^^ Saving throughout your life will eventually make you wealthy through the power of compound interest, even without that lucky strike on the stock market or timing the real estate market.

Unfortunately that’s boring and requires discipline, which we are all told to throw aside in exchange for shiny consumer goods and an MTV Cribs lifestyle (even if we have to buy it on credit).

Highly recommend “Richest Man in Babylon”, “The Millionaire Next Door” and (with a huge pinch of salt) “Rich Dad Poor Dad”.

The quality of financial education in schools has always been poor – but the financial world hands out credit like candy to anyone who asks these days so the glaring problem is becoming more obvious.

50 years ago a high-school graduate could get married, have kids and still live a happy middle class lifestyle even if the mother stayed home. Credit was doled out by the bank manager who’d known your father and his father before that, and you’d be denied any loans that’d get you into serious trouble.

These days once you turn 18 it’s difficult not to get a credit card with thousands of dollars of ‘free’ money, up until recently you’d also have been able to get a gigantic mortgage on your McDonalds salary.

All with the same standard of financial education as 50 years ago.

No wonder everyone’s screwed.

Luckily financial education – like any other education – is there for those who seek it, plenty of great books on the subject (see above).

Have a great day everyone!

I get it. As a person still paying off debt from two masters degrees, I often wonder about how much more spiritually and intellectually satisfying OWNING MY OWN HOUSE would be all the time! :)

Good comments. Thank you so much!
Alli

You’re absolutely right on that the staggering costs of college have had an effect on how Gen Y relates to money. As a result, how we relate to money doesn’t actually make any sense, and we may even be able to account for the widespread idea that Gen Y has they they can suddenly become famous and someone will hand them boatloads of cash.

Think about it like this: The cost of college is so high that it is unaffordable for most families – so high that Harvard and many other Ivy League Schools now don’t charge anything for families making under $120,000.

The cost of college is so high that even if a student were to get a job as a freshman in high school and work full-time in retail outside of school…. they would still not be able to afford it.

What’s worse is that the solution for college being so costly is not to bring costs down – it is to focus on large scholarships and making a guaranteed loan to every student that wants to be in school. By studying hard, getting straight A’s, and holding ledership positions in school clubs, students can now make more money for college than by getting a job. Free money.

On top of this, there’s a phenonmenal amount of inflation on everyday items like food and gas. The housing market is on its way down, but is still out of reach for young adults who may be carrying $50,000 in college debt. We are being told NOW that Social Security is going down the drain and will never be available to us, so we aren’t planning on a future in which we get to retire, and we don’t have health insurance, so if we get medical bills, we’re going to have to declare bankruptcy anyway, so no point in saving.

I’m just stating this to point out what’s precipitating the lack of saving by Gen Y: there’s no protection for middle-class saving, no incentive to save because it seems like there’s no way to get ahead, and if you save it will only be used against you (in terms of calculating college assistance for your children or similar assistance programs), or be taken away from you.

A book would be great – but what would the book really include other than “Don’t spend what you don’t have”? I don’t know. It’s possible that there’s some great advice out there that’s just not getting through.

What I’d really love to see is a book about WHY we aren’t saving, and why that’s a bad thing for America; something to get some national attention and maybe kickstart some policy changes.

Also, It makes a lot of sense to me that savings, investing, and tax prep WOULD be taught in school outside of business electives. These life skills are every bit as necessary as the other high school essentials. No knock on math, but I’d use investing principals a whole lot more often then I have the quadratic equation.