Money Management

People over 60 may no longer know the American economy as it exists for young people. Read on for a few pearls of boomer money wisdom that may not work for you. [[{“value”:”

I have a great deal of love and respect for the baby boomers in my life — which includes my parents. Over the years, they’ve imparted a lot of solid wisdom and advice, and I’m grateful for it. I have never regretted arriving early for a job interview, for example. (Thanks, Mom!) But times have changed, and the world they grew up in is long gone. So take these bits of boomer money advice with a grain of salt.

1. “Renting is throwing money away!”

Buying a house has become harder for the average American over the last few years, thanks to a fine combination of higher home prices and higher mortgage rates. And yet, if you talk to older folks who had the privilege of buying houses when they were pretty young, you might hear the opinion that renting is a waste of money — you’re not building equity and you get no return on the money you spend on rent. Here’s the thing, though: You’re paying for a place to live, and giving yourself more flexibility and lower housing bills in the process.

And according to recent Realtor.com findings, if you consider the numbers, it’s cheaper to rent than to own in the 50 largest U.S. metro areas. What’s a person supposed to do if they need a place to live and can’t cover the big upfront and ongoing costs that it’ll take to buy? And what if they are in no way settled in one geographic area for the long haul? Renting is the answer.

And you can even build wealth as a renter, if you’re fortunate enough not to live paycheck to paycheck. I’m a brand-new homeowner, and buying a home in 2024 was my top goal. But if I had been comfortable continuing to rent, I could have taken my excess earnings and invested them. The stock market has returned an average of 10% annually over the last 50 years — sure, homes often appreciate in value, too, but you have to sell a house to profit from those gains.

2. “Go to college or you’ll be poor!”

Raise your hand if you are under 50 and grew up hearing this one. For me, there was really never a question that I’d be getting at least a four-year degree (and I ended up with a two-year graduate degree on top of that, too). Part of that was because I genuinely wanted to pursue higher education, but I also heard from basically all the adults in my life that college was necessary if I didn’t want a low-paying job.

While it’s true that those who’ve been to college earn more on average (typical salaries for bachelor’s degree holders are 86% higher than for those with just a high school diploma), we’re avoiding the elephant in the room here. Higher education is expensive, especially if you are like me and have no family money to send you to college and must rely on competitive grants and scholarships — or take on debt to attend school (or both). Pursuing higher education can set your finances back for years.

Meanwhile, if you want to increase your earning power and have no interest in traditional classroom schooling, you have options. The U.S. Bureau of Labor Statistics found that workers in the skilled trades (such as construction, electrical work, and plumbing) earned a median salary of $55,680 in May 2023 — higher than the median wage across all occupations, which was just $48,060.

Many of these jobs require some schooling (though a lot less than your average office job), or an apprenticeship period. And many are physically demanding. But they are also in demand — there will always be a need for these jobs. AI won’t take your construction job — but it might take my writing job.

3. “Discussing your finances isn’t polite!”

You have likely heard from an older person in your life that talking about money, such as salaries, debt, and beyond, is rude and best avoided. According to an Empower survey from 2023, the older set (boomers and Generation X) are a lot more reticent when talking about money — just 38% of Gen X and 22% of boomers say they are more free about discussing financial topics. That’s compared to 56% of millennials and 49% of Gen Z.

In practice, people are taking their money talk to social media. “Loud budgeting” has been a major trend on TikTok — and it consists of talking about your financial situation and being honest and upfront when you can’t afford something or just want to pursue different financial priorities.

It’s also about proudly declaring your money goals and encouraging the people around you to achieve theirs. Surely this is a healthier and more productive approach to money management than staying quiet about your finances!

If you’re arguing with your boomer parents (or grandparents) about housing, education, or money talk in 2024, just remember that it’s a much different world now than it was when they were your age. Remember that they mean well — but make sure you do your own research and consider what works best for your life and your budget before you follow any well-intended advice.

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It’s important to know the ins and outs of auto insurance. Read on to dispel some giant falsehoods. [[{“value”:”

Owning a car is an expensive prospect — especially after factoring in the cost of auto insurance. U.S. News & World Report puts the average cost of car insurance in the U.S. at $2,068 per year. But there are different factors that determine how much a policy will cost, from driving history to vehicle model to ZIP code.

The more drivers know about how car insurance works, the better equipped they may be to anticipate the cost of having it. With that in mind, here are some auto insurance myths drivers shouldn’t buy into.

1. Bundling with a homeowners policy is always the best bet

Some will say that bundling an auto and homeowners insurance policy will result in savings on both. That’s sometimes the case, but not always.

For people with homeowners insurance already, it definitely pays to get an auto insurance quote from their current provider. But don’t stop there. Also reach out to other insurers to compare options. That’s the only way to know whose deal is the best.

2. The more safety features a car has, the less insurance will cost

Many new vehicles today come loaded with safety features that are designed to prevent accidents — at least in theory. These include backup cameras, lane departure warning sensors, and brake sensors.

Drivers might assume that paying extra for a vehicle that has these features included will result in a price break on auto insurance premiums, since they might reduce the risk of an accident.

But while that may be the case, those features are also expensive to replace in the event of an accident or damage. And so those features may not result in savings at all. If anything, they could result in higher costs.

3. If another person drives and damages a car, their insurance will pick up the tab

It’s not uncommon to lend a car to a friend or family member for a day. But don’t assume that if an accident ensues, the driver’s insurance will pick up the cost of repairs.

When a car is in an accident, it’s that car’s insurance that’s usually billed for repairs. And from there, premium rates on that policy can rise due to a claim being filed against it.

So be careful when loaning out a car. Accidents can happen any time. But it may not be the best idea to loan a car to someone with minimal driving experience or a habit of speeding or weaving in and out of highway lanes.

The more drivers know about auto insurance, the easier it might be to find ways to save on it. So don’t buy into myths like these. Instead, read up on auto insurance to approach the process of buying it more strategically.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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