11 Financial lessons millennials could learn from the boomer generation

Boomers make up 20.58% of America’s population and own 52% of the country’s wealth, amounting to $80 trillion in assets, which they will pass down to millennials in what is being known as the “Great Wealth Transfer.” Boomers were born into a post-war America and into a country that gave them everything from college loans to cheaper mortgages to unemployment insurance to minimum wage. They had all the resources and saved money using hard-learned financial lessons.

There are many financial lessons millennials could learn from the boomer generation; here is a list of eleven such lessons.

Retirement savings

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Boomers are the richest generation to have ever lived, but spending like the rich, they saved hard. They believed in the American dream of working hard, providing for their families, enjoying a good retirement, and saving as much as possible.

Boomers saved for retirement in the form of money and assets. According to Redfin, Boomers own $18 trillion of home equity. Their median retirement savings amount to $202000.

This could teach millennials to start saving and investing as early as possible for retirement.

Invest in fixed assets

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Boomers always believed in owning a house and that home ownership is an important factor in wealth-building.

They prioritized investments in fixed assets that would gain value over time rather than depreciable assets. Some common tangible assets most boomers invested in are real estate, gold, and other physical commodities that appreciate in value over time and provide a hedge against inflation. By investing in fixed assets rather than depreciable assets like cars, etc., millennials can not only reduce risk but also create a stable income source for the long term.

Tax saving

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Boomers have long understood the value of minimizing tax liabilities and maximizing tax benefits. They can teach millennials about the benefits of tax-advantaged accounts such as IRA, 401(k), and Roth IRA, which allow for tax-deferred growth and tax-free withdrawals in retirement.

Boomers can also teach millennials about tax-efficient investing strategies, such as tax-loss harvesting and donations, which help reduce tax burdens and increase after-tax returns.

Emergency savings

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68% of boomers have emergency savings as opposed to 46% of millennials; this shows the preparedness of boomers for emergencies.

Boomers understand that emergencies like unexpected expenses can arise anytime, and

having a good amount of savings can provide peace of mind and financial security.

Having emergency savings in place is an essential financial decision millennials can learn from

boomers. This fund can help millennials avoid debt traps and reach their financial goals.

Diversified portfolio

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According to a study by the Financial Planning Research Journal, boomers are more likely to have a diversified portfolio than millennials and other generations.

Boomers realized that each type of investment, short-term and long-term, has its own benefits and can help reduce risk and increase potential returns. They can teach millennials the benefits of diversification, including reducing exposure to market volatility and paving the way for long-term growth.

Avoid excessive debt

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Avoiding excessive debt is very important for boomers; 70% of boomers attribute being debt-free as the key to their financial success. Between 2021 and 2023, boomers were the only generation to reduce non-mortgage debt, with an average decrease of $10,156 (26.4%).

This serves an important financial lesson for millennials: save from every paycheck, avoid taking too many loans, and avoid any form of excessive debt.

Teaching children financial literacy

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Boomers are way ahead of all the other generations when it comes to teaching their children financial literacy; 73% of millennials and 55% of Gen Z hail from households that discuss finance. Teaching children financial literacy is very important; this is an essential lesson millennials can learn from boomers.

Teaching children financial literacy and important concepts like budgeting, saving, and mindful spending can help them make informed decisions about their futures and avoid common mistakes.

Following financial trends

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Following financial news and trends is an important financial lesson millennials could learn from the boomer generation.

Boomers have learned to stay informed about market fluctuations and economic shifts, allowing them to make informed investment decisions and adjust their financial strategies accordingly.

They believe in the power of reading; 37% of boomers reported reading to be their tool to learn about finance. Staying up-to-date on financial trends can help millennials avoid common mistakes, invest better, and make the most of their financial resources.

Track your expenses

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Boomers are firm believers in tracking all their expenses. They tend to track every dollar spent and cut down on overspending areas. Millennials can learn this from boomers and keep track of all their expenses. Tracking your expenses can help avoid and identify areas of overspending.

Avoid lifestyle inflation

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Boomers are not known for overspending or extravagance. They believe in keeping earnings in check and prioritize savings. They also believe in living within one’s means and not spending to conform to social norms or peer pressure. This is one of the most important financial lessons millennials can learn from boomers: living within one’s means and avoiding lifestyle inflation prevents debt traps and helps achieve one’s financial goals.

Start saving early

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According to a survey, the most common advice all boomers gave was to start saving as early as possible. They believe that knowing one’s financial position and saving early can help build a financial safety net and a comfortable retirement. Millennials must learn this important financial lesson from boomers and start saving as early as possible to be financially secure. For example, if a millennial starts saving $100 per month at age 25, they will have saved over $42,000 by age 35; this is without any interest; savings like this can help millennials reach their financial goals and build a safety net.

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