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There’s an old expression about young people: “Youth doesn’t understand age, but age understands youth.” In other words, old people remember what it was like to be young, but young people have no idea what it’s like to be old.
Nowhere is that more obvious than in personal finances.
I’ve written before about my anger and disappointment that the greatest financially successful country in human history doesn’t teach money management to its schoolchildren. When they become young adults and head into the working world, they’re woefully behind on the basics of responsible spending and clever saving.
Cases in point…
An unhealthy perspective
It’s no surprise that young people think they’ll live forever — and therefore underestimate the need for health insurance. Sadly, they also underestimate its expense.
The online health insurance exchange eHealth recently conducted a clever poll, asking more than 1,700 young Americans what they thought was “a ‘fair’ price for health insurance” per month. “Fifty-two percent of young adults age 18–24 identified $100/month or less,” eHealth learned, even though ‘the average unsubsidized individual in that age band is paying $257 per month.”
Because no one teaches young people how health insurance works or how much it costs, many don’t even know what they don’t know. In other words, they could easily search the Internet to learn more, but it hasn’t occurred to them to do that — because we haven’t taught them the importance and costs of health insurance.
Making a dent in the rent
According to Zillow, the average cost of a house today is just over $213,000. Interestingly, that’s right in the neighborhood of this: “Generation Z can expect to spend $226,000 on inflation-adjusted rent in their lifetime.”
Originally published at www.debt.com on July 9, 2018.