“Thanks, Captain Obvious.”

Posted On October 7, 2015

Some of my favorite commercials are the Hotels.com ads with Captain Obvious. When the hotel guest locks himself out of his room while wearing nothing but his underwear, Captain Obvious says: “Most people wear pants.”

A quick read of a recent MarketWatch article on the biggest financial mistakes typically made by Generation X and Generation Y might make even Captain Obvious himself say, ‘Well, duh.’

They aren’t saving. They don’t get professional help. They aren’t taking full advantage of employer 401(k) matches. They aren’t investing, and they aren’t saving outside their 401(k).

You don’t say?

A look inside some of these issues, however, reveals some interesting truths. For Generation X, it’s not necessarily that they aren’t saving – it’s that much of their saving is for their children’s college educations instead of retirement. While it’s easy to see the problems inherent in putting off retirement savings, who can fault them in putting a little extra in the college fund with the skyrocketing costs of student loans?

Which leads us to where much of millennials’ extra money may be going – to pay back those student loans. Federal student loans taken out between 2001 and 2013 carried interest rates as high as 6.8 percent for students and 7.9 percent for parents, while consolidation loan rates could be as high as 8.25 percent.

As for stocks, after watching the plunging roller-coaster rides the market has taken in recent years, who can blame them for being a bit risk-averse? Any admonition to invest in stocks carries the caveat: “as long as it’s done smartly.” And therein lies the rub. What’s “smart” in the stock market often isn’t revealed until after the fact.

The economic valleys of the past decade have also resulted in fewer raises for many Gen-Xers. With costs rising and salaries often failing to keep pace, the pool of money available to be set aside for savings has shrunk. Now that the economy is starting to pick back up, Gen-Xers in particular would be wise to ramp up their level of savings to make up for the shortfalls while times were lean.

We haven’t been saving enough? Thanks, Captain Obvious. We don’t need another hotel room; we just need to get back into this one.

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