four generations, each with its own financial challenges and way of thinking. In fact, generational financial planning can become complicated, as each generation has been raised with different values, perceptions of the world, and socio-economic challenges, directly affecting how each generation approaches financial planning.
We look at the four different generations, how they perceive the world and their circumstances, and the financial challenges they face.
Who are Baby Boomers?
Baby Boomers are people born between 1946 and 1964 (61-79 year olds). This generation got its name from the post-World War II baby boom, a period of significantly increased birth rates.
Today, Baby Boomers are primarily retirees or nearing retirement, influencing politics, healthcare, and the economy in significant ways.
Boomers are the wealthiest generation (historically): Boomers benefitted from economic growth, home ownership, and strong pension plans.
- Hardworking & Career-Oriented: Many Boomers value job stability and have a strong work ethic.
- Traditional Values: They grew up in a time of economic prosperity and often uphold conventional social norms.
- Technologically Adaptive (But Not Digital Natives): While they didn’t grow up with technology, many have adapted to it over time.
What financial challenges do Baby Boomers face?
Even though Baby Boomers are often considered the wealthiest generation, many still face significant financial challenges, especially as they enter or navigate retirement.
While many Boomers are financially comfortable, many face serious financial struggles, especially those without pensions or substantial investments. Planning, budgeting, and adjusting lifestyle expectations are crucial for financial security in retirement.
Outliving their savings (longevity risk)
Many Boomers are living longer than expected, increasing the risk of outliving their retirement funds. With rising healthcare costs, longer life expectancy means more years of spending without steady income. Medical expenses, prescription drugs, and long-term care (assisted living or nursing homes) can drain savings quickly.
Insufficient retirement savings
Some Boomers did not save enough for retirement due to late planning, market crashes (like 2008) reducing investment value, thus relying on pensions that no longer exist. Many still work past retirement age to cover expenses.
Inflation & cost of living increases
Rising costs of housing, food, and utilities impact retirees on fixed incomes. Social Security benefits may not keep up with inflation.
Dependence on social security
Many Boomers rely heavily on Social Security, but it was never meant to be a primary income source. There are concerns about the future of Social Security funding, which could impact younger Boomers.
Debt in retirement
Unlike previous generations, many Boomers carry debt into retirement, including: Mortgage payments, credit card debt, medical bills and student loans (either their own or co-signed for children)
Financial support for adult children & grandkids
This is a massive problem for Boomers as many financially support Millennials and Gen Z children due to high housing costs, rising cost of living and inflation, student debt, or job struggles. This can put extra strain on their retirement savings.
Limited job opportunities for older workers
Some Boomers want or need to work, but face age discrimination in hiring. Finding flexible, well-paying jobs later in life can be difficult.
Who are Gen X?
Gen X (short for Generation X) refers to people born between 1965 and 1980 (45-60 year olds). They fall between the Baby Boomers and Millennials and are sometimes called the "forgotten generation" because they are often overshadowed by the two larger generations on either side.
Today, Gen Xers are mid-career professionals, business leaders, and parents of Gen Z. They hold significant influence in the workforce but often feel overlooked in media and politics.
Skeptical & Pragmatic: They grew up during economic downturns, corporate layoffs, and political scandals, leading to a more skeptical view of institutions.
- Independent & Self-Reliant: Many were "latchkey kids" (home alone after school) due to working parents, making them self-sufficient.
- Tech-Savvy (But Not Digital Natives): They witnessed the rise of personal computers, the internet, and mobile phones, making them adaptable to technology.
- Work-Life Balance Seekers: Unlike Boomers, who prioritise careers, Gen Xers value a work-life balance.
What financial challenges does Gen X face?
Gen X is often called the "sandwich generation" because they’re financially supporting both aging parents and their own children while also trying to save for retirement. They face unique financial challenges that make them one of the most financially stressed generations.
Retirement savings shortfall
Many Gen Xers haven’t saved enough for retirement due to economic downturns, debt, and family financial responsibilities. Unlike Baby Boomers, they don’t have pensions and must rely on IRAs, and personal savings, which some started contributing too late. Many worry they’ll have to work past retirement age.
High levels of debt
Gen X carries more debt than any other generation, including:
- Mortgage debt – Many still have large home loans or are struggling with rising interest rates.
- Credit card debt – High interest rates make it hard to pay off balances.
- Student loan debt – Some still owe for their own education or took loans to help their kids.
- Auto loans – Many need cars for work, adding to their monthly expenses.
The "Sandwich Generation" financial burden
Many Gen Xers are helping aging parents financially with healthcare, housing, and daily expenses. At the same time, they are still supporting adult children who struggle with high rent, student debt, or underemployment. Balancing these responsibilities drains their income and savings.
