Buy Now, Pay Later - Generation Ys Budget Deficit

Americans pre-teens, teens and young adults are being inducted into the Buy Now, Pay Later culture of their parents. With current economic conditions keeping American salaries down and debt at record highs, Generation Y is facing even bigger budget deficits. CreditGUARD of America, a non-profit credit counseling agency, explains how youth marketers target our children and how parents can help reduce Generation Ys Budget Deficit.

(PRWEB) April 26, 2004 -- Research from Harris Interactive estimates that Americas youth, Generation Y, has a total $175.1 billion dollar per year spending power in todays economy. Based on a June 2003 study that interviewed over 3,500 pre-teens, teens and young adults with their parents, Harris Interactive breaks down Generation Ys spending habits into three categories:

* Pre-Teens (ages 8 --12) spend $19.1 billion dollars/year, which 87% is parent-supplied.

* Teens (ages 13 -- 19) spend $94.7 billion dollars/year, which 37% is parent-supplied.

* Young Adults (ages 20 -- 21) spend $61.3 billion dollars/year, which 7% is parent-supplied.

Which means that Generation Ys parents are spending $55.9 billion dollar per year to cover their childrens spending habits.

How are marketers influencing Generation Ys spending habits?

Savvy marketers have noticed Generation Ys spending trends and are investing more than ever to target Americas youth. In April 2004 Issue of Trends & Tudes, Harris Interactive publishes a poll of youth marketers that shows:

* Youth marketers begin pre-teen selling at 7 years old.

* Pre-teens under 9 years of age are considered to be unable to distinguish between fiction and reality.

* Pre-teens are considered active consumers at 11 years old.

So marketers are targeting Americans youth before theyre capable of distinguishing the truth of the messages and inundating them into the Buy Now, Pay Later" culture of their parents. With current economic conditions keeping American salaries down and debt at record highs, Generation Y is facing even bigger budget deficits.

How can we as parents help Generation Y avoid this budget deficit?

Lead by Example

Pre-teens learn their spending habits from their parents, so lead by example. Practice money management and show your children the importance of following a personal budget. Help your kids understand the value of money and the consequences of spending by implementing an allowance. Above all, dont give in and buy your kids everything they ask for. By doing this, youre encouraging them to participate in the Buy Now, Pay Later" culture.

Overspending your personal budget will encourage kids to do the same. Take a moment to review your monthly bills. If you have more than $2,000 in unpaid debt (i.e. credit cards, store cards, etc.) and spend more than 5% of your monthly income towards credit card payments or are paying only the minimum payment, then you should consult with a non-profit credit counseling agency for help with your personal budget deficit.

Support Personal Financial Literacy

According to MSNs Money Central, one in three high school seniors (most of which are 18) have credit cards, half of which are in their own names. One in seven teens under the age of 18 have credit cards. There is an increasing trend for teens to get credit cards.

Jump$tart Coalition for Personal Financial Literacy finds these same teens are not well equipped for this responsibility and often fail in their first consumer credit experience. Recently, when 4,000 high school students were given a test on personal finances with questions about credit, insurance and taxes, 65% of these high school students failed the test.

Jump$tart Coalition for Personal Financial Literacy encourages schools to enhance their curriculum to insure K-12 students are taught basic personal financial management skills. As a parent, you can support personal financial literacy by demanding that your school institute money management classes.

April 2004 is Financial Literacy for Youth Month. Take the time to educate yourself and your kids on the importance of personal budgeting, finances and money management. Make sure that youre not contributing to Generation Ys Budget Deficit.

CreditGUARD of America is a partner with Jump$tart Coalition for Personal Financial Literacy (http://www.jumpstart.org) and supports personal financial literacy. Our non-profit credit counseling agency assists consumers through debt counseling and financial education. Please visit our web site at www.creditguard.org or call 1-800-867-0406 for a free consultation with a certified credit counselor.

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