Archive for August 10, 2012

How Recession Generation May Become Failure Generation in 20 Years

According to the economists, the recession ended three years ago, and the economy is recovering although it is the weakest recovery since World War II. I lost my job five years ago, and I had never been able to find a full time job since then. You can blame me for not trying hard enough. But being a mother of three children is already more than a full time job. I am lucky that my husband still has his job, with a smaller bonus check for the Christmas though. But we still cut our monthly expense about 20% to 30% compared to 5 years ago. With the inflatation, it feels like I have cut half of my shopping expenses. I have learned a tough but a valuable lesson in the past few years: I learned how to cut the water bill and electricity bill by half, I learned how to get Gap clothing with 30% off discount, I learned how to do the lawn by myself (or my husband, LOL!). Most importantly I started to teach my kids how to save money for their own future.

But when I was reading the article “Recession Generation Opts To Rent Not Buy Houses To Cars” from Bloomberg this morning, I felt shocked by the young man these days. They were called “Recession Generation”, because they will rent a car houly instead of renting by days, they will rent an apartment instead of buying a house, they rent high fashion instead of buying one, they rent furniture instead of buying them. They felt insecure about the future and they hesitated when they are about to make large purchases.

It won’t surprise me if these recession generatoin become failure generation after 20 years. Why? There is one thing missing from their mind: one should save or inveset money for the future! It is the ability to build wealth for the future.

Renting Is Not The Way To Save Money
Buying a car may seem too much for many students. But is renting a good idea? Absolutely not. Just think how the rental companies will make money from you. That is exactly how you lose money in long run. If you can’t afford the down payment, considering buy and share the car with your roomate or friend. What about renting furniture? Buy used ones from garage sales, and sell them when you move out, if lucky, you could make some money a few years later. Rent a dress or a bag? If you can’t afford buying it, don’t rent one either. It only wastes your money.

Invest For The Future
Most young people hesitated to buy a new house because they worried losing their job any time and the housing market isn’t stable enough. But are you going to rent an apartment forever? Are you going to live in fear forever? Buying a house will give more pressure for paying the mortgage. But that is the investment for the future. It is saving the money into a house, instead of paying the apartment and not getting anything back in future. You should start to invest for your future, weather it is a saving account, stock market, 401K, or 529 plan. And most importantly, start it today!