The Truth About Generation Debt
Somedays it feels like we are a generation on borrowed resources. Time, money, opportunity. And our debts, financially speaking, often aren’t even healthy ones- like mortgages. Instead we get caught up in consumer debt, the kind of debt that makes me wake up in the middle of the night and wonder what it was exactly I spent that money on.
It’s easy to feel that way, but there are some upsides to this crazy generation of ours and US News has inspired these five myths (or truths) about Generation Debt and where we are heading next.
Myth: We Know Nothing About Money
Everyone suspected as soon as a recession hit, Generation Debt would crawl up into the foetal position and yell for help. They were disappointed. Research has tended to show that GD (Generation Debt) were not only more flexible about their working hours, and therefore rode out the recession generally more easily than other groups, they also used it as an opportunity to learn more about their money and get more savvy about their personal finances.
What’s to be learnt? That viewing your money as fun, as opposed to a chore, will help you to make more informed choices about what to do with it, especially if you’re happy to learn more about money management when times get tougher.
Myth: We’re Pessimistic About What’s Next
What people tend to ignore about GD is that we are children of flux. We grew up with amazingly high divorce rates, a fluid labour market and the expectation we’d change careers, not jobs, three or four times. We know that few things are forever, and tend to be optimistic that things will get better, not worse. Research from the Pew Centre showed that while only one in three members of GD currently make enough money to “live the kind of life they want”, nine in ten expect to do so in the future.
What’s to be learnt? Staying positive about your financial future is likely to result in better and more optimistic decisions, and planning for a more fulfilling financial set-up.
Myth: We Waste It Away
Every generation struggles with consumer debt. To suggest that GD has a higher inclination to fritter money away than, say, the Baby Boomers is flying in the face of the facts. Research shows we are less, not more, likely to buy a brand name than other generations. We use the Internet, eBay and compare purchases before deciding. We struggle with the plastic fantastic, but then so does everybody else.
What’s to be learnt? Savvy consumerism will save a lot of money in the long run and help stay out of consumer debt.
Myth: We Earnt The Tag of Generation Debt
Another survey from Pew showed that 60 percent of respondents believe that they have a better standard of living than their parents at the same age. Is that standard of living off the back of a credit card? Not entirely. Yes, many of our generation have big credit card debts. And yes, a significant proportion are carrying even more debilitating student debt. But our generation is also redefining the standards of wealthy- maybe away from home ownership, and towards a great retirement fund and a debt-free lifestyle.
Maybe wealthy means having enough money to support a cause, or travel six months a year. Or staying healthy and happy. We’re Generation Next, and that says a lot for our financial futures
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