Dr. James West teaches marketing at Washington & Jefferson College, so when he saw something was missing for many of his “Generation Y” students, he moved to fill in the gap.
West recently self-published “Finance and Mange Your Life: A Planning Guide for Generation Y,” which was borne from W&J intersession courses on life skills and financial planning he taught over the years.
“People say today’s kids are financially illiterate,” said West, 68, during an interview last week in his office in Burnett Center. “But I tell kids, ‘You’re not financially illiterate, you’re dealing with an information deficit.’ This information just isn’t being made available.”
West’s writing has a conversational tone, making the book easy to read, but he pulls no punches with his readers.
With the holistic approach he takes to creating not just a financial plan, but a total life plan, readers work through a number of questionnaires that help them prioritize life goals that will guide them to creating a financial plan.
Generation Y includes the approximately 75 million people who were born from the late 1970s through the late 1990s. Some behavioral descriptions include those who are happy and optimistic about life and see themselves as unique and distinct. Many want to become rich and famous, and are very tolerant on issues such as immigration, race and homosexuality. They’re technologically savvy and highly mobile, and use social media extensively, maintaining close contact with family and friends.
To West, there are myriad reasons why a sound financial plan built upon a life plan that identifies realistic and measurable goals, is essential.
He notes that Gen Y will be the most nationally indebted generation, and with the U.S. birthrate at a historic low – and with immigration legislation at an impasse – Gen-Yers will have the primary role in dealing with the longer-living elderly and their financial and healthcare needs.
In more than one passage, West also tells readers there are no shortcuts to developing an all-encompassing plan.
Some of his messages – such as the one that tells readers that not everyone should go to college – might raise some eyebrows, but he has the data to support his contention that Gen-Yers should consider careers in skilled labor or technical areas that require a shorter but more concentrated education that prepares them for jobs that are in demand.
“In most cases you, and especially your parents, just assumed you would go to college without considering whether that was really the right thing for you, or the thing to do right after high school,” West writes in his introduction.
He notes that while about 65 percent of Gen Y-ers go to college, only about half that amount graduate.
Despite the large numbers of young adults enrolling in college, West states, “today, and for the foreseeable future, the greatest shortage of workers in the U.S. is skilled workers: mechanics of all kinds, plumbers, electricians, computer technicians, nurses, medical technicians, etc.
“In 2011 and 2012, while politicians blamed each other for a high unemployment rate, over 3.5 million well-paying skilled jobs in the U.S. went unfilled due to a lack of qualified applicants.”
He also notes that in addition to considering a skilled trade or enrolling in a vocational/technical school to learn a skill, there are other alternatives to attending college right out of high school, including entering the workforce to gain work experience and possibly save money to pay for further education, military duty or helping the less fortunate through joining the Peace Corps or AmeriCorps.
The question of career choices is critical, because West’s plan uses a holistic approach that asks readers to evaluate their life goals and job skills before they construct their financial plan.
He also wants people to learn to manage their time, manage and reduce stress and develop a “me” plan for health, fitness and appearance, as well as manage their interpersonal relationships.
West also stresses that those who opt to construct a life plan do so on their own, just as they should develop a financial plan on their own.
“It’s okay for parents to help, but they shouldn’t do it for you,” West said, adding that while many Gen-Yers come from homes where parents earn good incomes, very few families seldom, if ever, discuss personal financial matters, a deficit compounded in formal education.
According to West, in public schools, courses on personal finance and life skills are often offered as electives that most students choose not to take, and in college, the topics are often ignored in the curriculum.
In the financial planning section of the book, West offers an abundance of practical suggestions for establishing and maintaining a budget, including strategies for saving money on food and using cash instead of credit or debit cards for purchases.
A savings emphasis
West would also like to see Gen-Yers make an effort to return to the 1970s era U.S. savings rate of 9 percent, noting that it would be good for the country’s financial health as well for personal financial well-being.
Like many other financial plans, West’s recommends having six months of savings to cover emergencies such as layoffs or job losses.
Much of the section on spending is devoted to people learning to differentiate between wants and needs, then following a plan for cost-effectively purchasing the items deemed necessary.
He also suggests long-term strategies for reducing expenses by downsizing and simplifying lifestyles, including rethinking the type and size of house to purchase to buying or leasing less expensive, more economical cars.
Long-term savings should be in the form of investments to enable earning income from savings to achieve long-term financial goals. The money should be used for major purchases or advanced education for children, spouse or self; and dealing with economic crises, such as the recent housing market crash;. Retirement should be funded with investments in tax-deferred long-term investment such as 401(k) or 403(b) programs.
According to West, the biggest challenge to getting his message out has everything to do with the way Gen-Yers assimilate information.
“The people I’m aiming this at don’t read books, and that’s a problem,” he said, adding that he’s used mostly social media to promote the book.
He’s also organizing a mini-workshop on “Personal Finance and Other Life Skills” for W&J juniors and seniors that will be offered this fall and again in the spring.
The fall workshop will be developed in conjunction with Terrence MacAllister, a W&J alumnus who works as a financial services representative for MassMutual. The workshop will be a broad review of the issues involved in developing a “total life plan,” that includes personal finance and other related life skills.
The spring session will be focused more specifically on strategies and actions to implement a total life plan, with a primary focus on personal finance.
West is also planning on offering an intersession 2014 class that will delve much further into the topics discussed in his book, and include exercises that will result in each participant drafting a personal finance plan.