Talkin' 'Bout Your Generation

Are young people (aged 18 to 34) spending less money on music CDs, and more on paying off their credit cards? This is the fascinating theory proposed in the April 2008 issue of Esquire by Chuck Klosterman. Statistics show a decline in CD purchases (yeah, we knew that), but without an upswing in other consumer purchases that would make sense. As he points out, if you stop buying CDs, you don’t do it to switch to buying video games or movies. They’re not the same kind of entertainment. I would add that their cost is very divergent, especially the video games. Just think how many CDs you would have to not buy to purchase just one more video game. Doesn’t make sense to ditch one for the other.

So what was happening? According to Klosterman, maybe young people were paying off their credit cards. This is an interesting theory, because every statistic I’ve heard in the past four years suggests that the national personal debt average is now rising more than $1,000 per person per year, including the average personal debt of college age people and people in their early twenties. This is consumer credit card or store card debt, not mortgage or college loan or automobile loan debts, all of which are secured. (You can’t go bankrupt on student loans, so they’re probably the most secured of all debt. I’ve heard of people who died before they paid them off, although probably that’s an exaggeration.)

But Klosterman doesn’t say where he got his figures claiming that fewer people ages 18 to 34 had credit card debt in 2004 than they did in 1989. And he also doesn’t say that the people that age with credit card debt had lower debt. Which kind of argues with the stats I heard in 2004, that college students had on average $5,000 in personal debt, higher than they ever had before. So this is perhaps a case of dueling statistics. Or maybe it’s just another way of viewing the same statistics.

But leaving aside the question of accurate statistics, here’s the more important question: Does this mean that the generation that went wild with credit cards during college and then in their first years as adults suddenly got a dose of good common sense? Maybe. Klosterman posits that they wanted the money they used to spend on CDs to pay off other debts. But I’m wondering if they were able to change their spending habits because their horrible financial situation got outed in the media so thoroughly.

Once it’s not a dirty little secret that your generation can’t afford a lavish lifestyle, or that your cohort has been charging up a storm on credit cards, well, you don’t need to front about it any more. Fronting. It’s a street term. Keeping up with the Joneses is the old-fashioned way of describing it, but it’s the same concept. You see that other people have the signs of wealth, and you overextend yourself to imitate them. What a relief to discover that their cars are leased and their car loans are upside down, and they’re moving back in with their parents in order to pay off their credit cards! Now you can stop pretending you’re rich, too. And maybe consider asking if you can rent you old room from your own parents.

I don’t know. It’s just a theory of mine. The Esquire article doesn’t mention research to support this, either. And I haven’t seen any other mention of this idea yet. After all, money is the last taboo. Over and over again, surveys and studies have proved that Americans would rather talk in great detail about their sex lives than reveal any detail about their monetary lives. Which is crazy, then you think about it. So what’s happening, if it’s happening at all? Are Americans learning to be more honest about their personal finances? Wouldn’t that be wonderful, if so? You wouldn’t have to pretend that you have the income of a stock broker by conspicuously consuming everything in sight. It would become acceptable to say no, you can’t take off for a week in the Caribbean with your buddies—few of whom can afford the trip, either, by the way. You finally admit that you can’t afford to buy a pricey condo or expensive new car.

And just think of where this could lead. It could spell the end of Bridezilla weddings! Without crazy consumerized brides demanding that $30,000 and up be spent on a weekend full of outsize marriage activities, people could actually get married without going into hock or demanding that their friends and relatives do so. Couples might even stop charging admission to their weddings. Reveling in vulgarity and greed would cease to be a major part of the wedding experience.

There would still be the problem of the baby boomer generation and its ferocious consumers, many of whom are in deeply in debt, what with big mortgages, college costs, and taking care of their elderly parents. But that generation is about to inherit whatever their parents leave, so maybe they don’t have as much to worry about as the 18 to 34 generation. That’s the theory, anyway. Hey, the baby boom will figure out something to its advantage. It always does.

But just think. The youth of our country might actually be able to end the consumer madness that has been afflicting our country for a long time.

Or not. Depends on how many plasma TVs you buy.