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Is Gen Y Facing Debt Issues Because of Government Financial Rewards?

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By: Celina
on 4th Mar,2014

But in any case, like all population groups, the generation Y is also marked by various characteristics.
Is Gen Y Facing Debt Issues Because of Government Financial Rewards?

The Generation Y

The Gen Y is a term used to describe the population group in the US born in the period 1976-2000. Being children of the baby boomers, they are also called “echo boomers”, although most of the Gen Y comes from the late 80s, which possibly makes them grandchildren of the 60s baby boomers. Gen Y is also known as the “Internet Generation”.

Who Exactly Falls In the Generation Y?
Sometimes it is difficult to accurately define the generation Y as it extends over 2 generations, and there is no official beginning or end term of this population group. But in any case, like all population groups, the generation Y is also marked by various characteristics.

For instance, people in this age group were the first to use the internet, along with inventions like mobile phones and electronic organizers. On the other hand, negative aspects such as drug and alcohol abuse, and childhood obesity are also associated with generation Y.  

Gen Y and Debts

For the reasons listed above and also being the generation to witness the popularity of cable networks, Gen Y group is targeted by advertisers as their largest consumer base, which also means that this group has a significant impact on national spending patterns.

Even film production houses with their PG-13 rating try to attract the Gen Y audience!
However, people born in this time period are also finding themselves at the receiving end of high living costs, social pressures, and a lack of financial discipline. All these factors result in an increasing debt spiral.

Also, there arises a conflict between the Gen X and Y over jobs. This can happen when Gen X does adhere to the retirement age of 65.

The credit card is seen as a significant contributor to this worsening debt problem as many young people over time have been involved in heavy use of these cards to maintain a certain standard of living. Since unemployment is higher in the 18-24 age group, the young adults of America resort to credit in order to get what they would otherwise miss out.

Many a times, incurring debt is not seen as something negative by these young adults, because they can get valuable things, college education being top of the list. However, as they progress in their age, the reality of debt results in further economic problems and even stress and depression.

Government Spending

The debt crisis often spawns discussion that who is to blame. Banks are criticized for offering more credit to consumers than they can manage. Consumers themselves
are termed as the biggest culprits due to their reckless spending habits.

However, it is time that the government also takes some criticism for worsening the debt situation in America. With policies that take from responsible savers and give to irresponsible consumers, the government has not set a good example for the generation Y to emulate.

Financial rewards have their merits, but it is also true that this government system has been hugely taken advantage of. This generation has grown lazy as the government takes off the need of employment. In fact, many experts are of the opinion that spending on financial rewards should be cut down and instead the government should spend more on education and training human capital, making this and coming generations better workers.
To sum up, if you can manage your consumption by financial rewards and debt, why work to resolve the situation?

What is the Solution?

Federal financial rewards have a lot of legitimate beneficiaries, so policy making in this sphere may not be becoming a reality. What can be done on the other hand is to train the Gen Y to be more financially responsible.

Personal finance management is a subject that is neither discussed at home, nor taught at schools, and we are reaping the results. So, authorities should now take up this issue seriously and implement money management courses in the education system of the country.



For those who are already stuck in debt cycle, debt consolidation programs must be sought. 


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