March 10, 2010

Gen-Y is going to save the world.

Nice to see you again. Follow me, @SydneyOwen. Thanks for being here!

Apparently we’re in a recession. Apparently we should all be saving money. Apparently ::dramatic pause:: Gen-Y is going to save the world.

Okay, so maybe not save the world in a Superman kind of way – but according to a recent article by MediaPost – “Gen-Y is going to spend us into recovery.”

Talk about pressure.

Among Gen Y consumers, between 18 and 27 for this report, just 25% say the economy has significantly changed their shopping behavior. Among Gen X, it’s 36%, and among Boomers, 37%.

That’s a considerable difference, isn’t it?

So the article goes on to talk about how median household incomes of Boomers have dropped dramatically from 2004 to 2009, how Gen-Y likes to spend, spend, spend and how our more affluent predecessors, Gen-X, are to an extent, in the same boat.

I think this article is right about how Gen-Y is spending. At least, it totally applies to me, if I were representative of our entire generation. Except, I don’t think I (or any single generation’s spending habits) can save the world. So there’s that.

Here’s the thing about Gen-Y (again, let’s pretend that I am the norm for the sake of this post) – financially, most of us don’t have a lot to work with, but we’re really good at working with what we do have. The article mentions that Gen-Y spends very differently. We are still “trading down” but we are definitely seeking out new ways to find bargains.

For example, I have a very strict budget that I stick to and I operate at the bare minimum on a lot of things so I can have my fun money. When I first moved to Chicago, I could get a week’s worth of groceries for under $20. Coincidentally, I was involuntarily vegetarian, because eating fresh produce and tofu was way cheaper than buying chicken or seafood or other types of protein. But yeah, $20 for a week’s worth of groceries. Amazing. Especially in a city like Chicago.

I ::gasp:: don’t have cable or internet at my apartment. I don’t need it because I’m never home. Seriously. I know. Let that register for a second.

But, because I don’t pay $60-$100 or whatever normal people pay for cable/internet – I can go out to eat more. Or go shopping. After all, I can tweet and Facebook and blog from my phone.

So, what do you think? I know diddly squat about economics or what is going to save this country from the recession – so take my two cents with a grain of salt.

Do you think it’s possible for Gen-Y’s spending habits to send the country into recovery? Is this article spot-on or totally off?

If you’re Gen-Y – are you spending? Saving? Do you make sacrifices so you can have fun money? What are your must-have items?

  • roriharrington
    If Gen-Y does spend so much that they "save us" from this recession, I think they'll be in some serious debt. And I worry such behavior would only lead to more trouble ahead.

    That said, I know what you mean about selective budgeting. I make sacrifices in the same way - giving up this or that so my husband and I can take a couple small trips a year.

    Cutting down on meat definitely makes a difference. When I was in college I would go months without any meat at all. But I was still able to shop and eat at restaurants with friends. My parents on the other hand have an all-or-nothing approach to budgeting. If they are worried (as they are now) about the economy, they stop all unnecessary spending.
  • The economy hasn't really pushed me in one direction or another. I think it's more of the age that I'm reaching in life, I feel that I need to start investing towards my future. I'm not really concerned with making sacrifices for fun money as much as I am in making sacrifices for future family and eventual retirement.

    Just bought 2 books last night on the topic: "I Will Teach You To Be Rich" by Ramit Sethi and "The Total Money Makeover" by Dave Ramsey

    I think I only have one must-have item and that's the internet (I'm a web consultant by trade).
  • I am definitely not spending. I am unemployed so of course not. But I think through my young mistakes of trying to buy designer clothes and shoes and all that thanks to my Colombian culture, I stop living that lifestyle. I would rather have a plain white-t and a pair of jeans and some boots and have money to pay for my living expenses everything else to help the third world countries. Yes of course you need some balance so obviously 20 bucks a week for a dinner or a movies is something nice to have.
  • I agree! Gen Y by ourselves can't "save the world." Sure, we spend, but we're incredibly thrifty. We have to be. We don't have much to work with!

    Like your situation, it's all a balance game. I try saving a ton of money on my energy bills by keeping my apartment at 78-80 in the summer and 62 in the winter IF I have to turn on the heat (yay Florida). I don't buy anything at full price - designer discount stores and thrift shops are my friends. I monitor my spending on food and other things I can control. I'm not taking a lot of vacations. I put money into my savings account (I consider this "spending" but the economy wouldn't).

    I do spend, and I enjoy spending. But, I'm not getting myself into debt because of it. If the economy is relying on me to spend to get us out of it, well, let's just say, I wouldn't bet on it.
  • $20 for a week of groceries in Chicago?? That is impressive... Chicago grocery shopping has been a serious challenge; it's hard to spend less than $100/week on food for my husband and me. And we do not eat that much... I like a lot of fresh produce but it seems to add up.

    In terms of other spending habits, we also do not have cable, or smart phones, and we don't go out and spend extravagantly at bars/restaurants. I'm very thrifty about clothing purchases as well and generally only buy items on sale. I think we're unusual in the amount we save... talking to a friend last week, she was surprised at how much we put into investments. Our financial goals focus around cutting down student loans, having a savings stash of 6 months expenses (done as of last year), and maxing out our IRA contributions (we're really close to this one). We do these things before our fun purchases, but we've been able to manage our money to allow for fun stuff like nice vacations and furniture for our condo. And on the occasional shopping spree for clothes etc, I like to tell my husband that I'm just doing my part to help the economy :)
  • Cheap produce = Stanley's Fruits and Vegetables on North Ave. Right around the corner from the mammoth Lincoln Park Whole Foods. Check it out. That's where I get all my produce - wicked, wicked cheap.
  • kmskala
    I'm biased because A) most of my career has been in the financial industry and B) I'm incredibly cheap..err, thrifty.

    If saving the world means spending on retail and entertainment, then yes, Gen-Y will save the world. Not to get technical here, but the vast majority of people expect the economy to return to where it once was - what we're familiar with. In truth, it'll never return to that and the new "normal" is something Gen-Y hasn't seen.

    Gen-Y is definitely spending on, as mentioned above, retail and entertainment. That's important as these businesses drive a significant portion of the economy. But again, no one is saving anything.

    As I mentioned earlier, I come from the financial space and I'm cheap...err resourceful. So I'm saving, saving, saving. I'd rather work my butt off now, save my money and have fun later. I don't want to work when I'm 65, I don't want to work after 55. So for me, I'd rather sacrifice some fun now, so I can have fun later. But that's me and I'm probably in the minority here.
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