Author Topic: Millennial told she can actually save for a house by cutting down on flat whites  (Read 8297 times)

shelivesthedream

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https://www.theguardian.com/money/2018/jan/29/can-you-really-save-for-a-deposit-by-ditching-coffee-and-avocado-toast-i-tried-to-find-out

This was actually a more interesting article than most written on the subject, mainly because Martin Lewis’s advice (the MoneySavingExpert man) doesn’t pull any punches. No “Oh dear, poor millennials, life is so hard for you”. Instead it’s more “You could own a house if you wanted, but talk is cheap and your actions suggest you don’t want to”. Slightly disappointed by the “Oops! Silly me! I accidentally spent £20 on G&Ts! How did that happen?? *bimbo face*” tone of her spending diary, but overall a good and worthwhile article. And at the end she buys a cafetiere!

Quite tempted to try and remember to email her in six months asking how she’s doing 😊

Linda_Norway

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That was a good financial adviser who made her see the light.

Serendip

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An interesting read..so much money spent on food!

This is the first month we have tracked our food purchases together (my partner wasn't on board about this for a long time).
I was shocked that my numbers were around $500/his around $650, so combined $1150. This included groceries, eating out and any alcohol.

A friend at work decided to do the same thing when I told her about the app I used..she is now currently at $850 for the January and her partner around the same. She was surprised mine was so low (and I was thinking it is so high!) Tracking makes such a difference.

WhiteTrashCash

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Yeah, I always tell people that they can save a ridiculous amount of money by not getting Starbucks, eating out, or going to bars and they scoff at me. It's absolutely true. And it will help a person lose weight too.

Dabnasty

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Yeah, I always tell people that they can save a ridiculous amount of money by not getting Starbucks, eating out, or going to bars and they scoff at me. It's absolutely true. And it will help a person lose weight too.

This is one of the hardest parts of being mustachian.

Normal person: "How do you have enough money to buy a house?"
Mustachian: "I didn't spend all my money on eating out for lunch."
Normal person: "hmmm. No, I'm pretty sure houses cost more than lunches. You probably got a big inheritance or something" *Walks away whistling*

Dani S

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Yeah, I always tell people that they can save a ridiculous amount of money by not getting Starbucks, eating out, or going to bars and they scoff at me. It's absolutely true. And it will help a person lose weight too.

This is one of the hardest parts of being mustachian.

Normal person: "How do you have enough money to buy a house?"
Mustachian: "I didn't spend all my money on eating out for lunch."
Normal person: "hmmm. No, I'm pretty sure houses cost more than lunches. You probably got a big inheritance or something" *Walks away whistling*

Haha I hear one guy say that all the time, joking about how he can't buy a house due to avocado toast. He buys an XL Dunkin coffee every morning, and I frequently see him going for Starbucks in the afternoon.

bacchi

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Yeah, I always tell people that they can save a ridiculous amount of money by not getting Starbucks, eating out, or going to bars and they scoff at me. It's absolutely true. And it will help a person lose weight too.

This is one of the hardest parts of being mustachian.

Normal person: "How do you have enough money to buy a house?"
Mustachian: "I didn't spend all my money on eating out for lunch."
Normal person: "hmmm. No, I'm pretty sure houses cost more than lunches. You probably got a big inheritance or something" *Walks away whistling*

Haha I hear one guy say that all the time, joking about how he can't buy a house due to avocado toast. He buys an XL Dunkin coffee every morning, and I frequently see him going for Starbucks in the afternoon.

My former cow-orkers would go out to eat 3x/day. They'd come in with a meal, go out to lunch, and then meet up after work for sushi at some fancypants restaurant. It was probably $50/day.

Yes, they'd then complain about not being able to afford a house. I was all, "Yo, morons, you're spending about $800/month on eating out. That's about a $165k mortgage. Add in your $1000 rent and you're there." They didn't want to hear it.


shelivesthedream

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I did hear a comedy song a little while ago about how they can't afford to buy a house because they bought a single £300k avocado instead. It was pretty funny, but sad to feed this idea that the "little things" don't add up.

Linda_Norway

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I have three millennial colleagues, all still in their twenties. Two of them are guys who have graduated from university 1,5 year ago. Both have been able to buy a house. One of them walks in shoes that are 10! years old. They both wear old originally blue t-shirts that have become grey after many years of washing. One of them is looking for a roommate to share his new apartment with.
I also have a more spendypants female colleague, who spends quite a bit on clothes, handbags and has a car loan for an fancy audi car. But even she managed to save up her own share for an apartment that she recently bought. She now has a house with a mortgage with  the same amount of what she used to rent for, but for a bigger house, in the same neighbourhood.

