I was walking down the street the other day when I passed by a bunch of newspaper vending machines and one particular headline caught my eye. “Affluent Gen Xers, Ys spurn lavish life,” the headline read. Fascinating, I thought. I wasn’t aware that there was any tendency toward tightwaddery in my generation. I felt like reading the article but instead of plunking my quarters into the machine I remembered the headline and continued on home and pulled up the article online, saving myself 50 cents or whatever the paper cost.

Anyway. The article points toward an encouraging trend among people in their 20s and 30s - a trend away from consumerism and conspicuous consumption, a trend toward environmental consciousness and financial stability. The article refers to these individuals as “yawn”s - that is, young and wealthy but normal. These are basically filthy rich young adults who choose to live frugally. They could live any way they want to but they recognize the power of their wealth and choose to use it for stuff more enriching than displaying their richness.

Well, that sounds alright.

Then I happened across this MSN.com article which aims to explain “Why Generation Y is broke.” (”Is it because we’re dumb, arrogant, or simply uneducated?”) The article cites some pretty depressing statistics which are intended to prove that Generation Y is deep in debt and doesn’t know jack about personal finance. It’s getting deeper in dept. These young adults are too engrossed in MySpace and AIM to care about compound interest and all that.

First of all, I think it’s interesting that the media can paint these two incredibly different pictures of the same group of young adults, and it’s interesting that different talking heads can talk in totally different ways about the same thing. I’ve gotta question - which trend is legitimate? Or are they both legitimate? Are some people working themselves deep into dept while others are a million miles away from that madness? Is this generation really screwed?

What do you think?

I’ll share with you what I think. I think that on the whole Americans of any generation don’t know much about personal finance. Maybe the current crop of young adults is particularly bad - I’m not really sure. There are always going to be a few people who “get it,” and there’ll be others who flounder around and get themselves into big nasty messes.

But I don’t think my generation is in trouble just because it’s engrossed in Web 2.0. I think this generation has a greater power to sort through and pass judgment on a greater amount of information than any generation ever before. We’ve been dealing with it since birth - all the advertising, the electronic media, the whatnot.

If this generation had been taught to pay attention to personal finance - to understand the rules of money - we’d master it the same way we’ve mastered the intricacies of Facebook. But nobody ever taught us the value of living cheap. Nobody ever taught us about the power of compound interest. Big surprise that so many people don’t understand how to play the game, or even in some cases that the game exists.

We’ve got to have teachers in schools teaching their students about all of this. Why isn’t this happening? One reason is probably that the teachers don’t understand personal finance. They’re in debt themselves. Look at the statistics: Americans across all age groups are overspending!

I’m hopeful about the ability of this generation to understand personal finance if given the chance to learn. People need to start reading their credit card terms. People need to understand what they’re doing when they apply for mortgages. The world is getting more complex by the minute, and this generation has demonstrated that it has the ability to deal with complexity. That’s why I think we’ll be okay if we can manage to educate ourselves, since the American education system hasn’t done much to teach us about money.

Come to think of, motivation may be what this generation really lacks. If something isn’t handed to us, we won’t reach out for it. We won’t read personal finance books unless forced to. We have short attention spans. This is a trait that has to be overcome. Once it is, Generation Y will be very well off - in terms of economics and in terms of other kinds of richness that are much more important than that.

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