Rising cost of living & inflation
Housing, food, healthcare, and energy costs have risen, making it harder to save. Many haven't received pay raises that keep up with inflation. It adds even more strain if they’re still paying for college tuition for their kids.
Job insecurity & career pressures
Gen Xers are in their 40s and 50s, a career stage where layoffs, downsizing, and age discrimination can make job hunting harder. Some feel stuck between Boomers (who hold leadership positions) and Millennials (who bring fresh skills), creating career stagnation. Many lack up-to-date digital skills, making it harder to compete in specific industries.
Uncertain social security & retirement safety nets
Social Security may be reduced or depleted by the time Gen X reaches retirement. Healthcare costs and long-term care expenses could wipe out their savings. Many worry they won’t have enough to retire comfortably and might have to delay retirement.
Lack of emergency savings
Many Gen Xers live paycheck to paycheck, with little emergency savings. Unexpected expenses (medical bills, home repairs, job loss) can throw them into financial crisis.
“With the cost of living on the rise, now is the time to safeguard your finances. It is also crucial to boost your emergency fund to cover at least six months of living expenses.” -deVere CEO, Nigel Green.
Who are Millennials?
Millennials (also known as Generation Y) are people born between 1981 and 1996 (29-44 year olds). They are the first generation to grow up in the digital age and have been heavily shaped by the rise of the internet, social media, and economic shifts.
Today, Millennials are in their late 20s to early 40s, navigating careers, homeownership (or lack thereof), and starting families while shaping modern culture, workplaces, and politics.
They feel like they’ve done everything right (college, hard work) yet still struggle financially due to systemic challenges.
Financially Struggling but Entrepreneurial: They faced the 2008 financial crisis and rising living costs but are also known for starting businesses and embracing the gig economy.
- Tech-Savvy & Digital Natives: They grew up with the internet, social media, and smartphones, making them highly connected.
- Highly Educated (But Often in Debt): Many pursued higher education but faced rising student loan debt and economic challenges.
- Experience-Focused: They prioritise experiences (travel, concerts, dining) over material possessions.
- Socially Conscious & Open-Minded: Millennials value diversity, sustainability, and social justice.
- Job-Hoppers & Work-Life Balance Seekers: Unlike Boomers, they seek purpose in their work and prioritise flexibility, often changing jobs more frequently.
What financial challenges do Millennials face?
Millennials face some of the biggest financial challenges of any generation, mainly due to economic crises, rising costs, and stagnant wages. Many feel financially behind previous generations, struggling to afford housing, pay off debt, and save for retirement.
Student loan debt
Many Millennials took on substantial student loans due to the rising cost of college. High debt makes it harder to save, invest, or buy a home. Some Millennials are still paying off loans well into their 30s and 40s.
Housing affordability crisis
Home prices have skyrocketed, making it difficult for Millennials to buy a home. Many are stuck renting or living with parents longer than previous generations. High mortgage rates and rising down payment requirements create additional barriers.
Stagnant wages & job instability
Millennials entered the workforce during or after the 2008 financial crisis, leading to low wages and job instability early in their careers.
Even now, many haven’t caught up financially compared to Boomers or Gen X at the same age.
Gig economy jobs and contract work provide flexibility but often lack benefits like healthcare or retirement plans.
High cost of living & inflation
Rent, healthcare, childcare, and groceries are significantly more expensive than in previous decades. Many Millennials feel like they work hard but can’t get ahead due to the rising cost of everything.
Retirement savings struggles
Many Millennials didn’t start saving early due to student debt and low wages. Lack of pensions means they must rely on workplace pensions or IRAs, but not all jobs offer these. Some can’t afford to contribute much to retirement savings while covering basic expenses.
Credit card & personal debt
Many Millennials rely on credit cards to cover basic expenses, leading to high-interest debt.
Medical debt is also a major issue, especially in countries without universal healthcare.
Some Millennials support aging parents financially, adding to their financial strain.
Economic uncertainty & recession fears
Millennials have lived through multiple financial crises (2008 crash, COVID-19 recession, inflation spikes). This has made them financially cautious, but many still feel like they’re one emergency away from disaster.
Work-life balance vs. financial stability
Many Millennials prioritise mental health and work-life balance, but this sometimes means lower-paying jobs or quitting toxic workplaces. The traditional “work until retirement” model doesn’t appeal to many Millennials, leading to interest in side hustles, freelancing, and passive income.
Who are Gen Z?
Gen Z (short for Generation Z) includes people born between 1997 and 2012 (13-28 year olds). They are the first generation to grow up entirely in the internet and social media era, making them the most digitally native generation.
