"The idea that you can have one income in a household and then go buy a house and live happily ever after does not exist anymore."
On that note, while we love boomers, it's fair to say that some of the money advice they give to Gen Z'ers and millennials is not always great because it might not apply anymore.
Luckily, there are people like Ramit Sethi, who is a podcast host, New York Times bestselling author, and host of the upcoming Netflix series How to Get Rich. Sethi's goal is to educate people on how to reframe their way of thinking when it comes to money. He wants people to ditch the outdated money rules our parents have ingrained in us in order to live a "rich life" (as Sethi refers to it) regardless of our income level or how much (or how little) money we have saved.
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Sethi says his philosophy is about living life to the fullest — while also being financially smart. This approach is the opposite of what a lot of us have been taught our whole lives. Basically, you don't have to sacrifice things you love in order to be money savvy.
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"The idea that you're going to get one job, stick with it for 40 years, and retire on a pension doesn't exist. The idea that you can have one income in a household and then go buy a house and live happily ever after does not exist," Sethi told BuzzFeed.
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"A variety of things have changed, but not everything. Saving money still matters, investing money matters. It's actually easier to save and invest now [more] than ever — it's totally automatic. You don't have to think about it," he said.
While talk of today's economy — especially inflation — is enough to stress people out, Sethi actually believes that with the right plan, people don't need to panic as much as they do over the high cost of things.
"Sometimes when we look at the state of the world, talk to our parents, read the news — which is filled with doom-and-gloom headlines, including inflation — [it can] seem like a lot,"Sethiexplained.
"If you have a solid plan with your money, if you're tracking key numbers, you don't need to be worrying about inflation. You don't need to be tracking the price of asparagus, and you don't need to be feeling guilty about buying a morning coffee," he added.
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Sethi said that although people — such as our parents — often have our best interests at heart when it comes to giving money advice, that doesn't necessarily mean it's the most helpful or even useful advice in 2023.
"Oftentimes, [parents] want safety, not excellence. They want you to be safe, and they want you to have a safe job. I totally understand that. My parents came from another country; of course, they wanted me to be safe," he told BuzzFeed.
A lot of the financial advice that comes from older generations — or even some finance experts — is about cutting out things that bring us joy, like a $6 oat milk latte or dinner with friends, to stay out of debt and have a chunk of money saved in the bank. Sethi is advising people, especially younger generations, to reverse that mindset.
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Sethi explained to BuzzFeed how people can reframe any old-school way of thinking when it comes to money by first answering a few questions. "Step one is identifying your money dials. Figuring out your money dials requires you to ask yourself, What do I love spending money on? Not like, but love," he said.
"So an example of a money dial for someone can be: Number one is eating out. Number two is travel. Number three is health and wellness. Number four is convenience," Sethi explained.
"After you figured out your money dials, you have to know your numbers. The four key numbers you need to know are [first,] your fixed costs — that includes your rent or mortgage, your utilities, subscriptions, groceries, and everything that stays the same every month. [That] should be 50 to 60% of your take-home pay," he said.
"The next one is your savings. [Then] I would suggest ... 5 to 10% of take-home pay in investments. At a minimum, I'd like to see that number higher because every dollar now is worth much more later," Sethi told BuzzFeed.
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"Finally my favorite — guilt-free spending should be 20 to 35% of your take-home pay," Sethi shared.
"So if you want to buy a cashmere sweater, if you want to go to a yoga class, you've already planned for it. Every time you go, you'd never have to feel guilty because automatically, your money is being saved and invested, and your expenses are being paid while you are enjoying the thing you love," he further explained.
Lastly, Sethi shared even more advice on how Gen Z'ers and millennials can take control of their finances in this economy.
"You can absolutely take control of your salary, you can negotiate; that's a skill you can learn. You can automate your savings, even if you can't do 5%, or 2%," he said.
