Will Gen Y be made up of savvy consumers with an aggressive financial edge, or will they be scared away from the market by the reality of unemployment and stock market dives?
The answer differs depending upon whom you ask. A recent survey by online brokerage firm Scottrade suggests those between the ages of 15-32 will come out of the recession more likely to invest in the stock market, unafraid of financial institutions and fixed on gaining wealth.
However, others have argued that 20-somethings could be permanently damaged by what they’ve seen unfold before them: Their parents have lost jobs and homes; they’ve been unable to find jobs coming out of college; and the quick-trigger spending made easy by credit has reversed field.
“Many times, they could be the first let go from their jobs,” said Clarky Davis, also known as the Debt Diva, during a recent media tour through Atlanta. “They are not finding jobs, and they have to be more conservative or frugal than they are used to.”
Still, they have faith in their own ability to rise above the recession and be financially stable, according to the survey. Seasoned adults have lost more, and don’t get as much joy from investing, said Scottrade chief marketing officer, Chris Moloney. One in three of those Gen Y consumers surveyed said they invest because it’s fun, an increase from about one in four last year.
“Older generations see investing as more of an obligation or necessity, but Gen Y truly finds it fun,” Moloney told U.S. News and World Report.
One significant advantage young consumers have over older ones are that 20-somethings have grown up with access to unlimited research to help better inform their buying and investing decisions. As a result, they may feel more empowered than their parents and grandparents.
The skepticism carried by Gen X consumers is balanced in Gen Y by the notion of having options, and the freedom to choose them. Davis said she hopes it’s not false confidence, and they lean on their parents’ current experiences.
“Let’s hope they stick to those same habits they see their parents practicing now,” Davis said. “Budgeting, spending wisely, pulling back on using credit cards.”
Do you think Gen Y consumers will be more financially prudent than their parents and grandparents? What financial mistakes did you make as a 20-something consumer that you’d advise against now?
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