From College to Cubicle

Dear Old People,

Why aren’t you living up to the stereotypes? Between the executives at JPMorgan Chase, the various budget and debt crises and last minute legislation around the world (Greece, Italy, Spain, the US, the list goes on), and people everywhere spending money for no reason and declaring bankruptcy to avoid paying for their massive purchases, my faith in the generations older than me is fading.

It seems like more and more stories of massive financial messes are appearing. Most of them center around three concepts: debt, risk, and budget. All three are things about which our opinions are supposed to, like wine, change with age.

What happened to the stereotype I (and most of my generation) have of people older than myself? I’m supposed to be making terrible choices and they’re supposed to tell me that it’s not responsible. They’re supposed to save their money to keep the white picket fence painted and the children (or grandchildren) happy and educated. They’re supposed to be risk adverse so they can retire and move to a cute little retirement community in Florida. They’re supposed to always support saving and once you’ve saved enough entering into low or in extreme circumstances medium risk investing. Ok a little bit sarcastic, but I think you probably get my point. Let me compare this to shoes.

I’m supposed to be the one buying impractical but stylish shoes. People with maybe 30 years on me are supposed to be buying practical shoes that, while focused on comfort, have elements of style. Retired people are supposed to be completely indifferent to the opinions of others and go for the comfortable shoes which help ease the pain of the years of wearing impractical shoes. 

This is similar to the lifestyle people typically lead at those ages. Young people are supposed to be able to make mistakes, but there’s always an older person to guide them. After a few years they’ll realize they need to be more careful and are no longer willing to endure the possibility of loss on that magnitude (or pain in the case of shoes), and eventually mentor a young risk-taker. Then people enter retirement age they’re supposed to be frugal in an attempt to live within their retirement means (though of course they champion responsibility since they know the generations younger than them must save enough to live on after retirement).

I know that stereotypes aren’t always good, but I believe these exist for a reason. Everything I’ve heard in school and the real world is that as you get older you become (rightfully so) more risk-adverse. You play it safe and ensure that you can survive any storm. Why isn’t this applying to company, government, and household decisions?

Governments everywhere are spending WAY more than they can afford. People are spending more than they make, and taking advantage of bankruptcy to forget the debt on those homes they never could afford or those clothing purchases on credit cards that were never payed off. Executives are taking on way more risk than they can handle and often entire companies are brought down by these decisions.

Meanwhile many young people are unemployed and eager to work, and those who have jobs are busy trying to pay off their student loans. Those who have jobs and even those who don’t are largely forced to be financially responsible because, well, student loans don’t disappear with bankruptcy.

Why is it that many young people are able to live within their means and pay back debt, while many in older generations, particularly those in power (governmental, financial, or even within a company) are not exactly serving as good role models?

Sincerely,

A young, employed, recent college grad living within her means while chipping away at her student loans

p.s. I acknowledge that my generation also has many learning from their elders and racking up debt with no payback plan in place. Luckily they’re not in power so they’re (largely) only hurting themselves and will (hopefully) learn from these mistakes.