A Frugal Generation

They're calling it the Recession Generation. It's also the generation previously known as Generation Y or the Millennials. But whatever you call these young people, chances are you know one of them or even have one in your family. They range in age from those who are still in elementary school to those in their early 20s.

And, according to research, anecdotes, and a little common sense, many of these young people are learning hard but valuable lessons from the financial mistakes and miscalculations of their elders. Many young Americans are bracing for a simpler lifestyle so as to avoid living paycheck to paycheck or, one day, watching their retirement savings wither away. Currently living through one of the worst economic downturns since the Great Depression, many teenagers and 20-somethings are teaching themselves to live more cautiously, save more, spend less, and eschew materialism.

In an interesting turnabout, whereas previous generations saw wealth and the accumulation of material goods as an expression of freedom, today's young people are just as likely to define freedom as not feeling compelled to achieve economic prosperity or maintain material goals. Job satisfaction is something that remains very important to young people, many of whom tell pollsters they define happiness as doing something you love.

Yet, they're realistic enough to know that this might mean living more frugally.

When they do spend money and buy things, they say, they're going to try to be much more thoughtful about it than their parents were. Marketers have long made it their mission to try to persuade U.S. consumers that they deserve the biggest house, the coolest gadget, the newest car, the nicest clothes they could afford — or, thanks to credit cards, really couldn't afford but could purchase anyway. Many baby boomers fell for that line, and now many of them have very little in retirement savings and have no choice but to keep working.

Young people are right to look at this sort of economic instability as something to guard against. They're on the right track. They need to keep making sound economic choices and plan for a future that could be even more economically unpredictable than what they're experiencing now. The only thing smarter than learning from your own mistakes is learning from the mistakes of others.

A new era may be upon us. No more Keeping up with the Joneses. For the children of the recession, the more accessible — and more admirable — goal may just be to keep living within their means. This kind of philosophy is sure to pay dividends for those individuals but also for the entire country. If Americans are looking for a silver lining in the current economic troubles, that will have to do.

REPRINTED FROM THE SAN DIEGO UNION-TRIBUNE.

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