Changes in Family and Personal Finances in the Last Generations Essay

Changes in Family and Personal Finances in the Last Generations - Essay Example Political factors such as the Cold War and political tensions globally also affected their productivity and participation in economic activities, which in turn affected their financial status. These people benefited from the social and political stability witnessed from 1970-2000. Personal and family finances of people of generation Y have changed because of changes in government policies, information technology and globalization. Most generation X families relied on one paycheck. This means that only one spouse engaged in economic activities. Though these families relied on one paycheck, they spent 54 percent of their income. Spending was mainly concentrated on fixed expenses such as insurance, mortgage, food and loans. Conversely, most generation Y families have both families working. These families spend 75 percent of their earning on fixed expenses (Warren and Tyagi 20). The spending trends of generation X and generation Y are important because they show that generation Y is more financially vulnerable than their counterparts of generation X. In case of uncertainties such as illnesses and job loss, people of generation X could easily cut back on their spending. These families used 54 percent of their income on fixed expenses and 46 percent on discretionary spending such as fashion and vacation. They could easily cut back on these spending in order to ensure that they overcome the uncertainty. A generation ago, families could address setbacks such as illnesses and job loss by cutting back on their spending. 54 percent of the income of these families was used on fixed expenses.