An unfortunate member of the University of Pourtsmouth ‘Wall of Debt.’ Image courtesy of the University of Pourtsmouth.
“Oh, well, I don’t think anybody really matures. Adults are just children who owe money.” – Kevin Branagh, Peter’s Friends
For a line from a movie released in 1992, Branagh really hits the nail on the head when it comes to defining the economic climate of 2011. It’s no secret that we currently live in one of the most difficult job markets in history, with the most recent report putting the US at an unemployment rate of 9.2%. College grads in particular are feeling the sting of rejection, as most companies simply cannot afford to hire the latest class of freshly minted professionals-to-be. Try as they might, English and Business majors alike have thus been forced to move back home to live with dear old mom and dad.
Rather than not wanting to grow up, as moving back home would imply, the millennial generation as a whole does not seem prepared to grow up–financially, that is. It used to be that students would take on large amounts of debt to attend their first choice of university and consider that money an investment for their future. In return, they would expect that investment (a college degree) to translate to a full-time job after graduation. The job would ultimately provide the financial returns to pay back the loans and beyond, securing the investor’s future. Risky, but it was a system long accepted and proven…until recently, but you’ve most likely have seen this already.
So what’s a millennial in financial crisis to do? We at BTR thought to reach out to some recent grads for a comment, but they were too busy pulling their hair out and tweaking their online resumes for the umpteenth time. Instead, we talked to a few financial experts and real-life bloggers who had some experience in this whole business of growing up and out of debt.
Alexander Desuasido, a representative from The Kidira Foundation, tells BTR that the current generation’s money issues are part circumstance, part social behavior.
“Unfortunately financial priorities for most of this generation, unless explicitly taught to them, are far and few between. I believe that the majority of this generation is focused mainly on making money with the sole purpose of spending it, rather than managing it,” says Desuasido. “In addition to a recessionary economy, we combine that with this generation’s attitude towards instant gratification and consumerism and you end up with a generation who constantly buys what they can’t afford.”
Ben Woosley, a rep from CreditCards.com, agrees that the odds are stacked against millennials striving for financial independence.
“Everything is more expensive now – certainly education, cars, rent, insurance, clothes, food, etc. Upon employment, salaries should be higher too, though real income has been pretty stagnant for the past few generations according to studies I’ve seen.”
The “boomerang nation” of grown children moving back home, while not ideal, Woosley says it is one way to help grads who are in debt and out of a job. “Parental assistance, part time employment, living at home, etc.,” he lists, “can help make ends meet.”
For Siana and Tricia, long time friends and bloggers from 2girlsonabench.com, moving back home was not an option, even if they didn’t have a job. Upon graduation, they actually crashed in a motor home parked in a friend’s parent’s driveway before they eventually pooled their resources for a down payment on their first apartment.
When asked on how prepared they felt taking on financial responsibility, said Siana and Tricia:
“It didn’t seem that it was optional, we just did it. We are actually both pretty responsible gals, so although we weren’t necessarily prepared, we figured out how to do things as we went and for the most part didn’t fall behind on anything. We were too afraid of bill collectors, so we just paid them and found cheap ways to entertain ourselves. This helped feed our creative souls since our sustenance at that point consisted mostly of cheap pasta.”
Their fearless independence and phobia of bill collectors eventually paid off, and the two now have successful writing careers, among other achievements. Thus proving there is a light on the other side of the tunnel.
“We wrote and directed several plays and performance art shows in the late ‘90s and early 2000’s and then switched to screenwriting and short films. We both got married and helped plan each others weddings…We both have houses. We both have dogs. Tricia now has a kid. So yeah, a lot has changed. And we’re still friends and still make the same stupid jokes to each other. The only difference is that now we can enjoy more expensive pasta.”
What advice do our experts have for the Millennial generation?
“Start preparing for your financial tomorrow today,” says Alexander Desuasido. “Not ‘today’ as in ‘later this week’, ‘maybe next month’, or ‘sometime this year,’ but today as in ‘what’s the date today?’ That today. The sooner you start earning, saving [and] investing, the sooner you can start living.”
“Become financially literate,” says Ben Woosley. “This entails understanding how the details of financial world work: savings accounts, checking accounts, debit cards, credit cards, student loans, car loans, interest rates, credit scores, etc.”
“Pay your bills on time, because one day you will want a home, and good credit goes a long way!” advise Siana and Tricia.
So, are adults just children who owe money? Financially speaking, the ones who do their financial homework while still in school will find the transition into adulthood less like kicking and screaming and more like saving and reaping the benefits.
Written by: Mary Kate Polanin