7 things that boomers get right about money that younger people can learn from

There’s a lot of talk about the generational divide, especially when it comes to finances. And while yes, times have changed, it doesn’t mean we can’t learn a thing or two from our elders.

Baby boomers, for instance, have a wealth of wisdom to offer about managing money. It’s not about “old-fashioned” ways, but rather smart and proven strategies that stand the test of time.

These are seven nuggets of financial wisdom from boomers that younger folks could really benefit from. It’s all about understanding the value of money and making it work for you, not the other way around.

So let’s dive in and discover what boomers get right about money and how we can adapt these lessons for our digital age.

1) Live within your means

This is a tried and true mantra that boomers frequently echo. The concept is simple and yet profound in its implications.

Living within your means is all about spending less than you earn. It’s about not letting flashy tech gadgets, impulsive online shopping, or the lure of eating out every night drain your bank account.

Boomers understood and embraced the idea that it’s not how much you earn, but how much you save that matters. They focused on needs over wants, knowing the value of saving for a rainy day.

In today’s digital world where everything is just a click away, this lesson becomes even more important. It’s about learning to control your money, not letting it control you.

So, take a page from the boomer’s book – budget wisely, spend smartly, and focus on building a financial cushion rather than indulging in immediate gratification.

2) The magic of compound interest

The boomers knew the power of compound interest and used it to their advantage. I can still remember my grandfather sharing his financial wisdom with me. He wasn’t a tycoon or anything, just a regular Joe who worked hard and saved diligently.

He would always say, “Start saving early, even if it’s a little. It’s not about the money you put in, but the time you give it to grow.”

And boy was he right! I started putting away a small portion of my allowance when I was just a teenager. It didn’t seem like much back then, but over the years, thanks to compound interest, that modest piggy bank transformed into a substantial nest egg.

Today’s digital world offers even more opportunities to capitalize on this concept. From high-yield savings accounts to various investment apps, the tools at our disposal are plenty.

So, lesson number two from boomers: start saving and investing early, no matter how small the amount. Time and compound interest are your best friends when it comes to growing your wealth.

3) Diversify your portfolio

Boomers understood the concept of not putting all their eggs in one basket. In terms of investments, they were keen on spreading their money across different asset classes such as stocks, bonds, and real estate.

Did you know that during the 1970s, a period of high inflation, real estate emerged as a top-performing asset? It was this kind of forward thinking that helped many boomers secure their financial futures.

In our digital age, diversification has become even more accessible. From robo-advisors to crowdfunded real estate platforms, there are numerous ways to spread risk and potentially increase returns.

So here’s another nugget from our elders: don’t put all your financial hopes into one investment. Diversify to protect and grow your wealth.

4) Prioritize retirement savings

Another thing that boomers have always stressed is the importance of saving for retirement. They understood that working life is limited, and having a financial safety net for the golden years is crucial.

Many boomers practiced what is known as “paying yourself first”. This means, before spending on anything else, they’d set aside a portion of their income for retirement savings.

In the digital age, setting up automatic contributions to a retirement account is easier than ever. Yet, it’s surprising how many young people overlook this essential financial step.

So, lesson number four from boomers: always prioritize your future self. Start saving for retirement as early as possible. The compounding effect of time can do wonders for your nest egg.

5) Understand the value of hard work

Growing up, I always admired my mother’s work ethic. She was a boomer who believed in the dignity and value of hard work. It wasn’t just about earning a paycheck, but about taking pride in what she did.

I remember one summer when business was slow at the small tech startup I worked for.

Instead of panicking or looking for another job, I remembered my mother’s words. I doubled down, worked harder, and used the downtime to learn new skills. That period not only helped me keep my job but also led to a promotion when business picked up again.

In today’s fast-paced digital world, it’s easy to look for quick fixes and shortcuts. But the boomer wisdom of understanding the value of hard work never goes out of style. It can be the difference between short-term success and long-term resilience.

6) Avoid debt whenever possible

One of the cornerstone pieces of financial advice from boomers is to avoid unnecessary debt. They lived by the rule that if you can’t afford something, you probably shouldn’t buy it.

Debt was seen as a last resort, not an everyday tool. Credit cards were used sparingly and paid off promptly to avoid interest charges.

In today’s digital world, it’s easy to fall into the trap of ‘buy now, pay later’ schemes. While they may seem convenient, they can lead to spiraling debt if not managed carefully.

So, another invaluable lesson from boomers: be mindful of your borrowing. Avoiding unnecessary debt can keep you financially healthy and stress-free.

7) Money doesn’t buy happiness

Boomers knew that while money is important, it’s not the ultimate goal. They understood that wealth is a tool to provide comfort and security, not a measure of success or happiness.

In our digital age, where we are constantly bombarded with images of material success, this lesson is more important than ever. Remember, the goal isn’t to make money for the sake of it, but to use it to create a life you love. That’s the true essence of financial wisdom.

Final thoughts: Applying the wisdom

The philosophy of money management from the boomer generation is rooted in prudence, patience, and perspective. It’s about understanding that wealth accumulation is a marathon, not a sprint.

These lessons aren’t dated or irrelevant, but timeless principles that withstand economic ups and downs. And while technology has changed the way we handle money, it hasn’t altered these fundamental truths.

“Frugality includes all the other virtues,” said Cicero, the Roman philosopher. This quote encapsulates the essence of boomer financial wisdom – living within means, prioritizing savings, diversifying investments, avoiding unnecessary debt, and remembering that money doesn’t equate happiness.

As we navigate our digital world with its endless opportunities and challenges, may we remember and apply these principles. After all, wisdom isn’t just about learning but utilizing what we’ve learned to better our lives.