They've made technology an extension of their own bodies with MP3 players, laptops and mobile phones and through these technologies they've become accustomed to instant gratification.



They have better job prospects in a stable job market, and therefore less fear of being unemployed.

And they've also become accustomed to living with debt.

In Western Australia, RAC figures show that from January to May 2008, those in the 20 to 29 year age bracket applied for the highest number of car loans, travel loans and other big tickets consumer items.

That same age bracket also recorded the highest proportion of people applying for an RAC personal loan to consolidate other debts.

The little bills that are biting hard

In Australia around 4.5 million people have been born into the Y generation and one of their distinguishing features is the way they have embraced consumer culture.

They have bought their way into their 20s with loads of consumer credit, whether it's in the form of credit cards or retailer credit offers.

Around 55% currently have credit card debt, 23% have a HECS debt, and a growing number also have small debts incurred through unpaid bills.

According to credit agency Dun and Bradstreet, 47 per cent of debts now referred to debt collectors are for amounts of less than $400.

And half of all people with debts incurred through unpaid bills are under 35 years of age.

The bills most often unpaid by young people are related to the telecommunications industry.

For young consumers, missing the occasional bill could be damaging their credit rating.

Once an unpaid bill is referred to a debt collection agency, your credit rating is scarred.

A mark against your credit rating could make applying for loans or credit more difficult in the future.

This kind of consumer debt across Australia tends to be concentrated in regions or suburbs with a higher proportion of young households or young families, the so called mortgage belt areas.

In Perth, our Eastern suburbs have the highest average debt value while our Southern suburbs have the highest proportion of debt which has been referred to a debt collector.

Repairing things now for the future

Debt consolidation has become a popular way of climbing out of the debt trap.

Generally with lower interest than credit cards and a structured repayment system, personal loans for debt consolidation can offer a more disciplined, lower cost way of reducing bad debts.

The danger is that young spenders who miss the occasional household bill may have limited loan options in the near future.

Missing a payment on an out of control phone bill now, may mean missing out on more worthwhile spending a little further down the track.

Improving your credit rating starts with paying all bills on time. Having a debt consolidation loan that can be adequately serviced will also help prove that debt can be properly managed.

Another important strategy is to close most if not all credit or store cards once they've been paid out, to ensure they don't get maxed out again.

With the rising cost of basics like food, fuel and rent, big spending Generation Y must

start to reassess what the "essentials" in their life really are, because even the small bills that are ignored now will only bite harder when they come back.