Money in the Middle

Sandwich Generation Talking About Money Up, Down and Across Generations

Economy hits Gen Y harder than Baby Boomers

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There is a lot of talk about how the current economy is hurting baby boomers and older generations.  And it is.  But, the younger generation is being hit hard too – maybe even harder– because they have had no time to build up a financial safety net.

 

A new study from MetLife says that more than 50% of Gen Y employees (ages 21-32) are living paycheck to paycheck. About 73% are very concerned about having enough money to make ends meet compared to 56% of Generation X employees and 62% of baby boomers.

 

And, they often don’t understand or take advantage of benefits they have available through work.  When I think back to my first jobs, I can’t remember ever thinking about retirement plans (of course there weren’t 401 k’s then) and only vaguely aware of other benefits offered.  While there is more awareness these days of the importance of benefits like health insurance and retirement, this is also a time when people feel invulnerable to what “could” happen.

 

Yet, the research also found that almost half (49%) of the Gen Y surveyed employees were married and 46% had children.  So the gaps in their financial safety net are now more critical…and you can begin to see how their financial problems flow to older family members.

 

So maybe it’s time for baby boomer generation to stop complaining about their fate and the mistakes they have made and help the younger generation take steps now to avoid future problems.

 

It is a good opportunity for employers too to educate younger employees about benefits and basics of financial planning.  If you’ve got a GenYer in your household, offer them some guidance on taking advantage of benefits with their employer, including savings and insurance coverage.  It might be that some of those dollars spent on Internet and mobile phone plans need to be diverted to shore up family finances. They may not even know what they need in insurance coverage.  It’s an opportunity to stop the cycle and get smarter about personal finances. 

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Written by Laura Rossman

April 28, 2009 at 3:16 pm

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