What does Survivor have to do with your credit score? The reality television show is in its 33rd season. The concept, take 20 strangers, place them in a jungle and let them, “Outwit, Outplay and Outlast” one another. This season, the theme is Millennials vs. Gen X. Oddly, the theme and generational game strategies and work ethics triggered a thought process on how the different generations managed their money. I thought, let’s do some searching and throw in the Baby Boomers for good measure.
Only about half of consumers (51%) know when lenders are required to inform borrowers of their use of credit scores – after a mortgage application when a consumer does not receive the best terms on a consumer loan, and whenever a consumer is turned down for a loan.
Which generation is most financially savvy with their saving and credit consciousness? Let’s take a look at Millennials, Gen Exer’s, and Baby Boomers. What influences and obstacles has each generation faced that has affected their finances.
Baby Boomers (ages 50+) is the generation that has fueled the growth of the credit card industry. This generation is faced with insufficient retirement savings. The best advice is to analyze their investments and adjust their living standards to meet their resources.
Gen-Exer’s (ages 35-49) – the “Can’t Keep Up” generation. Unlike Survivor’s portrayal of Gen-Exer’s strong work ethic and do-it-yourself attitude, Gen-Exers are struggling to manage their money.
With so much going on, managing their own finances, supporting children and caring for aging parents taking up a lot of time and resources, they can barely keep themselves above water. Gen-Exer’s have hit just about every bump in the road, most were children of divorce, they have families they have to take care of, a weak job market, and parents who have never really supported them much financially. Not to mention the fact that many bought homes only to lose value during the recession.
In fact, one in five people in this group believes that going into credit card debt to handle day-to-day purchases is “just a fact of life,” a reality that they are faced with and accept as their own truths.
Unfortunately, for Millennials (ages 19-34) who watched their parent’s struggle through the recession, they too now are starting their lives with large student loan debt.
*Average credit scores per group:
Baby Boomers – 709
Gen X – 650
Millennials – 625
A recent survey showed that Millennials know less than Gen-Exer’s about credit scores. Good or bad, Millennials are aware of their lack of knowledge on the matter.
The take away is both positive and negative. No matter the generation or age, we are generally terrible at managing our money. In short, we all need to save more, but it’s never too late to develop smart credit habits.
*Experian, representative sample of its database of credit reports. A credit score is VantageScore.
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