Financial Checklist For Generation X

Financial Checklist For Generation XHaving a financial checklist helps you keep track of your current finances as well as your long term goals. What makes this challenging is that your checklist could be ever changing. There are a lot of factors that come into play. One is your lifestyle which directly affects how you spend your money and manage your budget.

It can be your age because your needs vary at different points in your life. As such, your checklist would have to adjust as well. At this point, Generation Xers or those born prior to 1980s would be reaching 40 years old in a few years. This is a crucial point in anyone’s life as this is just a few years away from retirement and they could be at their prime earning capability.

This means that decisions made today would have a big impact on how their retirement will be. As such, it is important to have a financial checklist that reflects that urgency. The combination of pre-retirement years and peak in earning ability will both play a big role and dictate how the Generation X would be heading into their retirement years.

The millennials managing their finances may have a lot more time than the generation before them simply because they are a lot younger. The time factor alone should compel the Generation X to start putting in some serious thoughts in their checklist. Here are a few things to include in that to help them transition better financial standing.

Stay away from keeping up with the Joneses

This could have started in your younger years when you were trying to do better than that kid in school. It then became about competing with a colleague and even with some family members and people in your community. Your compulsion to outdo people to the point of keeping up with their lifestyle no matter how expensive it is for you will only hurt your finances.

This is one of the most common mistakes people make which puts their finances in peril. You need to stop trying to keep up with Joneses and live within your own parameters. One of the reasons why this needs to be on your financial checklist is to enable you to have an identity of your own. At your age, you need that to clearly lay out the path for your retirement.

Another reason is that the person you are trying to keep up with financially might only be doing the same with another person. In essence, you are trying to copy a lifestyle of a person that is not even their own. Look for and establish your own financial and social identity based on your own set of life lessons and goals. This will make it more manageable in the long run.

Start looking into stock investments

If you haven’t invested in stocks yet, this is a good time to get started on it and include it in your financial checklist. One reason is that you still have a few good earning years in you to come out on top. You might be hesitant at the moment as Gallup shares how stock ownership went down by as much as 8% since the financial crisis.

This is understandable as people still remember all the things that happened when the housing bubble collapsed and people started to lose jobs and even their homes. As such, it is better to hold on to cash on hand and be ready for anything. However, that is what your reserve funds are for. There is no need to tie everything up to cash so you can invest some of your funds and make it earn interest over time.

Be aggressive with your retirement savings

Investing in stocks is just a part of your retirement planning. In your financial checklist, it is ideal to pattern the list in a way that it becomes more aggressive in planning for the future. You need to start directing your attention to that part of your life. More than the fact that it is just around the corner, retirement planning needs a lot of preparation.

The most obvious course of action is to step up the amount you are saving for your golden years. As Generation X is at the prime of their earning ability at this time, it would help to allocate extra money over to retirement. If you get any windfall money, put a big part of that into strengthening your retirement accounts.

One item that is often overlooked by the Generation X who is nearing retirement is lifestyle planning. It is a good idea to include this in the financial checklist as part of their retirement plans. This is because it is not always about money. You need to consider some lifestyle transition as well such as cultivating an old or new hobby for retirement. Looking at your existing community on how retirees are or checking out other areas at. You can even start the process of downsizing your home so you can use whatever profit to increase your nest egg.

Rein in your expenses

At this time, it is a good idea to start lowering your expenses. You can start channeling funds over to other more important areas of your finances. It can be your retirement fund or even your emergency money. There are a lot of people who are able to start saving from scratch so saving at your prime earning years should be a little easier.

It is just important to take note of your expenses and eliminate unnecessary ones to free up funds in your budget. You can start looking at subscriptions and even memberships that you may not be maximizing at the moment. You might only be going to the gym once a month but paying for the full price every month. WHy not jog every day and get to breathe in fresh air? It is also possible that you have a cable subscription but you really do not get to watch tv everyday. It might be better to just opt for online streaming alternatives.

Get rid of debt

As you near retirement, you need to include in your financial checklist how you can pay off your debts. It is not easy to have multiple payments taking a big chunk of your fund in retirement. Nasdaq even shared that total consumer debt has already reached about $1.3 trillion. As you take on your debt, you can choose to prioritize the ones with the highest interest rates first or those with the smallest amount first.

Here is a short video on household debt:

If you are looking at multiple payments and want to have an easier time managing all of them, you can explore debt consolidation. As the name suggests, the program will combine most, if not all your debt obligations under one account. This will make it a lot easier to send out the monthly payment as you deal with fewer details. Rather than trying to remember multiple due dates and varying amounts, you now only send out one amount every month.

Lock in your long term goals

As you slowly prepare for retirement, one thing you need to have on your checklist is a concrete set of long term goals. At this point, you should already have an idea what these are. It is just a matter of committing yourself to those targets.

It is important to have a financial checklist especially when you belong to the Gen X simply because you are transitioning into retirement. This underscores the importance of having the checklist to help guide you and put you on the right financial path.