Give Us Some Credit
Kimberly Palmer, MPP’04, gets annoyed when she hears the term “Generation Debt” used to describe young professionals today.
Sure, there’s no shortage of facts supporting the typecast. Two-thirds of all college students take hefty loans (around $22,700 on average) to pay for their degrees and the average credit card debt among people in their 20s and 30s is now about $4,000 per person—swelling more than 50 percent in the last decade. But as a personal finance columnist for U.S News & World Report and author of the new book Generation Earn , she says that’s only one small part of the story.
“I get really frustrated that so much talk about our generation focused on how much debt we have,” says Palmer, who is just starting a family. “We’re not defined by our debt. We’re thinking about so much more."
Palmer fields a lot of questions from readers of her popular “Alpha Consumer” blog at the magazine. She says debt is a serious concern today, but so are things like how to save money, where to invest it, and how to know if you’re ready to start a family, buy a house, or launch a business. Generation Earn (Ten Speed Press, October 2010) offers more than financial advice on these topics; it also gives today’s young professionals credit where credit is long overdue.
“It’s really not true that we’re so dragged down by debt,” she insists. “We’ve experienced two recession in the last ten years, the job market has been really tough, but despite all that we have such big goals for ourselves like launching our own businesses, starting nonprofits, and contributing to the world in some way.”
In re-framing the narrative of her generation and tackling some of their toughest financial questions, Palmer breaks her book up into three sections—building financial security, starting a family, and giving back—using stories from a few young adults as examples along the way. Take Nicole Mladic of Oak Park, Illinois, who tells Palmer that at age 25 she realized she was never going to have enough money to buy a house unless she started saving. In 2004, Mladic started putting away a measly 2 percent of her income and has slowly raised it to save more than $100,000 over the past six years.
“Starting with a small steps can lead to a lot of money,” Palmer advises, an idea she threads throughout the book.
Palmer has built her career in stages as well. After reporting on culture for the International Herald Tribune in Tokyo, she decided she wanted to move into “more serious” business journalism, and enrolled at the Harris School to get an edge in economics. “The field of behavioral economics has just boomed recently, and there is so much research on what guides our decision-making process,” she says. “Today I use everything I learned at the Harris School to inform so many of my articles.”
But far from a theoretical take on what individuals should or should not do, Palmer’s columns and book are rooted everyday life. She uses the pronoun “we” a lot, unabashed by the fact that in many cases she’s navigating this stage of life at the same time as her readers—while writing the section about starting a family, Palmer was pregnant with her first child.
“I've experienced two major financial shocks in the last year, having a baby and buying a house,” she writes in a recent column, confessing that she isn’t currently saving one-third of her income, which she recommends in Generation Earn. “Between mortgage payments and daycare expenses, I've fallen way behind, but I plan to return to my previous saving levels as soon as those costs become more manageable.”
So if not debt, what is her generation’s biggest hurdle to financial stability? Palmer says young professionals are better educated, more informed, and more ambitious than any other generation to date. “We have so many options at our fingertips,” she says. “The challenge is figuring out which one of those we actually want to pursue. It can be overwhelming.”
She may not have it all figured out, but like her career, family, and finances, Palmer is taking her own advice and preparing for the future one small step at a time.
--Steven Yaccino
