Nothing, I think.
Or maybe a lot.
Actually, it’s hard to nail this down. That may be because the rest of us alleged grownups can’t seem to decide what is good or bad financial behavior.
For instance, debt is bad, right? It reduces financial freedom and makes people slaves to interest. It also makes it hard to adjust to difficult times or unexpected expenses. That ought to be a financial no-brainer.
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But on the other hand, spending is good, too. If people don’t keep buying things we don’t really need from retailers, how are we going to keep this great economy going? Remember after 9/11 when we were told to go shopping so we could show terrorists we weren’t afraid of them? We don’t want to go wobbly, do we?
I kid, of course, but only partly. Consumer spending does account for about two-thirds of the nation’s economy.
So how has this translated to young people?
Some recent surveys show Millennials — the people born in the last couple of decades of the 20th century — have problems with both debt and spending, but not in the ways you would think.
First, they tend to have a lot of debt. According to cnbc.com, people between 25 and 34 years of age have an average of $42,000 of it.
And yet, the same age group isn’t spending much. A Gallup poll released this month found young adults, those 18 to 29, spent an average of $74 per day in 2016, down from the $93 people in that same age group spent in 2008.
As Gallup put it, “Healthy consumer spending is key to sustaining the U.S. economy, and a slowdown among a key demographic group — one often coveted by advertisers — can hamper economic growth.”
Does that mean frugality really isn’t a virtue? I get the feeling if that’s what we’re selling, young people aren’t buying it, or much else.
It’s important to figure all this out because today’s young people are the only ones available to entrust with the future of our economy. And, to be frank, we of the older generations are handing down a mess.
Washington is spending with abandon, with the national debt now well past $21 trillion and the yearly budget deficit forecast to rise to more than $800 billion this year. Social Security and Medicare are heading toward insolvency, and politicians don’t seem the least bit concerned.
The sun is shining, jobs are plentiful and life seems good. It’s fun to splash and play in the placid waters that lie just ahead of Niagara Falls.
Our personal habits aren’t much better. Earlier this year, the nation’s aggregate outstanding credit card debt topped $1 trillion for the first time since 2008.
So, is something the matter with kids today? Are we doomed?
Maybe we are doomed, but it isn’t because of young people.
I prefer to be optimistic, and with good reason.
First of all, despite their debt (loans for homes and cars can add up quickly), a lot of signs point to Millennials being more frugal than folks my age.
Surveys point to their reluctance to use credit cards for frivolous things. A bankrate.com survey two years ago found only 33 percent of people aged 18 to 29 even owned a credit card.
Meanwhile, lendedu.com last year found 52.4 percent of Millennials who have cards pay their balances in full each month, and 69.4 percent said they do not use their cards for basic living expenses.
Most importantly, bankrate.com recently found that Americans are beginning to save more for retirement, and the trend is led by young people aged 28 to 37.
Sure, there are reasons to be worried. The rising generation isn’t marrying and starting families. Many of them are having trouble launching. Gallup notes many have moved back with family, or never left. And the nation’s over-spending eventually could result in disaster for all age groups.
But, while Millennials weren’t exactly raised in the Depression, the great recession seems to have left an impression.
Bankrate.com quoted a young woman who said, “We don’t want to make the same mistakes our parents made in the past. We want to do things smarter and safer.”
That alone is reason for hope.