The Young and The Feckless: Millennials and the Morality of Money

J. Maureen Henderson
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Although dour, USA Today's stats-heavy piece on Gen Y's financial woes isn't anything we haven't heard before. We're the first generation in a century likely to end up monetarily worse off than our parents. Student debt load has increased 24% since 2004. 37% of 18-29 year-olds are underemployed or unemployed. And the beat goes on and on.
Photo by stuartpilbrow

What is interesting in this story and in others (say, Salon's
Hipsters on Food Stamps
piece, for example) is the degree of moralizing, finger-pointing and general tut-tutting that seems to accompany discussions of Millennials and money. Neither general poor bashing nor the stereotyping of Gen Y as coddled dilettantes who can't hack the real dog-eat-dog world are anything new, but they seem to have joined forces to infect the discourse with an uncharitable air of, Well, those brats are going to get a dose of reality now. While I'm sure these people exist (and that one or more of y'all will bring them to my attention in the comments), I don't personally know anyone who blows their rent money on an iPad or prioritizes a pair of Louboutins over student loan payments. However, I do know plenty of twentysomethings who were never taught the first thing about personal finance or budgeting in school or at home, who don't track their spending and who live pay check to pay check either from necessity or again, a lack of skills to develop a realistic system of spending and saving.

While we might have every right to feel miffed at being portrayed as job-hopping spendthrifts and to be disgruntled over having to deal with the career body blow that goes hand-in-hand with coming of age in a recession, where does indulging this indignation actually get us? Tempting as it is, getting mired in fighting the moralistic rhetoric we're tagged with isn't going to fix the economy, and it isn't going to lower the youth unemployment rate or increase access to internships for low-income students. Gen Y needs to focus on what *is* within our control - the profoundly unsexy work of personal budgetary stock taking. We need to stop thinking that financial planning (both the act and the professional guidance around it) applies only to those with money in hand or that being purposeful about our financial futures is something that can wait until we've established our careers. We need to do some extra credit homework around determining our financial goals (getting out of credit card debt, owning a home within 10 years, etc.) and figuring what it would conceivably take to get from here to there and adjusting expectations and goals accordingly. And maybe, just maybe, after we've assessed the homefront, we can turn our collective attention to the student loan system, the health insurance sector and (a girl can dream, can't she?) lobbying efforts aimed at making financial education part of secondary school curriculum.

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9 Comments Have Been Posted

The sad reality... that most people in the US are not good at creating and managing good financial plans no matter what age group they are in. I'm a part of Gen X, and I have several friends who regularly make or have made all kinds of bad financial decisions (e.g. buying a house at the wrong time for too much money, buliding up no savings and living hand to mouth, deciding at 35 they deserve the $40k+ wedding no matter what, etc.). Some of those people are now at a point where they are getting hurt by their lack understanding and/or focus on financial planning, which has been hard for me to experience at times. So it annoys me to see folks my age and older finger-wagging the younger generation for not being any better than they are with money.

Anyway, I've been following this issue for a couple of years on the Freakonomics blog. They have mostly focused on the efforts of Annamaria Lusardi at Dartmouth and her new Financial Literacy Center, so I'm going to skip their link and just post a couple of hers:

Through these sources, I've found lots of data that show that people of all ages are making bad financial decisions these days.

So cheer up, Gen Y - you are not alone! Especially on the secondary education front: Annamaria Lusardi is right there with you too!

I think alot of gen Y's are

I think alot of gen Y's are rethinking the whole equation. (Like what happening in western europe and japan). We see our parents work their whole lives buy a house, save up, get married, have kids, work everyday, play it safe and smart. AND THEY ARE ALL DIVORCED, UNHAPPY, BROKE, OVERWORKED, SPIRITUALLY VOID, modern day slaves..

Why would i want to follow those footsteps if the end result still leaves me unhappy??

P.S. Americans have always been under the assumption that the next generation is better than the previous. But as you say in this article we are worse off financially then our parents. So our parents sacrificed their life to raise us so that we can have a better life. Woops we ended up with a worse life and so their sacrifice was for nothing. THE FUTURE IS NOT ALWAYS BRIGHTER. You can't rely on your kids having more opportunities than you, your house is not ALWAYS going to increase in value.

Absolutely agree!

The snide treatment of young people as entitled brats who need a dose of financial reality pisses me off no end.

First of all, it's nearly always aimed at young white people raised in the suburbs, as though they constitute the majority of young people struggling with credit card and student loan debt. Absolutely no mention is made of urban, rural or non-white young people who are often far worse off in terms of debt and net wealth.

