The 40 million people in Generation Y (those born 1980 to 2000)
have a combined disposable income of $200 billion. That's
enough to make any product marketer salivate. The rest of the world
pays close attention to the products you choose because you not
only influence each other, but studies have found that your
preferences shape your parent's purchasing decisions on
everything from groceries to big-ticket items.
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Your BFF Could Make You
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Shopping is a social
experience for those in their late teens and early twenties. Peer
pressure has always existed but today's youth have the power to
share product preferences with hundreds in a
single click via email, IM or Facebook. Personal recommendations
may be a valid product selection tool, but it's difficult to be
financially savvy when spend-thrift friends constantly barrage you
with a never-ending shopping list.
You may not think you have a problem because you buy inexpensive
items, but the frequency and volume of shopping poses a threat to
already strapped bank accounts . When friends coax you to break
your budget, don't be afraid to call them out on it.
Compare the price of their purchases to something practical but
completely unrelated like six months of cell phone service. Use subtle
anti-shopping signals. For example: when your girlfriend pulls an
expensive dress off the rack and asks your opinion, just shake your
head. (With a little planning, you can maintain your social life
without breaking the bank. Check out
Budget Without Blowing Off Your
Friends.)
Once You Start Spending, It's Hard To
Stop
They also know that consumers tend to become more brand loyal with age. That's why they want to get you hooked on their stuff now, since they expect you to continue to be a customer for the next 20 years. (Make sure you're in control of the card and not the other way around. Read 6 Major Credit Card Mistakes .)
Shopping as a form of entertainment can become a lifelong addiction. It often leads to spur-of-the moment purchases. As your income increases, your shopping sprees become more expensive. If cruising the mall with your buddies has already become a habit, perhaps it's time to find a new hobby.
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Be A Frugal
Maven
It's also easier to
buy stuff with 24-hour online shopping and credit cards for teens.
So, what's a young, financially responsible person to do?
Create save vs. buy coping methods like the following:
- Keep an eye on people who spend responsibly and befriend
them. You'll feel comfortable not having to say no to expensive escapades.
- Let your friends know that you are working toward
specific financial goals like a new car. They will understand why
you don't take them up on every spending opportunity.
- There are more things for you to buy because technology
is changing at such a rapid pace. For example most people replace
their cell phone every few years. It's difficult to keep up
with everything. File all referrals to products you don't
absolutely need today in a favorites email folder. It'll be
there when you need it.
- Don't pine over "stuff." Sitting around
thinking about all the "things" you want to buy will only
entice you to go out and spend your rent money on it. If someone
around you is obsessed with an item, distract them by changing the
subject.
- Don't take all credit cards and ATM cards with you.
If you don't have it, you can't spend it. (For more tips,
check out Five Money-Saving Shopping Tips
.)
- Volunteer to be the pickup person for concert tickets and
pizza. That way you can make the decisions about how much to spend.
Have your friends pool their money ahead of time so that everyone
contributes.
The marketing world revolves around you and your buddies. You control what becomes the next big thing. It is your responsibility to choose carefully. Start by carefully selecting your friends. (Learn what to watch for before you find yourself drowning in debt or filing for bankruptcy. Check out 5 Signs That You're Living Beyond Your Means .)
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