Generation X is buckling under the pressure of doing the balancing act of managing families, friends, work and finances. For the first time Generation Y’s are facing the fear of losing their jobs, dealing with high credit card debit and looking at the prospect of moving back in with their Baby Boomer parents.
Even though it appears we are over the worst of the economic crisis, investors are still feeling the strain on the family finances. This sentiment has been validated in a recent research report conducted by St George Bank. Research reveals that Baby Boomers and their Generation Y children are under financial pressure and need help. According to the research results:
??Over 70% of Baby Boomers said the GFC has caused the value of their assets to erode
??75% of Baby Boomers are paying more attention to their personal finances compared to a year ago
?? For Baby Boomers with Generation Y adult children, nearly half are no longer willing or able to provide the same financial support and feel guilty when their adult children ask for help or support
??80% of parents of adult children wishes their children planned for their future better. They want their children to spend less on non?essential items, save more, be more financially independent and not to expect as much financial help
?? Key issues for Generation Y are that they don’t know how to budget or save. 24% have never had to budget and save and just 36% rated themselves as experienced at budgeting and saving
How to manage a budget – more money and less debt
For many families the answer lies in developing and maintaining a budget. Drawing up a budget will enable you to:
?? Establish a bottom line budget to determine your income, expenses and investments.
?? Reduce your spending and increase your savings.
?? Pay off debts quicker.
?? Work out the goals you want to achieve.
?? Knowing your bottom line helps you make better financial decisions.
It boils down to good financial planning. Sitting down together and working out the goals and needs of everyone and devising a plan that will ensure everyone meets their goals.
The aim of any good financial plan is to make both generations financially secure. For parents it means ensuring their finances are in order – debts are paid, wills and estate planning in place. For young adults it often means both generations working together to instil good financial habits – like debt management, saving and investing.
I guess I'm part of Generation Y, and I did have trouble with budgeting my money on my first year out in the workforce. Each time I got a paycheck, I got excited and thought about how I could spend it. And by the end of the year I wondered where all my money went.
Fortunately, I never used debt for any of my purchases and I have become a lot wiser since then, after educating myself financially by reading books such as 'Rich Dad, Poor Dad' by Robert Kiyosaki.
One thing I found that worked extremely well for me was the concept of 'paying myself first'. As soon as I received my paycheck, I would pay myself 30%, and then use the remainder of the funds to pay for rent, bills, living expense, leisure etc… It wasn't long before I managed to save $10,000 and had to think about what to do with the funds. It was tempting to use the money to buy a sports car, but I decided to delay my gratification and buy some shares in mining companies instead. What was exhilarating was the fact that the shares had appreciated to $15,000 the next month! At that time I thought 'Wow, this definitely beats leaving the money in the bank, where I would earn only $500 in interest per year'.
Thanks Kong.
Your real life example shows how even a little self-education like reading 'Rich Dad, Poor Dad" taught you enough fundamentals to pay yourself first and then delay that instant gratification for that even bigger 'high' of doing some good with your money that showed you how to have your money work harder for you and you just work smarter. I hope this encourages others to post their experiences so we all learn and benefit.KNOWLEDGE FOLKS, KNOWLEDGE! That is why we come to forums like these.
ALF1 wrote:For the first time Generation Y’s are facing the fear of losing their jobs, dealing with high credit card debit and looking at the prospect of moving back in with their Baby Boomer parents.
Haha, moving back with Baby Boomer parents? I've never actually moved out, except to qualify for the FHOG on a house. People sometimes make fun of me, call me 'mommy's boy' and what not. Ultimately it boils down to personal values. Parents who actually worked hard to bring up their kids are well worth hanging on to, and living close to.
Having a good relationship with parents is an important factor that allows a Gen Y person to get a financial headstart. The vast majority of my contemporaries are so busy trying to move out that they have no solid savings whatsoever.
Of course my parents also deserve much credit for getting me started in investing…I was about 15 years old back then. But from day one they didn't give me everything I wanted but held back and forced me to save up for life's little luxuries. These were simple things…a special pen, a 'collectible' eraser, a compass, a key chain. When I was young I thought my parents were being absolute tight ****** but that lesson is one of the most important I've learned in my entire life: that I had to work for the things I want.
Key point here is: don't be too quick to ditch your parents in favour of 'independence'!
Your real life example shows how even a little self-education like reading 'Rich Dad, Poor Dad" taught you enough fundamentals to pay yourself first and then delay that instant gratification for that even bigger 'high' of doing some good with your money that showed you how to have your money work harder for you and you just work smarter. I hope this encourages others to post their experiences so we all learn and benefit.
You must be logged in to reply to this topic. If you don't have an account, you can register here.
