MONEYSCHOOL Book Report

MONEYSCHOOL Book Reports

> Generation Debt: How Our Future Was Sold Out for Student Loans, Bad Jobs,
No Benefits, and Tax Cuts for Rich Geezers—And How to Fight Back
> Maxed Out: Hard Times, Easy Credit, and the Era of Predatory Lenders
> The Everything Personal Finance in Your 20s and 30s Book

Generation Debt: Why Now Is A Terrible Time To Be Young
By Anya Kamenetz

This is a well-written book that everyone under the age of 25 should read—and the sooner the better. Through a combination of impressive research and first-hand interviews with financially struggling young people across America, the author highlights a number of critical economic challenges faced by Generation Y.

Kamanetz, a Yale grad in search of a journalism career, moved to New York and found herself unable to land a steady job. During one a free-lance assignment, she contributed to a series of articles for the Village Voice detailing the economic plight of many well-educated young people who found themselves trapped by crushing debt and a lack of attractive job prospects. She expanded that idea into this book. (The subtitle above is from the hardcover edition. The paperback edition, pictured here, is subtitled, “How Our Future Was Sold Out for Student Loans, Bad Jobs, No Benefits, and Tax Cuts for Rich Old Geezers--And How to Fight Back .”)

In Generation Debt, Kamanetz uses both personal narratives and solid statistics to support her case that strong economic headwinds are holding back young adults striving to achieve the standard of living enjoyed by their parents’ generation. Among the culprits are inflated costs for higher education, student loan debt, falling real wages, and the shifting of responsibility for health care and retirement costs from employers to employees. And don’t forget housing costs, which have increased dramatically in the last decade, especially in many of the large cities where the most active job markets for young people are found.

Those observations are serious and well-founded. And, although some critics describe the book as “whiney,” and accuse Kamenetz of failing to hold her peers accountable for their lack of financial responsibility, she does a good job of focusing attention on serious issues that should be of concern to all of us--not just twenty-somethings.

Where she goes astray, in our opinion, is in proposing solutions to these problems. She urges her generation to become politically active to counter what she sees as the disproportionate influence of older Americans on government policies. Among other things, she wants the government to spend less on social security and more on educational grants.

Granted, political apathy among those under 30 is widespread, and greater political involvement by young people would be positive for a variety of reasons. But betting the future of the younger generation on help from the federal government seems both naïve and futile.

Young people need to be aware of these challenges and take them into account as they make plans for higher education, job training and careers. Yes, college is expensive. Students who have to pay their own educational expenses need to be realistic about how much they are spending, whether the benefits are worth it, and whether or not there are more cost effective alternatives. These are big issues, and MONEYSCHOOL will be dealing with them in future issues of KaChing!, our personal finance newsletter for 18-24 year-olds.

–Joe Colgan

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Maxed Out: Hard Times, Easy Credit, and
the Era of Predatory Lenders
By James D. Scurlock

James D. Scurlock started out to make a documentary movie. What he ended up with was a movie and a book—both with the same title—that expose some surprising truths about debt and debtors in America. The picture he paints is of a people addicted to debt being preyed on by unscrupulous financial institutions that will do most anything for a buck.

He tells stories that are strange—like the one about the U. S. Marine Corps sergeant who used her government credit card to pay for breast enhancement surgery—or sad, like those of people, including two college-age kids, who found themselves so desperate over credit card debt that they committed suicide.

Most Americans accept debt as normal and necessary, but Scurlock shows the extremes to which banks, credit card companies, mortgage companies, and other lenders will go to push more debt on borrowers—even borrowers they know will have difficulty repaying it.

That’s one of the surprises in this book. Maxed Out tells why banks refer to people who pay off their credit card bills each month as “deadbeats” and “freeloaders” and why they prefer to do business with borrowers who are likely to have difficulty making their payments, because they can be charged higher interest rates and lots of penalty fees.

Maxed Out tells how credit card issuers lobbied against income tax rebates in 2001 for fear that the money would be used by borrowers to pay down their balances, and how they won passage of a new bankruptcy law that makes it much more difficult for debtors to discharge their debts, no matter how legitimate their reasons for declaring bankruptcy.

The book is an easy read. It covers a lot of ground and tells many stories of individual misfortune related to credit cards, and other forms of debt. Scurlock interviews pawn shop owners and debt collectors, and a Minnesota woman trying to get her credit back after being inadvertently declared dead by a credit bureau.

But the important thing about this book is that reading it will open your eyes to many of the creative ways lenders take advantage of their customers, and that will help you protect yourself from becoming one of their victims.

–Joe Colgan

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The Everything Personal Finance in Your 20s and 30s Book
By Debbie Fowles

This selection is an “Everything” book, part of a series like the “for Dummies” books. It was published in 2004 and lists for $14.95. The author, Debbie Fowles, edits the financial planning pages of About.com, and has a background in accounting and business management. She is also the author of 1000 Best Smart Money Secrets for Students.

Personal Finance in Your 20s and 30s is a 304-page trade paperback offering general personal finance and money management advice that focuses on issues of concern to a relatively young audience. It covers topics ranging from financial goal-setting and budgeting through banking and credit cards to home-buying and investing.

Like most such books, it isn’t exactly a page-turner, but it’s comprehensive, well-organized and well-written. You can read it from cover to cover if you choose, or you can use it as a reference book—looking up topics as the need arises. Personal Finance in Your 20s and 30s is practical, up-to-date, and easy to read.

If there’s one thing that makes this book stand out, it’s the nuts-and-bolts tips that you will find throughout the book. It also contains a brief glossary of financial terms, and an excellent list of internet resources on a variety of topics.

Overall, Personal Finance in Your 20s and 30s is one of the better books we have seen in this genre, and is well worth having in your financial library.

– Joe Colgan

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