One topic that I like to touch upon more often than most is money, it is certainly a more popular topic in general these days. People spend so much time worrying about it, earning it, spending it, and least of all, unfortunately as this blog will get into, saving it. As I mature and become more developed as a sourcing professional I have discovered a much more heightened sense of costs, budgets, and the direction of our economy. That is particularly why I find studies like the one referred to from CNNMoney regarding the wealth gap between the older and younger generations. This article indicates that the 65 and older generation of today, as noted in 2009, has wedged a gap of up to 47% greater in wealth than the 35 and younger generation.
So why is this happening? There are several theories, one at the heart of them is obviously the economy. The younger generations are still pursuing these $40K a year educations in our finest educational institutions to emerge four or more years later hundreds of thousands in debt with fewer opportunities than ever before to not only overcome that debt but to even build a career. Another theory is around the housing market, in the past you could buy a home at one price and see a considerable increase the equitability of it through renovations or emerging markets in the area. Nowadays you buy a home and are lucky if you can make back what you paid for it in a 10 year period let along any renovations or improvements you have made. More and more people are getting trapped and the “buy it and flip it” scenario is certainly one of the past, come and gone as a not so quick money maker. Of course home equity is only something you have to worry about if you can afford to purchase a home. As stated in the article, young adults are living at home longer and putting off careers, marriage and other key milestones. Think back to 25 years ago and it was 18 and out the door, now you’re lucky if the kiddies are gone before they hit 25, the cost of living has just increased so much.
Most of all I think this gap has a lot to do with the “live for today” spending attitude that the younger generation has. We rely so much on credit cards and living paycheck to paycheck that we just don’t have the capability or know-how to properly save. Maybe we need to spend a little more time with the older generation and sop up some wisdom and tips on financial savvy! Regardless of how it is done, we need to start thinking more about our long-term futures and less about this weekend.