If you were to ask my preschool daughter what we do with money, she’ll give you the following answer: “We share some. We save some. And we spend some.”

Ben Grey / Flickr source

That’s exactly the the answer I taught her to give. But it’s not because I learned a similar answer when I was kid. In the working-class home where I was raised, the answer would have been something more like “we spend it when we have it, and we borrow when we don’t.”

I learned the “share, save, spend” idea from Nathan Dungan. He runs a website by that name that aims to “help youth and adults achieve financial sanity by developing and maintaining healthy money habits that link to their values.” I’m a huge fan of Nathan’s, largely because he provides me with a simple framework to teach my daughter what money is about.

In brief, what Nathan, the son of a minister and a financial advisor, teaches is that the choices we make about money (What charities do I support? What can my money change within my community? How can I avoid being a financial burden to others? What policies, companies and industries do I wish to support through my purchasing?) allow us to change the world.

And that’s exactly how I want my daughter to treat money when she becomes an adult. I want her to think of money as a tool to change the world she’ll inherit.

Young adult fiction

And Lord knows, the world needs changing. And today’s young adults find themselves in a world that needs economic change most of all. So after reading a seemingly endless series of news stories about the difficult financial situation that the millennial generation has inherited, I decided to call Nathan and ask his thoughts on Gen Y and money.

I was pleased, although not in the least bit surprised, to learn that he thinks young people are getting a bum rap.

“What the data tells us is that their situation is different. They are nearly the most unemployed and under-employed generation we’ve seen — second only to the greatest generation,” he said. “This is not a slacker generation. This is a generation that faces a horrible confluence of events.”

Nathan says millennials face extraordinary levels of debt, a dearth of employment opportunities, a stagnant economy and an abscence of support systems (their parents are losing their jobs too, and the value of their homes has fallen).

“This has the potential to affect Gen Y financially forever,” he said. “Starting life in debt with a poor job is like climbing Mt. Everest, with no oxygen and not a Sherpa in sight.”

Managing expectations

Nathan also said that today’s young adults are, no doubt, “feeling a bit duped.”

First, they’re finding that the advice they were given — borrow for college, make your home your primary investment, trust the government and the markets, etc. — hasn’t worked out well.

Second, they’ve come of age in a culture that teaches them bizarre, inappropriate and ineffectual methods of achieving their goals. “Reality culture teaches that the nuttier and kookier you are, somehow you will ascend do the top. Oddly they believe that this points toward happiness,” he said. “It’s an erroneous and unfortunate framing for them.”

Third, Gen Y — perhaps more than any other generation in history — has been told that great wealth, achieved rapidly, is how success is defined. “The cultural narrative is that fame or fortune is what matters. They think ‘I can just do something extraordinary and I’ll be successful.’ But that is flat out wrong. That is all flat out wrong.”

A wiser approach, Nathan suggests, would be to look deeper at your values before deciding what you want from money. “What sort of framework would you have for success if you reject the cultural narrative?”

Times are tough

In the meantime, Gen Y probably needs to accept that they will have a much harder time gaining economic traction than did previous generations. “I don’t want to say they have to lower their expectations. I would hate to squelch their ambition,” he said. “But there are things they will need to defer. Sometimes you need to live in a crappy apartment for awhile.”

My hope, and perhaps Nathan’s as well, is that the generation that entered adult life amid global financial crisis will learn — even if only by necessity — that money is about more than any single individual. Rather, money is the way we manifest our values in the world. Or as Nathan said, “Money is about more than just me, more than just ‘need.’ It’s about community.”

For more on the financial challenges facing Gen Y, you may want to read my earlier column on the lessons my generation learned, and then forgot, about money and values.

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