An article at msn discusses why Generation X is broke. The article suggests that it is due to a lack of financial education. That we were coddled too much by our parents and then just thrown out into the adult world full of credit cards, mortgages, student loans, etc.
I have to say I agree. However, I don’t think this is a justification for Generation X situation of being broke. Just because our parents didn’t explain personal finance doesn’t mean we have a right to dig ourselves into a deep hole. Nor does it mean that we can continue to use that excuse.
The truth is that living responsible is hard. Whether you are 20, 30, 40, or 50-something, living below ones means is difficult. It’s a choice, and not only does it affect you when you are young, but it affects you as you age.
I think it’s society’s views of debt overall, not just Generation X. Our parents many have not saved for retirement adequately, many have credit card debt. It’s a changing lifestyle in the US. That justifies keeping CC debt, keeping mortgages, car loans.
I don’t think it’s solely due to Generation X. It’s due to everyone wanting a nicer lifestyle than they can afford. It’s due to people wanting everything NOW, and not wanting to wait. I think it’s due to people assuming that nothing ever needs to be saved or paid back.
The US society no longer values savings. The average saving rate is negative. The average credit card debt is $8k. The average retirement amount saved is $150k. So can you really say only Generation X is broke? Or is it everyone in our society that is contributing?
It’s easy to pick on Generation X and say they are doing poorly. But I don’t think necessarily everyone older is doing fantastic. I think it’s because as a society we justify purchases. We pretend everything is “great” without really admitting what is going on.
If we did acknowledge our economic problems it might cause true financial disaster. We have a government hoping that we’ll spend our economic rebates to stimulate the economy. Encouraging people to spend. We have no personal accountability for the mortgage foreclosure situation. Instead everyone blames everyone else.
So is Generation X alone? No way. It feels as though everyone is broke. Everyone is living beyond their means and spending. It’s not just one generation, or else the numbers would say debt free for everyone else. As a society we need to change our mindset and stop trying to point the finger of blame.
3 responses so far ↓
1 tom // Apr 25, 2008 at 8:11 pm
I think with Gen Y or Gen whatever-we-are, we will start seeing that savings rate and 401(k) balance rise. We 20-somethings have seen both the ups and downs of the markets and have learned the tremendous benefits of retirement savings.
2 Dreamer // Apr 25, 2008 at 8:39 pm
I disagree with Tom. There are quite a few Gen X’ers or Y’ers who do know how to save and see the value in savings and retirement savings. However there are many more who don’t. When reading blogs it seems alot of people in the 20 something age bracket have seen the light and are saving. But go away from the blogs and talk to many of my 20 something friends or coworkers and you’ll find they don’t think they need to save yet or they don’t feel they can. Many of my friends believe I’m crazy for saving so much into my 401k already. Others don’t see how I can afford to save anything at this age. All of them say they will start saving in a few years but a few years becomes many years and then it’s too late.
3 Meg from FruWiki and All About Appearances // Apr 25, 2008 at 11:00 pm
I’m in my 20’s. I work hard and I’m not dumb by any means. I graduated from a top university with a 4.0 for goodness sakes!
However, all the in’s and out’s of financial planning make even me feel like an idiot. We weren’t taught much on the subject in school at any level and I think most of our parents were equally confused.
Are we over-spenders? Yes, most of us are. I know I was and sometimes I still am. However, I think a part of it is that we overestimate what we can afford and how much we will be making after graduation because we simply don’t know how to plan for financial issues we don’t understand or aren’t even aware of. Money doesn’t go as far as we thought it would — especially considering rising prices and the current job market.
I’ve spent a lot of time trying to educate myself and sometimes I feel even more confused and overwhelmed. But many if not most of people my age and younger don’t even have the time I have to study up on this sort of thing on their own and weed through a ton of mixed messages and misinformation. And even if you figure out what your choices are, then comes the analysis paralysis brought on by having too many choices — probably a big reason why so few people are saving for retirement.
If anything has saved me, though, it’s just trying to live frugally and spend less. I still don’t have much in the way of a budget, but I do keep track of my debt and the money I do have. That way I can track how things are doing from week to week and month to month and see how choices I make are impacting my finances.
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