Sunday, October 26, 2008

Don't Stop Spending Just Yet...

Chances are you or someone you know has been affected by the current financial crisis. Maybe a parent’s investments have taken a hit or maybe you’ve lost some money yourself. Regardless, if you’re a member of Generation Y the current crisis might not be all bad. Here’s why:

According to Jeffrey Jensen Arnett, in his book "Emerging Adulthood", instability is one the many characteristics of Generation Y. This instability, he writes, has many applications. Generation Yers, for instance, usually have casual relationships, short-lived jobs and few financial commitments. What exactly does all this mean? Well, while an older individual, say a Generation Xer, might have a new family to take care of or a huge mortgage to pay, the fickle Generation Yer is most likely not accountable for such things.

The younger members of Generation Y, in particular, are not too worried about their financial futures—not their immediate futures anyway. For now, their focus is on spending. Whether this spending is on a costly college education, or something as frivolous as a night out with friends, Generation Yers can afford to splurge, sort of.

One must remember that once it comes time for Generation Yers to enter the workforce and take on the responsibilities of adulthood, the transition will probably be a hard one. These individuals will face difficulties that past generations never had to. The job market will probably be incredibly competitive. Add to that the stress of paying off hefty student loans and all of the debt that they might have accumulated in their youth and Generation Y will have a lot on their plates in coming years.

But for now, Generation Y is free to spend as they wish. Some advice: spend wisely and don’t forget to save. While the state of the economy will probably improve, debt does disappear so easily. You’ll need a backup plan –in other words, savings. Remember this the next time you have the urge to splurge.

For more information, check these articles out:

Why the Financial Crisis is (Mostly) Good News for Gen Y

'We're not worried just yet - we'll still drink and party'


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