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10 Money Mistakes Gen X Makes and What to do Instead

Mistakes are great. They’re tools for teaching. Above all, we can learn why we made them in the first place. The media doesn’t tire of telling Gen X that we’re behind on saving for retirement, as if we don’t already know. And we’re worried. Most of our stress centers around debt, kids in college and caregiving. Ah well, the great thing about mistakes is that we’re meant to learn how not to repeat them.

Having said that, below are 10 Gen X money mistakes that keep us from protecting our financial futures. If you’re making these mistakes now, learn how to correct them. If you’re on your way, great! Just like it’s never too late to start saving for retirement, it’s never too late to learn from any mistake.

10 Gen X Money Mistakes

  1. Not getting the employer match in your retirement plan that offers a match. This is leaving free money behind.
    • What to do: First, if you’re not contributing to a plan, talk to HR and get it started. It can be daunting to go from contributing nothing to contributing up to the match. Take it slowly. For example, increase the percentage over the course of a year. Once you’re getting the match, decide if you want to continue up to a higher amount.
  2. Using retirement savings to pay for tuition.
    • What to do: There’s no financial aid for retirement. First, send your kid to a two-year college. Second, transfer to an in-state university. Third, have them live at home. Fourth, apply for financial aid (scholarships and grants) and Work Study. Some of us haven’t finished paying off our own student loans. We’re not starting another debt cycle.
  3. Not paying down debt. Interest rates are extremely high and if you’re making only the minimum payments on your debt, you may find yourself paying off debt in retirement.
    • What to do: Develop a plan to pay your debt off using the snowball method or avalanche method.
  4. Not having multiple sources of income.
    • What to do: Research ways to bring in more money each month or quarter. Start by downsizing around your home and selling on Facebook Marketplace, OfferUp, Poshmark, Mercari and eBay.
  5. Not shopping around for better rates on your internet, mobile phone, health, auto and homeowner’s insurance.
    • What to do: Lower your bills. Call one company a week and request a reduced rate or temporary reduction in your bill.
  6. Believing it’s too late for you to start investing for retirement.
    • What to do:: Do you want $200,000 more for retirement? If the answer is $200k open a Roth IRA and begin investing. Someone who is 53 can max out a Roth annually for the next 15 years. As a result, this can add $200k to a retirement fund. This assumes a 6 percent return. Bonus: you won’t pay pay taxes on the withdrawals because Roth contributions have already been taxed!
  7. Fearing the idea of downsizing.
    • What to do: Begin thinking now if you think you’ll be able to afford living in your current home and city. Will you be able to afford your mortgage after retirement? Property taxes, insurance, utilities, maintenance and repairs? Start thinking now about different housing options. Some of these include renting your basement, buying a smaller home or home-sharing. Develop a plan now.
  8. Not having disability or long-term care insurance.
    • What to do: If you have a job, you may have these two types of insurance. Can you keep this if you leave your job? Find out. Be sure to comparison shop to see if you can get the same coverage elsewhere for a smaller premium.
  9. Kids are grown and you’re paying for life insurance.
    • What to do: Some people like to keep the insurance until kids are in college. If the kids are graduated and working, do you need life insurance? If you’re trying to cut costs, decide if it’s worth keeping it.
  10. Not having an estate plan.
    • What to do: At minimum, you should have an updated will, Power of Attorney for Health Care and Power of Attorney for Finances. Update your beneficiaries, guardians and executors and trustees. Consult with an estate planning lawyer to see how to protect your assets for your heirs.

It’s OK to Make Mistakes

In conclusion, I own my mistakes. I’ve had to because some of them will cost me in the future. Learning from my mistakes has helped me teach my adult children how to be better money managers than I ever was. But I’m using the knowledge I’ve gained to teach my adult children how to be better money managers than I ever was.

This list could be longer. To help Gen X get the most out of our future, we’ll dive into health care, caregiving, debt and other topics. If you have thoughts or questions to add, let me know in the comments!

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