Educating Gen Y About Financial Risk

If you’d like to create some very positive “glue” with which to stick your best young talent to you for the next couple of years, here’s a little exercise that’s well worth doing right now.

Draw up a list of staff members and their birth dates, and mark those born between 1980 and 1994. They are your Generation Ys. They are often hard to attract, hard to engage and even harder to keep for a period of time until they learn enough to be profitable – but they can be talented, and they are about to be sorely tested!

A recent survey by Mission Australia has identified this generation as particularly exposed to any type of economic slowdown as they tend to spend for the moment with little thought for the future. They tend to be maxed out on their credit card, behind on their car payments, deep into the ‘olds’ for a never-never loan, and possibly still living at home to subsidise a high-spending lifestyle and/or travel.

They are more impulsive in their purchases (they’ve been called the Now Generation as in I want it now!), and they are focused more on brand and image than on value and price. They grew up in a world where there were plenty of jobs, where their parents had plenty of cash, and where obtaining credit is scarily and seductively easy. They are the buy-now-pay-later generation.

As a generation they appear to have “put off growing up” by ten years, and show little sign of slowing their spending or beginning their saving until into their 30s – about ten to 15 years later than their parents.

They have never known a world in which there may not be a well-paying job available for them, and there is a growing risk that their parents may just have to cash up the family home (the one they were planning to inherit and flog) and use it to top up their super.

Most employers have already learned these life lessons (at least the ones who have survived their first year in business have!) and are ideally placed to offer a balancing economic perspective to their Gen Y staff, and to let them know they wish to protect and assist them to secure their financial future.

From there, it should be a relatively simple matter to seek out a trusted reputable financial advisor, one with a track record of good Client service and quality, performance-based advice, and asking them how they could assist your staff to master their finances.

Worried and financially stressed people don’t work too well, so if you can protect your Gen Y team members and stabilise them around a solid savings and investment program, then you not only help them but help yourself as well.

So, what’s your next step?