The Gen X Guide to Stretching Your Dollar

While I don’t like to regurgitate articles found on other sites very often I did stumble across one this morning that couldn’t be more appropriate for this site. Yahoo! Finance has a piece titled The Gen X Guide to Stretching Your Dollar which was actually a piece picked up from Reuters. Either way, the article doesn’t bring anything earth-shattering to the table but there are some key points to take away from it.

Today’s 30-somethings are hard workers who have more bills than cash. They also have a healthy distrust of the very financial services industry that wants their cash. Perhaps for good reason.

This probably couldn’t be more true. Most of this generation (27-42 age group) has more in the way of bills and debt than their parents and according to recent census numbers we are earning less at the same age than the previous generation. That is a bad combination.

According to U.S. Census estimates, the median income for men between 25 and 34 in 2005 was $31,161. In 1975, adjusted for inflation, it was $35,296. The comparable data for female workers was $22,815 in 2005 and $16,247 in 1975.

The article then goes on to highlight some things you can do to stretch your money further and make the best decisions with your money. The advice is pretty standard such as save for retirement, create a budget, learn about financial products, etc. But, I think the very last point they make is the most important: get more educated. Our generation has a wealth of technology at our fingertips so there is no excuse for not taking advantage of the information that is available. I encourage you to check out the article for more.

Source: Gen Xer More Cynic Than Slacker

Author: Jeremy Vohwinkle

My name is Jeremy Vohwinkle, and I’ve spent a number of years working in the finance industry providing financial advice to regular investors and those participating in employer-sponsored retirement plans.


I guess I'm not as shocked by marginally higher median dual-earner incomes when I consider the Law of Supply and Demand. Have people sought degrees in proportion to the new jobs demanding those degrees, or have people sought degrees in response to the higher wages reported by such degree holders at that time? If more the latter than the former, then one can consider the possibility that real wages have not grown much because there is an oversupply of degree holders relative to the demand of jobs actaully requiring those degrees.

As far as not boding well (presumably for the US economy?), I want to believe that excesses are eventually squeezed out of a free market. Academia has to be one of the most masterful case studies in marketing, ever. At some point, people will not be able to afford tuition, or rationally value the product at less than the retail price tag.

I don't see any endemic problem. People have made these choices (paying for tuition beyond their means, spending beyond their means, etc.) of their own free will, and they will continue to act in what they believe is their own best interest. Marketing is apparently quite effective. As a consumer (not a marketer), it embarrasses me. But as a partial-share business owner, I take it for what it is.

If a cause is too much (easy) credit, that can (and will) be worked out of the system as well.


What I took from the median income claims was that things have not really improved over the the past 30 years. Single men have a lower median income while dual income families are marginally higher at 5%?

I do find that kind of shocking that the median incomes from 30 years ago have not, or barely increased at all when compared to that time there are far more college graduates that should be earning more.

So I didn't look at the numbers as a hard and fast flag of whether or not that generation is earning more or less, but rather just looking at how little or no improvement over that span of time really doesn't bode well.

As far as the expenses go, as you mentioned there are far more college graduates now as opposed to in 1975. That being said, again with no real improvement in the median income yet many people in their 30's with a degree and possibly student loan debt puts them in a far worse position than someone working in 1975 in a factory with no degree and no debt.

With technology, I think this partially plays a part to today's increased expenses, but probably not to the degree Linda made it seem. But I know when I was growing up we didn't have cable TV, there was no such thing as cell phones, no computers (well, we did get a commodore 64 when I was 6).

Anyway, living in the 60's and 70's was a far simpler time with far fewer technology or luxury related expenses. Yes, technology does decrease in cost after time and like you said, some of it has to do with wants as opposed to needs, but as a whole I do think it can, and for many people is more expensive for the basics than it was 30 years ago.


I am suspicious of one of the premises of the article, that the 25-34 age range in '05 has lower real income than the same range in '75. Using the figures given in the article itself, a 2-income man-woman household in '05 had nearly a 5% larger income in real dollars than the same such household had in '75 (~$53,900 to ~$51,500). So that casts doubt on the "too little money" claim. (Not all households are 2-income man-woman, and although the single man household is worse off, the single woman household is significantly better off in % real dollars, so I still don't buy the "too little money" part.)

What about expenses? Those cited were school loans, bigger lifestyle, computer, cell phone, broadband service. I don't have data but am willing to put some coin on a bet that there are more college degree holders or pursuers in '05 than there were in the same age range in '75. Anecdotes abound that school expenses are much higher (even in real terms) now vs then. Depending on your view of the value of a 4-hr B.S. degree and whether it pays off in net worth later than life, you may or may not think that incurring such a higher expense helps this generation vs the one 30 yrs ago. The rest of the expenses listed were mostly technology goods and services, and in real terms technology, especially hardware, gets cheaper all the time, in both nominal and real dollars! I have a hard time believing that higher generational expenses are for necessities, but rather because people now choose to spend more on non-necessities.

I did read the full article, and was not impressed with Linda Stern's poor analysis of Census data and suspect conclusions therefrom.