Generation Y: A Guide to Personal Finance
Listen up Gen Y! I know we’re young, I know we think we’re hip. The whole world is in front of us, and immortality is a pretty common feeling. But there’s some bad news floating around the horizon, and we better prick up our ears and listen or the bad news is going to get worse.
Don’t hate me as a traitor to my generation, but maybe it’s time that we acknowledged a home truth. Generally speaking, we’re a generation that doesn’t know how to deal positively with money. We’re really good at spending it, and not crash hot at putting it into a savings account.
I suspect part of this is that it feels like we’re a generation confronted with a difficult financial environment. Student debt, high house prices, and youth unemployment heading skywards all contribute to feeling like we have star-crossed financial lives. Up until recently, we’ve lived through very secure financial times. So to be graduating university in the midst of a financial crisis, with a shaky unemployment rate, is not something my peers and I had really reckoned on.
But these things get overstated. Commentators suggest that maybe Gen Y needs to have a bit of a think about whether the price of living is higher or just our expectations. Kimberly Palmer suggests that downgrading expectations might be an important step to gaining financial freedom. I don’t like being told these hardships are all in my head, but when an expert (psychiatrist or otherwise) tells me so, I believe them.
So here are some tips if you come from the iPod generation and want to gain a bit of financial security:
Get old school
Think our grandparents went out every night of the week? Of course they didn’t. They worked hard and lived frugally. Get in on the action. I’m not suggesting corned beef five nights of the week, with gruel on Sundays. Just a tad more self-control about being a pub resident every night except Tuesday.
Get out of debt
Work hard and clear yourself of your student debt. It’s easier said than done, but will serve you well in the long term. Steer clear of the pitfalls of living on credit. Apparently we’re a generation addicted to credit, and we’re in a revolving wheel of debt. Not the best look. Lets try and turn that around. http://www.theage.com.au/news/business/money/gen-y-faces-credit-hurdles/2009/09/29/1253989911323.html?page=2
Think about super
No one wants to believe their going to get old and and achey, but we will so maybe we should be briefly lame and consider it. If your super is all over the place, get it into the fund that suits you the best. Contribute personally, on top of the compulsory employer contributions.
No generation (except, perhaps, the ones that are marched off to war) has it harder than any other. Sure it’s rough at the moment. Finding work isn’t as easy as we thought it might be, and if we lost our jobs, we haven’t saved the money to buffer us for a couple of months. But getting sensible about finances is all that is needed to prepare well for the next 40 years of work, and 60 years of life.
When people talk about Generation Y, they tend to reference our cavalier attitude towards careers or our eclectic taste in music. But the financially savvy generation? Now that’s a tag I could get into.
Are you a Generation Y?
Do you think finance is harder for your generation?
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