Secondly, it's the sheer hypocrisy of it...We're ALL getting a dose of financial reality, thanks to the incredibly poor financial and regulatory skills of the Baby Boomers and Greatest Generation dudes on Wall Street and in Washington (and yes, they're almost exclusively dudes,, old white ones). They're going to tsk-tsk at us? Fuck them.

Most 20- and 30-somethings I know were never taught about how to handle credit, interest payments, budgeting, etc. I think a lot of parents dropped the ball, and left us to work it out for ourselves. It's not surprising that many of us sank instead of swimming, or sank for a while before learning how to swim.

I think the mathematics and economics of personal finance should be taught in school, starting at a fairly early age--not only because it's an important life skill, but because it's the underpinning of most social sciences.

Becky Sharper

The Young & the Feckless...

I'm a Gen-Xer and I kinda have to disagree with this statement in your article: <i>"I don't personally know anyone who blows their rent money on an iPad or prioritizes a pair of Louboutins over student loan payments. However, I do know plenty of twentysomethings who were never taught the first thing about personal finance or budgeting in school or at home, who don't track their spending and who live pay check to pay check either from necessity or again, a lack of skills to develop a realistic system of spending and saving."</i> I don't know anybody either, but, I do know plenty of twenty-somethings & thirty-somethings who are still dependent on Mommy & Daddy to pay the bills so they can afford the nice things in life. Parents, you're not doing any favors for your children by continuing this behavior!

My parents were both bankers and never explained any of this financial stuff to me and guess what, I <b>REALLY</b> effed up my credit - my dad cut me off at financially at age 22 (To which he said to me at the time, jokingly, but with all true sincerity, "Our last name ain't Rockerfeller and you aren't a trust-fund baby. So, use your very fancy college degree and get a <b> REAL</b> job that offers benefits and security.") When I had to borrow money from both of them, at different times, they gave me the money but both stressed how disappointed they were of my behavior. This caused me so much psychological guilt that I was hurting my parents - I was the so-called "good kid" (honor roll, student government, community activist, etc...) and I was being so selfish that I couldn't see the pain I was causing others, just by not being responsible for my poor understanding of my spending habits. So, I made up my mind at age 29 - No more! I was going to be responsible for my actions. I'll be 33 in a few weeks, but, I make myself a budget; I ask questions when things don't make sense; I pay my bills immediately after I get paid so I don't "forget about it"; I set up my own savings account. I haven't got around to setting up the 401K yet, but I will by the end of next month. There is plenty of information out there and people who can help you, you just need to tell yourself, "No more!"

Please, please, please, learn from mine and my parents mistakes - teach your kids about money, and if you're in your mid-twenties & thirties - grow up and realize, you're an adult. You should not be asking your parents to bail you out - you need to be proactive and try and figure out how to get out of your problems on your own.

Good advice, but...

I don't quite see where your disagreement with Maureen comes in. It sounds like you are both advocating for more financial literacy among Gen X/Yers, right? (I am too, btw. Go financial literacy!)

People interested in getting more financial info might want to check out former Bitch blogger Lisa Schmeiser's site <a href="">Filthy Commerce</a>, or <a href="">NPR's Planet Money</a>.

Kelsey Wallace, Web Editor

I love Planet Money!

I love Planet Money! Especially their collaborations with This American Life. They've been doing the best coverage of "the financial crisis" that I've heard anywhere.

I'm 27 and in some debt,

I'm 27 and in some debt, although it's not as bad as it could be. Some is student loans, and some is credit card debt. If I had chosen a different career path, perhaps I wouldn't be in so much debt. But I decided to go into the nonprofit world and I love it. A lot of people in my social circle (and I assume, in my generation as a whole) have made similar decisions. Should we feel bad about choosing fulfilling work that doesn't pay us very well but makes the world a better place?

Interestingly, a lot of people that I associate with are choosing not to have kids. Some of us don't want to for one reason or another, but I think some of us just can't afford it. It should be interesting to see how these trends play out over the coming decades.

The Cash You Save Will Be Your Own

The current recession is bad, but we are certainly not the first generation in America to face a difficult job market. I bet my great-parents were doing A LOT worse than their parents during The Great Depression. I feel fortunate to have parents and teachers who educated me about saving and investing and the danger of credit card debt. Now I need to learn more about saving to some day buy a home I can actually afford with a fixed-rate mortgage.
There is a need for more federal regulation of banks and credit card companies and reform as well as personal responsibility. I am very frightened by the fact that student loan debt has gone up so much in the last 6 years. I wish there were more programs like Americorps and Teach for America to allow students to work off college loans.

While I agree that something

While I agree that something needs to be done about student loan debt, programs like Americorps and Teach for America are not the way to go. In my experience, working a minimum wage job will pay you more in every instance than their stipend plus the amount credited towards your student loan.

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