I was born in 1968, back when a lot of Baby Boomers were still hippies and free love was in the air. That makes me a member of America's Generation X, a tiny demographic cohort of just 46 million. My fellow Gen-Xers and I (born between 1961 and 1981) are stuck smack between two of the largest generations ever: the Baby Boomers and the Millennials, with 76 million and 75 million, respectively. So, essentially, we're the middle children, and as such, we're frequently overlooked and underappreciated. There are fewer pictures of us in the generational family album. And now we're all eyeing 40, 50, or even 60. Yay, us.
How a Gen-Xer budgets
Anytime I hear the term Gen-X, I think of the late 1980s and early 1990s; the rise of grunge music, the fall of the Berlin Wall, the movie Reality Bites, and the mostly carefree days of college. Back then, my "budget" consisted of several envelopes labeled with words like Rent, Utilities, Car -- plus a giant glass jar filled with change.
I was waiting tables and tending bar to make ends meet while I was in school, and, while I had a bank account where my paltry paychecks went ($2.01 per hour for waiting on tables and $7.25 per hour for bartending), the majority of my monthly cash flow was made up of exactly that -- a flow of cash from tips.
Obviously, my financial reality changed after I graduated and got a real job, and I needed something more robust (and secure) than a bunch of envelopes. I knew I was never going to be the kind of person who would write out all of my expenses and income each month the way my mother had when I was growing up. I've just never been that exact. Instead, my envelopes became bank accounts.
I segment my monthly income
I opened a joint account with my spouse, where we both put a percentage of our income to cover our mortgage, utilities, and home maintenance costs. Another portion of my paycheck went into my personal checking account, from which I'd make payments toward my credit cards, car, student loans, and other personal expenses. Still another portion went into a savings account so I'd always have an emergency fund (it's come in handy over the years, believe me). And, eventually, a portion of my paycheck went into my 401(k), IRA, and other investments.
I embrace technology ...
Over the years, this simple sorting process has helped ensure I don't go on a spending spree (most of the time), but I've mixed it up a bit as technology has evolved. Today, I have autopay on everything except my credit cards (I prefer to pay those in full each month, sometimes making two or even three payments throughout the month), and I pay my yard guy using Venmo (but I don't make my payments public). My retirement savings also are automatically invested, which is even more important now that I'm self-employed.
... but I hate budgeting apps
I've tried a few different products, but they all feel invasive to me. I just don't like all my financial information sitting in one spot where it can be viewed. Not on a piece of paper, not in a spreadsheet, and definitely not in an app, no matter how super-encrypted it might be.
I just can't pinch pennies
I'm not a spendthrift, but I just have no interest in spending hours or even minutes comparison shopping, clipping coupons, or bargain hunting. If I need a big-ticket item -- say, a new television -- I'll look at prices online to get a feel for the best deals, but I don't compare the cost at one store with another's. Life is too short to get caught up in saving 5¢ here and there. At least it is to me.
I'm worried about retirement
Gen-X is the first generation since Social Security was created in the 1940s to face the possibility of having no government-managed retirement benefits at retirement. That worries me because I've been paying into Social Security since I was 15, and saving for retirement for more than 25 years. But I still don't think I'll have enough money to fully retire until I'm at least 70. That's why I'll begin investing more after I turn 50, taking advantage of the catch-up contribution limits available then.
I'm happy to spend money and time on buying insurance
My father died when I was 8, and he didn't have life insurance. His hefty medical bills, in the hundreds of thousands of dollars, sent my mother into bankruptcy. That's why I've always had life insurance, as well as health, dental, auto, and homeowner's coverage. And I definitely take my time to shop around for the best coverage to ensure I'm getting my money's worth. Maybe this offsets the money I spend not comparison shopping for broccoli.
If you're shopping for life insurance, here are some policy features you should be looking for.
If I could do things a little differently ...
If I could change some of my financial decisions over the years, I'd definitely max out my 401(k) contributions sooner. And I wouldn't have worried so much about having nice cars. I guess that's just the middle child in most of us Gen-Xers, looking to steal a little attention from our Baby Boomer and Millennial siblings.
Do you agree with this Gen-Xer and avoid budgeting apps? This sheet is all you need to easily draft a budget.