Jimmy Marks isn’t broke, but he’s badly bent.
There are times when someone makes an over-generalization about people my age and I get my feathers up about it. It’s never good to make sweeping judgements about a group, particularly people my age – we’re all so different, so outstanding. But through personal experience, I’ve found there’s one comment about people my age that’s true: we SUCK at money.
How much do we know? Most everyone I know gets the whole “work for your money” thing. I was a web designer for a year or so and I made some worthwhile achievements. Then I was a waiter. I’ll leave you, dear reader, to figure out which kept me comfortable and which was a job as a waiter.
But then, there’s those around me that seem to forget about the whole “bills, taxes, interest” thing. One of my friends admitted to me that their new job was great because their work didn’t take any taxes out of their paycheck (she was technically classified as a contractor).
“You know they’ll just hit you harder in April,” I said, having played that game before myself.
“What happens in April?” she asked with a growing sense of concern.
Which is why it was no surprise to me to see this article from MSN Money. It’s called “Why Generation Y is Broke“, and it presents some startling facts. For instance:
- 68% of baby boomers are propping up their children financially
- Average college debt: $20,000
- Percentage of bankruptcies in the US filed by people ages 25 to 34: 22.7%
I’ll be the first to admit – I’m not great with money, but I do know when to hang back on the spending and when to go ahead and do what I need to do. Did I get financial planning courses from my high school? Did those lovely years in college prepare me? No – I was simply lucky enough to be the son of the stingiest man in the universe.
My dad helped me open my first checking account and told me the golden rule of money management: “If you spend all your money, I’ll kill you.” That’s a lesson that sticks with a boy of fifteen. But his guidance has meant all the difference in keeping my head above water financially. He taught me about taxes, property values, investments, assets, and personal finance.
The MSN article asks a question: Is Gen Y dumb, or just lazy? I wouldn’t go so far as to call us lazy – or dumb, for that matter – just uninformed. A lot of people don’t get how to balance a check book or track purchases. They don’t get what compound interest means. They don’t know how to solve the little crises that pop up in life. According to the article, more and more high schools offer financial planning classes. That’s good news. I personally think that there should be a course that’s all about budgeting your money and tracking spending. People my age (and in general) hate math, but there’s a case to be made in studying practical math – “life math”, if you will. It’s not always just “credit” and “debit”. You should be taught how mortgages work and how to pick out good rates on loans. More than that, there should be a savings segment.
Emma Johnson, the writer of the article, talks about how Gen Y is a “boomerang generation” - we come back home when we’re supposed to be moving forward. I think it’s more that we’re a generation of “yo-yos”…pardon the phrase. There were any number of articles in the past few years about “helicopter parenting” – that is, parents who hover over their children and try to oversee every facet of their children’s lives. Thus, it’s not that my generation run back toward their parents in times of financial struggle – they just don’t know anything else to do. I think the time has come to pass along a word of advice to my generation:
1) Your parents are trying to save up for their retirement. They want to turn your room into a gym and re-do the kitchen. Quit bugging them with your money problems.
2) Invest your money wisely. An iPhone is a toy. It is not an investment. Its value does not appreciate overtime. If the word “appreciate” doesn’t mean anything to you, you don’t deserve toys anyway.
3) Credit cards are good. They are useful. They are practical. They also have a limit. Don’t go over. And pay them off, for crying out loud.
4) Keep a checking account. Keep a register for it. Remember what purchases you made by writing them down in the register. Keep your statements in a binder or, if you’re so inclined, sign up for e-Statements which catalog your history.
5 (and, perhaps, the most important)) If you don’t know what to do and you need financial planing advice, TALK TO SOMEONE AT YOUR CREDIT UNION OR BANK. They make money, too. And they do it by helping doofuses like you and I figure out what to do with our scratch. Let them help you.
So, it’s here that I have to put up or shut up. If I don’t show that I’m following my own advice, the readers (assuming someone reads my articles besides…well, me) will storm my office with pitchforks and torches and haul me off to be tarred and feathered. So, here it is:
THE JIMMY CHALLENGE
I vow to start putting away a portion of my pay each month into my savings account. After six months, I’ll let you all know how much I’ve saved.
If there’s anyone my age that wants to jump in on this challenge, let me know. I’d love to stack myself up next to some other folks who are looking to get their finances in check.
Right now, I’ve got $5 in my Share plan. I’ll let you know how much is in there when September rolls around, and ask the people who know (CPAs, financial gurus, etc.) what’s the next step in making my money work for me. That way, when someone says people my age are a bunch of bums, I’ll be able to say “not me”.
(PS – if there are any people out there who happen to know of programs that teach youngsters responsible spending, let me hear about it. email@example.com