Personal Finance for Generation Y

Raised in a culture of immediacy and exposed to the high-paying jobs abroad and at call centers, Generation Y Filipinos want to earn more, earlier than ever. A McCann Erickson inter-generation survey called 20-something Filipinos “big spenders,” with a shopping list longer than other generations. So if you belong to this generation, how do you make sure you don’t end up with a fat salary and nothing much to show for it at the end of the day? Here are five things you can do:

1. Strike anywhere. You’re young, single, and fabulous. This is the best time in your career to try everything while you can. Unhampered by adult responsibilities, and burdened by a quarter-life crisis, Gen Yers rarely know what they want to do with their life. If this describes you, by all means, don’t allow yourself to get stuck at a job that sucks or that you settle for. Find work that combines your strengths and interests. Since it takes time and experimentation to figure this out, be open to trying different jobs and working at different industries. If you have an opportunity to work abroad, do it.

2. Use your credit card. Credit cards and free-wheeling 20-somethings are a lethal combination, but if you don’t learn from your financial mistakes now, you’ll have a more difficult time later on. Charge (pun attended) your mistakes to experience, and just do what it takes to be more fiscally responsible. One critical money skill you need to learn now is how to manage debt. This is also a good time to build your credit history.

3. Delay marriage. What do you call a 20-something adult earning good money and partying like a college student? You! Culturally, it’s okay to live with your parents until you get married. And for most young people, they get married in their late 20s or early 30s. That’s actually a good thing. Not only do you save on a lot of bills, let’s face it, you’re not mature or responsible enough to raise your own family. That should save you and other people a lot of grief.

4. Rent, don’t buy. Some single, young professionals rush to buy their first condo unit or house and lot. Big mistake. You don’t really know where you’ll end up working once you have a family, and your future spouse may not like your new digs. Maybe if you buy rental property, it’s okay, but if you think buying your own place so you can finally move out of your parents’ house is a good idea, it’s not. You still don’t have a real sense of permanence, so just rent.

5. Forget investing, insuring, and retiring. Forget what you’ve read about investments, insurance, retirement, college expenses, estate planning, and other real grown-up stuff. Those are for Gen X (with their balding hairlines and growing family). At your age, you should be thinking more about saving for short- and medium term goals, like buying your first car or planning for your wedding, rather than investing for your children’s college education or your retirement 40 years from now.

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Category : Blog