Parenting and Cultural Trends Linked to Credit Problems

Who is Generation Y? It’s no secret that younger Americans have a penchant for spending that past generations have avoided. Is it greed, or have cultural values set us up to fail? According to the Department of Agriculture, parents spend over $40,000 more on each child compared to costs in 1960. While inflation is partially to blame, the shift in mainstream parenting and child “needs” are mostly responsible for the increase.

Parenting norms began to shift in the mid-to-late 1970’s. While their parents and grandparents were encouraged to play quietly, Generation Y kids were saddled with a new kind of attention span and list of basic needs. They “needed” constant interaction, play groups, music lessons, tutoring, art classes, dance classes, nature groups, better clothes, better toys, etc. to become well-rounded adults. What are the results of this shift? In general, Generation Y members are more likely to:

  • Become bored more easily, finding it necessary to fill their time with (sometimes costly) entertainment
  • Fail to grasp the fundamentals of budgeting, pushing them into credit card debt
  • Feel a sense of loss/anxiety when their monetary needs are not met immediately
  • Are more likely to justify overspending to lessen their immediate anxieties

While most studies focus on the financial burden of the parents, fewer focus on the psyche of the kids who were exposed to a lifestyle of arguable excess. A survey conducted by revealed that over 75 percent of renters ages 18-24 spend more than they earn each month. This staggering statistic is unsettling at best, leaving many people to wonder about the future stability of the U.S. economy.

If the qualities above sound familiar, there are ways to break unhealthy habits and gain a firm grasp on your adult life. Begin by:

1. Cutting your expenses by 25 percent (seriously).

Learning to live with less is a valuable skill, especially if you are spending to the limit. Take the first and most difficult step by cutting your expenses. Sit down and divide your costs into “needs” and “wants.” For example, you need to pay rent, but you don’t need to pay a $200 digital cable bill. You may need to drive to work, but you don’t need to drive a gas-guzzling car. You get the point. Stash that 25 percent in a savings account and get used to living with less. Eventually, you’ll learn to value frugality.

2. Identifying bad habits.

Childhood habits are the toughest to break, mostly because we don’t realize the damage they cause on a daily basis. Even a responsible, conscientious person is usually guilty of a few credit-busting crimes. Take stock of the things you do that may hurt your bank account. Do you waste electricity? Do you dine out more often than you should? The first step to changing yourself is identifying where your weaknesses lie. Make a plan to reduce bad habits and check your progress on a monthly basis. Even the smallest changes can lead to a better outlook.

3. Comparing priority lists with senior family members.

Still struggling? Expedite your credit repair efforts by seeking the wisdom of your parents or grandparents. Ask them about budgeting when they were your age. Ask about what they struggled with, what they did without, and how they saved money. Take notes and apply the broader points to your own life.

Childhood helps to shape our adult lives, but the habits you retain as an adult are your responsibility alone. Take the initiative to exceed your Generation X’s expectations by practicing responsible habits and focusing on credit repair. They invested in your future—why not show them some dividends?