Millennial Money
The millennial generation has more access to technology than all previous generations, more than likely to have an email address, a facebook/bebo/friendster page and would rather use text messaging rather than make a phone call. What also makes generation Y different is that they are now less likely to buy a house and more likely to end up high in debt at a much earlier age.
Financial literacy rates are not nearly as high as they should be. instead of needing the cash to go forth with a purchase, they are able to just put it on credit and supposedly not have to worry about it for a while. Students at a young age should be exposed to their personal finances and learn how to make spending plans and track expenses before leaving secondary school.
Financial Responsibility and Independence
More debt is only a result of less financial responsibility of course. Students are now able to apply for credit cards, taking out a mortgage no longer has to be the traditional 30 year no longer requires a 20% down payment as well as a 30 year pay off rate. Now there is a greater variety of mortgages that people can take out.
Considering how we are now a credit card world, people are now able to purchase more than they earn. And unfortunately, education and housing prices have increased at a much faster rate than income. It is now harder than ever to purchase a house and to fund for an education.
Unfortunately, due to the high cost of living and sky rocketing education expenses, more young adults entering the ‘real world’ are still financially dependent on their parents. Newly graduated students still need help in paying off debts, purchasing provisions and the like.
Credit Card Convenience
I myself use a credit card for most of my purchases, from food and clothes to books and flights. This is mostly because using a credit card is so convenient. There is no need to haul around cash and to worry about whether or not you have enough in your wallet. The worst part is probably that you don’t actually see money leaving your wallet, leaving you to forget how much you have spent across the day, week, or month.
So what we can do for the future of our children is raise them differently. Financial responsibility is priceless and can not be disposed of. Purchasing goods on cash rather than credit is an excellent practice. This even goes with mortgages. Putting down 2% for a down payment calls for much higher interest rates.
Have you been exposed to any type of financial literacy education? How do you feel about how students are taught financial responsibility? And will conditions only be worse for future generations or is there some hope out there for our children to get out and remain out of debt?
By heaps
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