GenY Is Bad With Money? Huh?

This morning, I came across an article about how GenY are financially inept. I’m not quite sure what to think. While I had some financial difficulty transitioning from college into working life, I can’t imagine the pervasive cluelessness of the person in the article. Wouldn’t you expect someone with a background in photography, a profession where most people either operate a small business or work as free-lance contractors, to maybe perhaps receive at university some education about how to run a small business?

Not to mention, I do not understand how you can get through four years on a college student’s income without even the vaguest idea of budgeting! My family had to do this before I even started college to determine if the student loans would be enough to cover the difference between what my parents & I could pay and what college actually cost. Any parent that didn’t bring their kids into that discussion would be missing the entire point of college as “adulthood-lite”. It’s not just about the freedom of living on your own; college is about steadily taking more responsibility for your own life. And the first part of that is being aware of the things you will one day be fully responsible for.

My own problems stemmed more from a lack of planning long-term financial goals. You know, if I want a new car in X yrs then I have to save $Y a month for Z number of months. I do agree with the article that good habits and financial planning aren’t taught enough in schools but I also feel you can get a good education in these topics without taking a class.

Just go to your local library and check out any 5 books on “Getting Your Finances In Order”. Read all five. Then, write a list of what you want to accomplish financially and develop a plan for those goals based on all five books. The odds are you aren’t going to want to slavishly follow someone else’s plan here. Most people’s “financial problems” are actually combinations of smaller problems like personal debt, bad investing habits, no savings or lack of goals. So your recovery plan should focus on the problems you actually have not what some book says to do. For example, it’s pointless to start saving for a house when your credit rating is terrible due to personal debt.

To me, financial planning is common sense and good planning tempered with a bit of knowledge. High schools would do much better to encourage long-term planning skills and the ability to self-teach. Both of these are critical towards successful financial planning. The financial world is very fluid so without the ability to not just make plans but adapt them to changing circumstances is critical for long-term success. If educators simply must to be more specific, perhaps high schools should focus on basic market principles? Don’t most schools teach economics? We were required to take a minimum of one semester which covered markets, running a small business and generating goods/services that customers are willing to pay for. Granted this was an AP Economics class but the non-AP students were still required to take an economics class that covered the same topics, just not as much of the theory of market capitalism. Was my experience really so outside of the mainstream?