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"Rich or poor, it's good to have money."
- Sid Lance
…..Ain't that the truth.
With gas and food prices being the way they are, there are more people with less money in their pockets. And for those of us in our 20s and 30s, it's especially harder financially.
Between incurring an average of $17,600 in student loans upon graduation, according to 2004 Center for Economic and Policy Research study, and having an average of $2,327 in credit card debt, according to a 2001 Nellie Mae study, no wonder we can't make ends meet. We have almost $20,000 in debt and that's only from two creditors; we haven't talked rent payments, car payments, utilities, etc…..
So where does that leave us?
This question was so profound that PBS did a special on it in February 2007 titled Generation Next: Speak Up, Be Heard.
And Tamara Draut, director of The Economic Opportunity Program at Demos, a non profit in New York, wrote a book titled Strapped: Why America's 20 - and 30 - Somethings Can't Get Ahead.
One thing that many young people have in common is relying on "high interest trust funds" – a.k.a. credit cards - rather than asking their family for help.
"People know that their family is strapped," Draut said. "Their parents are in the same situation. They also think, ‘They (parents) have done enough for me'."
But by then they wait until the situation is dire and then end up moving back home becoming a ‘Boomerang Kid'.
Draut said they are stereotyped. "They are looked upon as freeloading kids who won't grow up. (But it's an) economical smart thing to do."
In fact, according to MonsterTrak, 48 percent of 2006 graduates planned on moving back home because of financial situations. Draut recommends that young people live with parents in an area where they can get a good job.
But getting a good job is not the only thing that young adults have to worry about. We also have to contend with our future finances – retirement. Many in this generation wouldn't pass the phone list test. Most of the people listed on an employer's phone list will not be there in two years. With so much job hopping it's no wonder we don't - won't or can't - save.
Draut recommends that we put something in 401k with the employer especially of they match your contributions. "Don't give away free money," she said. In fact, she thinks that there should be a national policy for portable retirement accounts. That means when you leave your job, your money will not remain with the former employer, or get rolled over to an IRA, but will go with you to you next job.
With so many young adults being a silent voting block, I asked Draut if there were any issues in this upcoming election that would get more young people to speak up to get more things done in their favor? Draut thinks the following three would.
Health Care
"People under the age of 30 are more likely to be uninsured," Draut said.
In fact, according to a 2005 U. S. Census Bureau Income, Poverty, and Health Insurance Coverage in the United States study, three million fewer Americans now receive health insurance coverage through their employers compared to five years ago.
And I believe it.
My monthly health insurance premium through my employer went from $25 a month to $33 (I'm single with no kids), while someone at my job who covered their entire family saw their monthly premium go from a little more than $500 to almost $565.
Cost of College
"Three fourths of high school grads (do) go on for a degree," said Draut.
In her book, Draut stated that a lot of college students are working more hours than ever before and are taking longer to complete their degrees because of dwindling grant aid and soaring tuition costs. And those that do finally get their degrees have their young adult lives stunted because they are spending valuable dollars from their paychecks to re pay student loans.
Tuition costs at the University of Memphis have increase every year since I've been here. For the 2007-2008 school year tuition rose 6 percent. This year, due to decrease in state funding, it is expected to increase 7 percent.
Work and Family
"(Most) children are being raised by parents under the age of 30. There's a lack of affordable child care," Draut said.
In fact, nationwide the average annual cost of child care for an infant is $4,542-$14,591. A 4-year-old is less expensive to care for with the nationwide average annual costs being $3,380-$10,787, according to a March 2008 study by Tennessee Child Care Resource & Referral Network.
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