Megan is a 40-something government employee in the Washington, DC area. She got interested in Personal Finance when she got out of college and realized that her paycheck wasn’t going to go as far as she had hoped. Since starting this blog, she has managed to buy a house and make a solid start on her retirement goals, and hopes to help others do the same. Here is her story:
In 2007, I was a gainfully employed 20-something with no debt but not a lot of knowledge about personal finance. It was a co-worker’s comment about Roth IRAs that sent me to the internet, searching for information. It was then that I realized that I really didn’t know a whole lot about personal finance and that my current financial situation was due a lot to inherent frugal tendencies, generous family members, a fear of debt, and good luck. While that was working for me, clearly I needed a better plan.
While I had no debt, I was also pretty much living paycheck to paycheck and not worrying about going over budget (I say this as if I had a real budget) because I had an emergency fund set aside to cover any overages.
Except that’s not what an emergency fund is for.
So I did a lot of research, read a lot of blogs, and decided that I needed a plan. I needed to budget. I needed to know what I was spending my money on. I needed to prepare for the future.
I decided to create a blog not only to make myself accountable to others but also to share the knowledge that I gained along the way. I’ve learned so much from my fellow bloggers, and I hope that my readers can find something useful in what I have to share as well.
Am writing an answer for tomorrow 🙂 On a different angle from yours.
This is so true. I agree with you that we’ve had it too easy (I’m 24). I also agree that a LOT of 20-somethings are in trouble with student loans because they abused them.
But I don’t think the lenders should get off the hook here. The student loan system is pretty screwed up. Private student loan companies are lending hundreds of thousands of dollars to kids who are barely 18 on the promise that they’ll be able to afford monthly payments that sometimes reach the thousands in 5 years. The problem is, a lot of students made those promises when the economy was growing, and now that it’s shrinking it’s a lot harder to meet them than expected. I didn’t borrow hundreds of thousands, but between my husband and me we have a good chunk of loan debt.
The problem with the kids who make these mistakes with private lenders is that the lenders have nothing to lose. Private lenders guaranteed to get paid, and they can charge whatever interest they want. I’m all for guaranteeing federal loans, but there are limits on what students can borrow and what interest rates they can be charged. The same isn’t true for private loans, and yet the lenders don’t have to take on any risk. If private lenders had to take risks to loan money to students, you better believe they’d no longer give them a blank check to borrow hundreds of thousands of dollars to spend on electronics and vacations.
Thanks for this great post! As you can see, it’s a topic I feel strongly about! 🙂
I am at the same point you are, on the cusp on both generations and I agree. One of the biggest issues we have to face that our parents generation didn’t is the overwhelming force of student loans. I also agree that having to struggle can help us, I only worry that if nothing is done about student loans, as a generation, Y could be in trouble.
Student loans are a hell of a thing. You start your life as an adult with a ton of debt and it take YEARS to get rid of it. Trust me, I know. student loans make up almost half of my total debt and it’s just crushing. Since I was amongst the first to attend college in my family I didn’t know better. I’m making sure that I educate my younger cousins about college loans though.
Well yes we certainly do not know what struggling really is.
Furthermore, we as a generation are more lazy, we are living at home longer and longer and its not for good reasons either. We are racking up debt and living of others.
I am 24 and taking responsibility now by paying for rent, utilities voluntarily to my parents.
Also, this is also partly to blame parents of today because they want their kids to have a better life but wheres the balance?
They put themselves in debt and struggle and give us everything or at least enough. Yet we don’t appreciate it, and don’t learn anything from it.
What’s really strange for me when I come across these articles is that I can’t relate to them at all, even though I’m considered gen Y. I wasn’t born with the proverbial silver spoon in my mouth. I always think these people sound whiny.
“life isn’t always easy and can’t be planned, but hard work and determination pay off in the end”
So true! I learned this lesson a long time ago. I’d have to add that life isn’t fair either!
“young people, people under twenty-five (she looked very pointedly at me, though I passed that mark years ago), don’t know what it means to struggle. They have been given everything they have ever wanted and they are weak because they don’t know what it’s like to have to fight to get what you want.”
I think I would have either punched this lady or walked out. Without the pointed look, it might have been tolerable, but what a rude thing to do! I may be gen Y, but I have fought tooth and nail for everything I have.
Sure, it kind of sucks to be graduating college right now, and things look a little grim, but in a few years, it will (once again) be a completely different world. Whining and complaining doesn’t change anything. The only thing you can do is work with what you have and go from there. Life never goes according to plan, so you might as well get used to it now.
(Also, what’s with all the complaining about student loans? Sure they suck, but you signed the papers.)
Did you find the tone about student loans odd in this article? I mean, sure, our generation is graduating with more in student loans, but unless you’re going to grad school/law school/etc., you’re not graduating with hundreds of thousands in loans. So, if you’re like the girl quoted in the story and you have $22,000 in student loans, I don’t think that’s an unreasonable amount to owe for school. She’s not able to pay it because of her location – DC, which has a much higher cost of living than other areas. Sometimes it irks me that people complain about debt they’re straddled with while they live in areas that are obviously too expensive. In Knoxville, $22,000 in student loans could be repaid in a year, and that’s on an administrative assistant’s salary.