Thursday, February 5, 2009
Reality Check: No More Credit
First off; I hope you got the pun about the reality "check"...as in the method of payment and the act of recognizing reality. Seriously. I love puns. Maybe Josh and I can create a "Top 10 Puns on Echodemic" list since people like lists so much. I'm going to say that's at least in the top three.
The great thing about the recession is people realize they cannot live outside their means. We can no longer outspend our paycheck, use stated income loan applications, and ignore savings as part of our budget. Unfortunately, the recession is a lot like puberty; good for us in the long run (thank goodness I filled out since high school), but horribly painful as we deal with pimples, realizing women are attractive, and high school dances. Yes, Josh is white; yes, he can dance better than me. Odd.
As a general rule, Gen Y have rarely heard or applied the concept of savings to their lifestyles. More importantly, if we've heard it, we rarely apply it. Saving money is somewhere below an iPhone, far below not living with your parents, definitely below an education in English at a private university (great career path there), and probably below Friday night's bar tab at the newest club in town.
However, this recession is the puberty of Gen Y. Nobody likes to talk savings. Everybody likes their iPhone, private university education, new clothes every week, and financial indifference to the credit cards, interest rates, and latest American Apparel sale items (I hear the neon green leg warmers are the next big thing). Too bad for us, reality arrived in September. Kids who never worked before are now taking part-time jobs to help pay for school. Parents aren't handing out the money that grew on the lending tree; they're tightening their budgets too. We're now realizing that a glamorous lifestyle isn't automatic, money does get tight, and you can't live the dream without working for it (and paying for it) as well.
The question Gen Y faces is its response to this new era of financial responsibility. Will Gen Y correct the mistakes of its parents and live within its means? Or is our generation headed towards another time in history with overspending, easy credit, and unmanageable credit card debt? Although our generation feels the effect of this recession, I seriously doubt we will change our ways unless this recession becomes much worse. We cannot ignore our upbringings; we watched our parents give us everything. That will be a hard habit and reality to change.
As a generation used to having everything and working for practically nothing (many of us never held jobs before we graduated from college), we now need to face a new reality; cash or check. Credit's not accepted.