Despite Having The Highest Income, Gen X Also Carries The Most Debt, Explaining Their Rock-Bottom Consumer Sentiment

Regarding money, Generation X is stuck between a rock and a hard place. Born between 1965 and 1980, this group is in their 40s and 50s, in the middle of their peak earning years. 

On paper, Gen X seems to be doing well – they have the highest average income of all generations. But behind those numbers lies a far more complicated reality. Gen X also carries the most debt, so their outlook on money and the economy is anything but rosy right now.

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One would think having the highest income would mean a comfortable lifestyle, but for many Gen Xers, that's just not the case. While their incomes are higher, so are their expenses. A lot of them are dealing with what's called the “sandwich phase” – trying to financially support their aging parents while also helping their children. Add in rising living costs and it makes sense why many in this generation feel they can't get ahead, no matter how much they earn.

It’s no surprise that, according to the University of Michigan’s consumer survey, older millennials and Gen Xers have the lowest consumer sentiment among age groups.

The debt problem only makes things worse. Gen Xers carry a significant amount of debt, much of which is left over from earlier life stages. Some still pay off student loans, while others deal with credit card debt, mortgages and loans for their kids' education. 

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As of last year, Gen X had the highest average debt of any generation – about $157,000 per household, according to Experian. Even with a good income, servicing that much debt eats into any potential savings or financial cushion.

Inflation has also contributed to their financial stress. With prices rising faster than incomes, everyday expenses like groceries, gas and housing are taking up an even bigger chunk of their earnings. 

According to recent surveys, over half of Gen Xers say their income isn't keeping up with inflation. That means less money for the things that make life enjoyable, like dinners out, vacations or even buying something new occasionally. 

On top of all that, interest rates have been high, which makes borrowing more expensive – and Gen X already has a lot of loans, adding even more to their financial stress. To control expenses, many Gen Xers are reducing their spending on unnecessary items, such as trips and streaming services. Many are also trying to ensure that they have enough money to cover necessities and save for retirement, which is rapidly approaching.

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