In this week’s Ten Money Questions, we speak with Anya Kamenetz. As the author of Generation Debt, Anya speaks up for her peers and argues that the strike against them is the result of a broader economic force and not a sense of entitlement as often described by the mainstream media. I asked Anya to get personal about money, Gen Y and of course, debt. Enjoy!
1. Twentysomethings could be the most indebted generation in modern history. What’s the cause of all this debt?
Take your pick: a shift in federal policy from student grants to student loans, the liberalization of credit laws, increased consumerism, the failure of the health care system, a globalized job market with more short-term jobs and fewer benefits, fiscal irresponsibility on the federal level, and a failure to address a demographic shift that’s gonna leave America with the same ratio of elderly people that Florida has now.
2. Some would argue that as a group, they exemplify an unusual sense of entitlement? Do you agree with this?
Well, it’s hard to argue that a galling sense of entitlement afflicts Americans from ages 1 (“Gimme a Bratz doll!”) -101 (“Gimme a third home!”), and from our executive leadership on down. I also think younger people have always been and will always be excoriated by those older for being too frivolous and focused on appearances and momentary pleasures. The only remedy is experience and for many in our generation, that experience is going to be harsh.
3. What is your most significant memory about money?
Not sure, but here’s one that comes to mind: When I was a 19-year-old summer intern I wrote a silly one-page article for a women’s magazine. The contracted fee was $1200, a princely sum to me then (still is!). But to get paid I had to conquer an intense level of intimidation and call up the magazine’s indifferent editorial assistants to remind them, not once but five or six times over the course of that fall semester. When I finally got the money I used it to travel to Morocco with my now-husband and some friends, and we had the time of our lives.
4. What is your worst habit around finances?
5. You come from a family of writers. Did your parents ever discourage you from pursuing a career that’s often associated with a “starving artist” lifestyle?
Nope. My parents are “do what you love, and the money will follow” all the way. And they’ve always had enough, thank goodness.
6. Any ideas how young people today can learn the difference between good debt and bad debt?
I’m not sure those categories really make sense anymore. Student loans are a prime example: sure it’s a “good investment” in general but tell that to the woman who wrote to me a couple of months ago with $250K in loans from film school. I think it’s a good idea to focus more on the pleasure and satisfaction that comes with saving, watching that balance grow week after week. Naturally you’ll want to protect your little nest egg and you’ll be discouraged from spending it buying crap you don’t need.
7. You’re recognized as the voice of Generation Debt. Is there a price attached to activism?
I don’t think of it as activism, per se--the last time I risked arrest was in 2004 protesting the Republican National Convention. I’m simply extremely lucky to have a job that involves educating myself on issues of importance and then speaking out about them. I’m sure you’re familiar with the downsides of being exposed to all the haters creeping around the Internet but that’s life.
8. Have you started saving for retirement?
Yes, I opened an IRA at 24 and have fully funded it ever since; I have some CDs on top of that and I’m looking at some more investment opportunities. Economic independence is very important to me and I have to walk the talk!
9. How old were you when you got your first credit card? Who taught you how to manage debt and use a credit card responsibly?
I carried Mom and Dad’s card in college. I didn’t get my own card until I was 23, a Capital One Visa with a $300 limit. I almost never carry a balance--I just set up automatic online payments in full. I learned everything I know about managing debt and using credit responsibly as a reporter by talking with people who were kind enough to share their cautionary tales with me.
10. How does money play a role in your relationships?
There’s always potential for tension. For me the issue is usually about maintaining independence and having a fair share of input into decisions when both my parents and husband earn more than I do. I think I can look at the way we all handled the planning for my wedding last fall. My parents were very upfront about how much they wanted to contribute and I basically submitted them the budget at various times, which in turn helped me and my fiance keep track of our spending. There were fights along the way, but I have to say we managed the process with respect that brought us closer in the end.
More about Anya Kamenetz
Anya Kamenetz is a 26-year-old freelance journalist, author, and blogger. She’s a journalistic fellow for the Freelancers Union, a contributing writer for Fast Company magazine, and writes a biweekly column for Yahoo Finance on money for young people. In 2004, the Village Voice nominated her for a Pulitzer Prize in feature writing for her work on the feature series “Generation Debt: The New Economics of Being Young.”
Generation Debt is also the title of her first book. Anya has written for the New York Times, the Washington Post, The Christian Science Monitor, New York Magazine, Salon, Slate, and The Nation on generational economics and politics. She has appeared on campuses from Miami to Kalamazoo, and on media outlets including PBS, CBS, CNN, MSNBC, Fox News, NPR and Air America, speaking out about the economic issues faced by young people.
Read other interviews in Nina’s Ten Money Questions series at Queercents.
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