09/29/2010 09:29 am ET Updated May 25, 2011

Gen X & Gen Y -- Dialing Financial 911

Six Reasons Why Gen X & Gen Y Need Some Serious Financial TLC

They're scared: They've entered their adult years during a gut-wrenching economic and job market. With unemployment over 9.5%, they've seen their parents struggle. Over 7 out of 10 Americans are now living paycheck-to-paycheck.

They are making poor decisions: As a result of that fear they are not making the best long-term decisions for their futures. A recent ICI study shows only 34% of investors under age 35 are willing to take substantial risk with their retirement money -- the exact time in their lives when they should take that risk.

Something as "simple" as a 20-year head start can give you 5x more money: Let's take 2 people. Jane starts saving $5,000 a year at age 25 for her retirement every year until age 65 and gets an average return of 7%. Jane has a $1 million nest egg by retirement. Joe starts saving $5,000 a year at age 45 for retirement every year until age 65 and also gets an average return of 7%. Joe has $200,000 in his nest egg. That 20-year head start gave Jane 5x more money. That's why learning the basics of personal finance -- how to budget, get out of debt, and save so you can get that retirement fund funded in the key early years is so vital.

Young adults consume information differently so there's a delivery challenge when it comes to education: Studies shows that young adults want their financial education delivered in a 21st century way. They want it web-based with robust, interactive tools. And unlike their "I'll do it myself" parents, these emerging adults want help and guidance.

Nearly half of Gen Y has below average financial fluency: A study by The National Foundation for Credit Counseling showed that nearly half of this generation did not understand how to save and budget and that 45% of them have no savings!

The financial world is geometrically more complex: Part of the above statistic is due to the fact that financial literacy is not taught in schools as a core life skill. Young adults often rely on parents who were brought up in "financially simpler" times and aren't equipped to help. They are also bombarded by so many more unrealistic media images about what "normal" lives are like.

So, what's the solution?

If you or someone you love is a Gen X or Gen Y-er... encourage them to self-educate. Here are five of my favorite personal finance sites -- all of which I've either written for or read regularly myself:

• For everyone: &
• For women: and
• For men:

What about you - any additional resources to recommend to Gen X & Gen Y?

Want more financial love? You can follow Manisha on Twitter at @ManishaThakor and sign up for her email updates here. Starting in Fall 2010, Manisha will teach an innovative online course on "Financial Literacy 101" for women though Manisha Thakor, personal finance expert for women, can be reached via her website,