Young dream-seekers strapped by debt

Compounding these generational challenges is what Ms. Yochim calls "incessant commercial wooing." On TV, she says, "it's all about luxury and excess and consumption," right down to the fancy lofts and apartments where sitcom characters live.

"That is not how people really live in New York City," she says. And with commercials filling 20 minutes of every televised hour, she adds, "No wonder we all suffer from 'the wants.' "

When real-life 20- and 30-somethings dream of home ownership, they can face daunting odds - and the temptation to overextend themselves.

"They're introduced to products that make for dangerous borrowing," Yochim says. These include interest-only loans and zero-percent-down mortgages. "The lending industry has said home ownership - the American Dream - is not out of your reach, and we can make it work. They do make it work - for them, for the bank."

As Draut looks at young people trying to build their lives, she sees a political system that has failed to address major changes, such as the increased need for a college education. "Instead of putting more resources into helping people pay and making sure they get through college, we've made it more difficult for students to finance education than 30 years ago," she says. She proposes shifting federal college aid away from loans to grants.

Another major issue involves the high cost of rearing children. Family experts say the United States is alone among developed countries in not providing either paid family leave for parents when they have a new child, or affordable child care.

Even an Ivy League education is no guarantee of instant financial stability. Jeffrey McDaniel graduated from Dartmouth and his wife, Meghan, from Smith. But in 2002, as they began paying her graduate school tuition and their wedding bills, they did considerable belt-tightening.

"We ate on $10 to $15 a week," says Mr. McDaniel, a fundraiser. They lived in a $590-a-month unair-conditioned apartment on a trolley line in West Philadelphia, battling roaches and mice. After Mrs. McDaniel earned her master's degree and began working full time, they moved to a better area and continued paying off debts.

On Dec. 30, their frugality paid off. "We hit a zero balance on every credit card," McDaniel says. "That was quite a celebration for my wife and me."

Draut and her husband no longer have to sell CDs to raise cash. But she says she is "still chipping away" at school debts.

For others in this generation, Yochim suggests finding ways to improve incomes. That might include taking a temporary second job, taking in a renter, keeping a car longer, or using public transportation.

She urges young adults to contribute to a 401(k) program, calling their nonparticipation "alarming." Noting that an employer's matching funds are free money, she adds, "Always take the freebies."

And check credit reports. "Your college grades might not follow you for life, but your credit report does," Yochim says. "Your youthful indiscretions are going to follow you around for seven years, or longer."

Draut chides her peers for their lack of interest in the news and their noninvolvement in politics. "They don't connect their personal financial problems to the larger issues in the economy and to the political system," she says. "It's time we change that."

She also challenges young people to start reading newspapers, either in print or online. "Politicians don't pay attention to them because they don't vote. Young people need to weigh in on issues being debated by elected officials. And vote. When it comes to this generation trying to exercise some political muscle, a 50 percent generational turnout isn't going to get the job done."

Page: 1 | 2