How the GFC has affected Generation Y and their money
At lunch today, a friend was telling me how this was her year to save. She said how it was lucky, because her new attention to finances seemed to be reflected by most of her friends. No one was suggesting expensive outings or throwing their money around as everyone felt the same way about spending; that it shouldn’t be on the cards right now. Last night, I had my first serious conversation with a friend about house deposits.
Gone are the days where we scrimped around for loose change to buy Maccas, people seem to be getting serious about their finances.
Is it just that we are getting older or is there something deeper going on? Has the Great Financial Crisis really affected my generation to the point where we are going to change our financial behaviours?
Tight job markets
The unusual difficulty we’ve had finding jobs post-university probably had an affect on my generation. While unemployment figures improve for everyone else, for us poor suckers, they’re just as bad as they were during the GFC. This unexpected difficulty (after all, we were the generation that wasn’t often told no) may have had an effect on our long-term behaviours.
Frugal fixation:
Looking for work straught after graduating is not an easy task. Financially, it makes sense to prepare properly for the challenge and not be left without any money when the process takes longer than anticipated.
Cost of living
The actual inflation of prices is a notoriously difficult sum to track down in Australia, and one that I am still unsuccessfully looking for. Irregardless, certain things (most obviously petrol but to a lesser extent, fruit and vegetables) are more expensive. This can provoke two main responses: a proclivity to two-minute noodles or a desire to budget more to accommodate rising grocery costs.
Frugal fixation:
To shop cheaply takes time and effort. Swig by your local bakery and greengrocer towards the end of the day and see if they are throwing things away more cheaply. Invest in cooking better food and you’ll feel less hungry, resulting in less expenditure on short-term tummy fillers.
Warning bells
I know I have previously written about the ignorance of my generation, of our tendency to be consciously naïve about issues. That said, it is becoming increasingly obvious that an ageing population is going to necessitate big shifts in policy and in individual finances. Superannuation, taxation rates, mortgages the size of the house. Increasingly, I am surrounded by people who seem to be influenced by these issues and are taking steps to remedy it.
Frugal fixation:
Understanding your personal finances now is crucial. Knowing what you want and setting a deadline for it (“I want a house deposit saved by 2015”) will help you budget and prepare for the future.
Is my generation more frugal as a result of the last couple of years? Probably not. We’re certainly more akin to our parents’ style of spending than our grandparents. That said, while I don’t think any of us will be buying our own cows or steaming of the stamps any time soon, there is certainly a note of awareness creeping in. That the choices we make now will affect the rest of our lives and if we start saving today, we are on our way to a financially secure existence.
Do you think the GFC has affected Generation Y’s spending patterns?
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