Currently, Gen Z is in their teens and early-to-mid 20s, with some entering the workforce, college, or starting businesses. Their influence on culture, marketing, politics, and technology is massive, reshaping everything from entertainment to workplace expectations.
Financially Cautious & Entrepreneurial: Growing up during economic instability, they prioritise financial security and often explore side hustles, investing, and freelance work.
- True Digital Natives: Unlike Millennials, who saw technology evolve, Gen Z has never known a world without smartphones, social media, and instant access to information.
- Socially Conscious & Activist-Minded: They care deeply about issues like climate change, mental health, racial justice, and LGBTQ+ rights.
- Short Attention Spans, But Highly Adaptive: Used to quick content (TikTok, Instagram Reels), they process information fast but have little patience for outdated systems.
- Mental Health Awareness: They openly discuss anxiety, depression, and stress, making mental health a priority in workplaces and schools.
- Diverse & Inclusive: They embrace diversity in race, gender, and identity more than any previous generation.
What financial challenges does Gen Z face?
Gen Z is just beginning to enter adulthood, college, and the workforce, but they’re already facing significant financial challenges. Many are dealing with rising costs, low wages, and economic uncertainty, making it hard to build wealth early in life.
Rising university costs & student loan debt
College tuition is more expensive than ever, leading many Gen Zers to take on massive student loan debt. Some are choosing alternative paths (trade schools, online courses, entrepreneurship) to avoid debt. Those already in debt struggle with high interest rates and long repayment periods.
High cost of living & inflation
Rent, groceries, transportation, and healthcare costs are all significantly higher than when previous generations were their age. Many can’t afford to move out and live with parents longer.
Even entry-level salaries often don’t keep up with inflation, making it hard to cover basic expenses.
Housing affordability crisis
Homeownership feels out of reach for many Gen Zers due to high home prices and mortgage rates. Even rent is expensive, forcing many to live with roommates or stay at home longer.
Many are considering alternative housing options, like co-living spaces or remote work in lower-cost areas.
Job market challenges & low starting wages
Many Gen Zers are struggling to find well-paying jobs, especially in competitive fields. Gig work and contract jobs (Uber, freelance, retail, etc.) are common but often lack stability, benefits, or retirement plans. Companies expect experience for entry-level jobs, making it difficult for new grads to break into industries.
Lack of job security & automation risks
Many fear layoffs, job instability, and AI replacing jobs in specific fields. More Gen Zers are looking into side hustles, investing, and freelancing to create multiple income streams.
Delayed wealth building & retirement savings
Many aren’t saving for retirement yet due to high expenses and low income. Unlike Boomers and Gen X, they don’t have pensions, meaning they must rely on private pensions and investments—but many jobs don’t offer these benefits. Some Gen Zers are more financially cautious due to witnessing Millennials’ financial struggles.
Strategies to Overcome Financial Challenges
Each generation has its own unique financial challenges to deal with, but many overlap and are common to most professionals. In order to break the cycle, new habits need to be fostered to build generational wealth. These include:
Increase Savings and Retirement Contributions and start early: Max out the maximum workplace pension contributions whenever possible. Even small contributions to pensions, investments or funds will grow over time.
Pay Down Debt: Prioritise high-interest debt (credit cards, loans) and refinance if needed.
Avoid High Student Loan Debt – Consider trade schools, scholarships, community college, or in-state tuition to reduce costs.
Build Emergency Savings: Aim for 3–6 months of expenses in a savings account.
Invest Wisely: Diversify investments to ensure long-term financial security.
Plan for Aging Parents & Children: Have open financial discussions and set boundaries on support.
Look for Higher-Paying Opportunities – Negotiate salaries, switch jobs strategically, and develop in-demand skills.
Build Multiple Income Streams – Side hustles, investing, and freelancing can provide financial security.
Prioritise Budgeting & Smart Spending – Use budgeting apps, cut unnecessary expenses, and track spending.
Build Multiple Income Streams – Side hustles, freelancing, and investing can help provide financial security.
Upskilling – Learning in-demand skills (e.g. coding, digital marketing, etc.) can lead to better-paying jobs.
While various generations have experienced life through different lenses, they share many similar financial challenges like not saving enough for retirement, rising cost of living and market instability.
Regardless of your generation, it is advisable to chat with a financial adviser, to break the mould, and ensure your financial planning goals are on track to give you financial security.
Please note, the above is for educational purposes only and does not constitute advice. You should always contact your financial adviser for a personal consultation.
* No liability can be accepted for any actions taken or refrained from being taken, as a result of reading the above.