Boomers & Gen X Were Taught 7 Rules About Borrowing Money That Younger Generations Just Didn't Learn
PeopleImages | ShutterstockAs the economy changes, so do money habits.
But depending on a person's age, it can dictate how much they really understand about money. While young folks today have pretty low financial literacy, when it comes to borrowing money, older folks like boomers and Gen Xers learned the rules from an early age.
Rules boomers and Gen X were taught about borrowing money that young people never learned
1. Credit cards are tools, not lifelines
Getty Images Signature via Canva
Credit cards give Gen Z the "ick," according to a report from CashApp and AfterPay. In fact, 63% of Gen Z has moved away from using credit cards altogether due to the stress it causes them.
They're instead choosing methods of payments that are flexible and offer transparency. So, boomers and Gen Xers were taught that credit cards are tools to help them, whereas Gen Z believes they're completely corrupt and refuse to use them.
2. Paying off debt requires a plan
Back when older generations were making and spending money, if they had debt, they knew they had to pay it off. Borrowing money was something that had a deadline and it couldn't be missed.
Unfortunately, 51% of Gen Zers report feeling ashamed of their debt, and 37% admitted they didn't make enough money to pay more than the minimum owed. Meanwhile, older folks had a plan all along to pay back what they owed.
Gen Zers are just starting out in their careers and have student loans or other debts to pay off, but they weren't necessarily taught to think of payment plans as mandatory.
3. There's bad debt and good debt
There's a lesson older generations were taught that younger people were not: good vs. bad debt. According to personal finance writer Louis DeNicola, there's a big difference.
"Good debt is debt that you take on to achieve meaningful growth in your personal life or finances, like a mortgage or student loan. Bad debt is relatively expensive debt and debt that someone takes on for unnecessary expenses, like credit card debt," he explained.
The line between good and bad debt has started to blur, and Gen Z only knows one kind of debt now. It's because they were never taught the ins and outs of borrowing money that their older counterparts did.
4. Talking about money is taboo
Boomers and Gen Xers grew up believing that it was wrong to talk about money. Along with religion and politics, money was completely off-limits. But Gen Z didn't get the memo.
Around 60% of Gen Zers say they discuss money with their friends and even post their salaries online. This generation values transparency when it comes to money, though it would make older people cringe to know how they feel.
5. Live below your earnings
Ton Photographer 4289 via Canva
This lesson about borrowing and spending money makes sense, but Gen Z is ignoring it. Older folks were taught to live below their means and earnings, always putting money aside to save. Now, this isn't so much the case.
Gen Zers aren't saving as much as they should. Instead, they're opting for short-term purchases like vacations or expensive lattes. They may use buy now, pay later methods to afford these expenses, but they never learned the basics of borrowing money, and may find themselves in trouble because of it.
6. Build good financial habits as soon as possible
From a young age, boomers and Gen Xers learned to start making good financial decisions. They saved money and didn't spend impulsively. They only bought things they needed and stuck to a budget.
For young folks, however, they don't seem too worried about their financial literacy or being responsible with money. Rather than listening to financial advisors or economic experts, they're following advice from social media influencers.
Unfortunately, it's making them susceptible to scams and could be robbing them of a financially secure future.
7. Your greatest investment is your career
Boomers and Gen Xers were taught that their career was their greatest investment. If they had a stable job, it meant they had a stable income. And many older people took this to heart, often staying at the same company or job for decades.
For Gen Zers and young generations, they don't follow the same path. They're infamous for job-hopping or holding many jobs at once, and even have side gigs. Though they're breaking the notion that a career is tied to your self-worth, not investing in their future can harm them.
Sophie Bagheri is a writer with a bachelor's degree in English and theatre who covers lifestyle topics.
