Why 'Gen Y' should cry

[FunkMonk]

*steps off lawn*

http://www.suntimes.com/lifestyles/2195700,CST-NWS-geny24.article#

April 24, 2010
SUN-TIMES STAFF, GANNETT NEWS

"Generation Y" -- some 50 million teens and twentysomethings -- is the first generation in a century that is unlikely to end up better off financially than their parents, according to a recent research report.

Even before the recession, those in Generation Y faced a range of financial pitfalls as they embraced expensive high-tech gadgets and added credit card debt on to student loans.

Now, stagnant wages, job insecurity, the decline in employer-sponsored health insurance and retirement benefits, the rapid increase in basic expenses, soaring debt and minimal savings have jeopardized the economic security of the entire generation, according to the report by Demos, a public policy research and advocacy think tank.

"The recession has hit them hard," says Jose Garcia, associate director of policy and research at Demos, based in New York. "It affects their income potential, their saving potential and their career-ladder potential."

No standard definition for Generation Y exists, but analysts generally classify anyone born from the 1980s to 2000 as members. Their plight seems as much created by members' pre-recession personal finance habits as by the misfortune of coming of age as the recession took hold in December 2007.

On average, Gen Yers each have more than three credit cards, and 20 percent carry a balance of more than $10,000, according to Fidelity Investments.

The generation is graduating from college with an average of $23,200 in student debt, according to the most recent data from the Project on Student Debt. That's a 24 percent increase from 2004.

"They have high, unrealistic expectations," says Lee Jenkins, author of Lee Jenkins on Money and a managing partner of Atlanta Capital Group in Atlanta. "And many of them don't manage money very well."

And the unemployment rate for Gen Y remains much higher than the national rate. In March, the national rate was 9.7 percent, compared with 18.8 percent for workers younger than 25, according to the Bureau of Labor Statistics.

"The economy has given them a dose of reality," says Jenkins.

And unlike their parents, who had the G.I. Bill and pension plans, those in Generation Y have few safety nets.

Faced with financial setbacks, Gen Y members are starting to be more realistic. More than half of them, 55 percent, say they are watching their spending very closely now, up from 43 percent in 2006, according to the Pew Research Center.

THE TROUBLE WITH GENERATION Y

* Only 58 percent pay monthly bills on time, a National Foundation for Credit Counseling 2010 survey found.

* They are the least likely of any generation to be covered by health insurance. Just 61 percent say they were covered by some form of a health plan, according to a Pew Research Center study released in February.

* Nearly 70 percent of Gen Y members are not building up a cash cushion, and 43 percent are amassing too much credit card debt, says a November MetLife poll.

* Sixty percent of workers 20 to 29 years old cashed out their 401(k) retirement plans when they changed or lost jobs -- typically a big financial no-no because such a move squanders retirement assets and forces the recipient to pay a tax penalty, an October study by Hewitt Associates said.

* About 37 percent of 18- to 29-year-olds have been underemployed or out of work during the recession, the highest share among the age group in more than three decades, according to the Pew study.

Please allow me to be smug sitting on the mercenary money I collected fighting in Mesopotamia in the Bush Crusade.

[Grey Fox]

I don't have 10 000 in debt. Hell, I have maybe 1k in debt.

[The Brain]

Fucking hippies.

[CountDeMoney]

As a member of Generation X, all I have to say is boo fucking hoo.

[DisturbedPervert]

And unlike their parents, who had the G.I. Bill and pension plans, those in Generation Y have few safety nets.

Isn't the GI Bill still around?  And I think most Gen Y parents weren't old enough to have been drafted

[HVC]

i know two people how have already declared bankruptcy before the age of 26, and a bunch more that are in magor (non-school related) debt.

[Josquius]

A lot of people are stupid. Modern society offers more potential for the stupid to be punished. Meh.

* Only 58 percent pay monthly bills on time, a National Foundation for Credit Counseling 2010 survey found.

Strikes me as very odd.
Regularly? You can do that?
I've missed some on occasion of course. But then most people have.

[Caliga]

Chronic credit card debt is the mark of a complete fucking idiot.

[HVC]

Chronic credit card debt is the mark of a complete fucking idiot.

No it's a mark of a mommy and daddy that will get you whatever you want so that when you grow up you don't realise shit costs money and if you buy more then you make you're in trouble.

[Caliga]

You are describing a flavor of idiot.

[FunkMonk]

As a member of Generation X, all I have to say is boo fucking hoo.

Spoken like a true Gen Xer.

[HVC]

You are describing a flavor of idiot.

in the end it's all the baby boomers fault.

[JonasSalk]

I have 3 credit cards and they all have zero balance...does that make me a Gen Awesomer?

[JonasSalk]

Isn't the GI Bill still around?

It is, which is why that part of the article didn't make much sense.  If people want to be babied and taken care of and have everything handed to them, the .mil is definitely the way to go.

"Support our soldiers."

[Sheilbh]

This doesn't ring true.  My impression is that the generation just leaving school and university now, while saddled with (student) debt, are a lot more financially sensible than their older brothers and sisters, or mums and dads.