Gen Y and their money

We are all quick to stereotype people into Baby Boomers, Gen X, Gen Y and although this can make things easier to give our listeners and readers an idea of the age group we are talking about, when it comes to money I don't think it does that great a job.

Some of my Gen X clients will talk to me about their younger siblings and how although they are just on the X side of Gen Y, they have a very different view towards their money.

How to manage your money is something you learn from many different sources in life including your parents, your grandparents, mentors and what's happening in the world around you. You may pick up money tips from one, investing tips from another and debt management tools from a third. They all have something to teach you when it comes to managing your money and it's up to you which ones you decide to implement in your life.

So how is it that Gen X and Y siblings relatively close in age can have such different views on how to manage their money? I start by asking my clients the question, how old were you when we had the recession we had to have in the early 90's? How old was your sibling during those years?

And the answer to those two questions usually provides the answer to their differing money management styles.
Siblings that were aged 12 and above during the early 90's tend to find they were more exposed by their parents to what was happening with the family finances, they understood more about the difficulties their parents were facing and were more involved in discussions about what steps the family needed to take to pull through the tough times.

The younger siblings were often slightly more protected from these family discussions, not because they wouldn't understand but because the family wanted to protect them from what was happening, it was done out of love.

When we explore this further my clients often agree that yes they can remember discussions with their parents during those years about the family finances and yes their younger siblings weren't present for the money talks.

So why does missing out on these family discussions have an impact on their money habits now? Because by the time their younger siblings were hitting their influential early teen's, things were looking up and Mum and Dad were starting to spend more freely while the going was good. While older siblings remember the tough times and what it was like to stick to a tight budget, their younger siblings remember fondly the fun times when money flowed more freely.

For many in Gen Y these last couple of years have been the first economicly tough times they have experienced and for many it has been a crash course in learning how to manage their money.

Economic times can have a significant impact on how you handle your money. If like me you are lucky enough to have an octogenarian in your family, talk to them about money.

Octogenarian's don't believe in credit cards or eftpos, it's cash all the way and you don't buy anything until you have the cash to pay for it upfront. This is because many of them were growing up in the depression and post depression years when cash was the only option available. This also explains why they and their children can be very thrifty with their cash, because they had to be when they were your age and that's the money habits they passed on.

So next time you are wondering why your younger siblings have such different money management styles, remember back to what was happening in the world when you were teens and see if that can answer your question.

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