I’m not the wisest about spending money, especially when it comes to things like clothes, shoes and accessories. I’m guilty of buying items for the life I wish I were living, instead of for the life I’m actually living. For example, I recently bought this big, floppy, black and white sun hat and envisioned myself wearing it as I strolled along the beach every weekend in Malibu. And guess what–my feet haven’t touched the sand once this year.
I’m not as bad a spender as some of my fellow Gen Y-ers are. Some have to be seen in a luxury car, even if it means a monthly payment of $500 and premium gas. Some insist on going out to trendy restaurants and bars so as not to miss out on their local social scenes when staying home with a home cooked meal and a bottle of wine would have been much cheaper.
Gen Y’s willingness to splurge comes in spite of their obvious financial troubles. In an age of inflating education costs, stiff competition for entry-level jobs, measly starting salaries and sky-high rents, Gen Y faces far more money-related challenges than their baby boomer parents did.
Yet, they’re not willing to give up their lifestyles in favor of saving carefully for their futures. Many Gen Y members are living in the moment. They’re residing in the coolest, trendiest neighborhoods, even if the expensive rent means living paycheck to paycheck. They’re spending lavish weekends in Vegas (and making sure to document their good times on Facebook). They’re putting off marriage and kids because they can barely afford themselves. They believe they have plenty of time to settle down and pull it together.
What can credit unions do with Gen Y’s irresponsible predicament (which, of course, does not apply to all of Gen Y)? Focus on educational tools that will resonate with them. For example, I recently interviewed Summit Credit Union, the $1.7 billion credit union based in Madison, Wis., which rolled out a new website with interactive features, including informative financial management articles. Young adults enjoy going online to gather advice they can apply to their own lives, so implementing easy-to-read, educational Web content can be a good place to start.
Leveraging their smartphone addictions can be another way to talk some financial sense into Gen Y. Mobile budgeting functionality, educational quiz apps and shopping comparison tools put financial management onto the devices with which Gen Y spends the most time.
Spending money on things we want but don’t need can be a satisfying vice, and like any vice, it should be practiced in moderation. But credit unions can help give those out-of-control Gen Y spenders a reality check by reminding them of the importance of financial goal-setting, retirement planning and homeownership–all those things they avoid thoughts of during their whirlwind youths.