Study suggests Gen-Y more willing to incur debt than older generations

Investors representing the Generation Y cohort may be more frivolous spenders than their older counterparts, according to a recent report by MFS Investment Management. The group's Investing Sentiment Survey shows more than on-third of Gen Y investors - individuals aged 18-30 years - agree that their outstanding debt had increased "somewhat" or "significantly" over the past year. This compares to a mere quarter of Gen X investors who reported the same, and only 20 percent of Baby Boomers. This may have some important implications for how creditors and debt collection firms approach their investor relations. It also underscores the importance of consumer credit risk management practices. Older generations were also less likely to report an increase in spending over the previous year, suggesting the trend is not merely about investment risk but fiscal security as well. "Higher debt and discretionary spending come with the territory for this age group," said William Finnegan, senior managing director at MFS. "The concern, though, is raised when these habits are combined with fears of market volatility and high cash balances. It leaves younger investors focused solely on more immediate financial needs instead of … longer-term financial goals."