In my job they do a financial screening of everyone who is hired. I think you don't get hired if you have high CC debt. That might explain why we have a lot of financially sensible people working here. Although many of them are more spendypants then I am and the guy described above.

nereo

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After rent, heating, electricity, groceries, internet, mobile phone and public transport costs, I am left with a bit over £1,000 each month. Of that, I save about £100 every month. The rest goes on, mostly, coffee, food [out], alcohol and travel.

Yikes.  her budget for coffee, eating out, alcohol and travel is about on par with our budget for 'everything'.
FWIW £900 = $1,275 USD
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jooniFLORisploo

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I came here to post the same link, checked first to see if someone already had :)
GREAT article!
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Blonde Lawyer

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I'm allergic to avocados.  I hear a lot of jokes about that being the reason we own our house.

nereo

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I'm allergic to avocados.  I hear a lot of jokes about that being the reason we own our house.
well.... I've seen avacado toast for $8-10 at some spots.  30ish days in a month, so I *suppose* if one were to eat it 2x/day it could add up to most of a mortgage payment...
:-P
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obstinate

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I'm allergic to avocados.  I hear a lot of jokes about that being the reason we own our house.
well.... I've seen avacado toast for $8-10 at some spots.  30ish days in a month, so I *suppose* if one were to eat it 2x/day it could add up to most of a mortgage payment...
:-P
Can buy avos for $1.25/ea in downtown Manhattan. Just eating avo toast twice a day wouldn't be enough; you'd also have to refuse to learn to make it yourself.

marty998

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I'm allergic to avocados.  I hear a lot of jokes about that being the reason we own our house.
well.... I've seen avacado toast for $8-10 at some spots.  30ish days in a month, so I *suppose* if one were to eat it 2x/day it could add up to most of a mortgage payment...
:-P
Can buy avos for $1.25/ea in downtown Manhattan. Just eating avo toast twice a day wouldn't be enough; you'd also have to refuse to learn to make it yourself.

$15 for avo toast around the corner from my workplace. Add a dollar or two if you want it on sourdough.


mustachepungoeshere

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I'm allergic to avocados.  I hear a lot of jokes about that being the reason we own our house.
well.... I've seen avacado toast for $8-10 at some spots.  30ish days in a month, so I *suppose* if one were to eat it 2x/day it could add up to most of a mortgage payment...
:-P
Can buy avos for $1.25/ea in downtown Manhattan. Just eating avo toast twice a day wouldn't be enough; you'd also have to refuse to learn to make it yourself.

$15 for avo toast around the corner from my workplace. Add a dollar or two if you want it on sourdough.

A woman at work pays $8 for Vegemite toast every day.

Toddlers can make Vegemite toast but apparently my 40-something colleague can't.

Mesmoiselle

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Avocado toast?

....I mean, is it actually as literal as it sounds? toast with probably only half an avocado being smooched on it?

nereo

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Avocado toast?

....I mean, is it actually as literal as it sounds? toast with probably only half an avocado being smooched on it?
Yes.

made right, it is delicious. Made at home it can be great snack for ~$2. At trendy cafés it can run you $10 or more...
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Plugging Along

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Avocado toast?

....I mean, is it actually as literal as it sounds? toast with probably only half an avocado being smooched on it?
Yes.

made right, it is delicious. Made at home it can be great snack for ~$2. At trendy cafés it can run you $10 or more...

I was really worried about advocado toast for my kids.   My kids LOVE avocado toast.   They actually came up with it around the time these articles came out.  They often make it themselves for breakfast or a snack.

I was actually worried they would get in a bad habit of buying it when they are older.  We saw it on a restaurant menu for $14.  My kids were horrified that any one would pay that much.   So at least tha is good. 


nereo

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Avocado toast?

....I mean, is it actually as literal as it sounds? toast with probably only half an avocado being smooched on it?
Yes.

made right, it is delicious. Made at home it can be great snack for ~$2. At trendy cafés it can run you $10 or more...

I was really worried about advocado toast for my kids.   My kids LOVE avocado toast.   They actually came up with it around the time these articles came out.  They often make it themselves for breakfast or a snack.

I was actually worried they would get in a bad habit of buying it when they are older.  We saw it on a restaurant menu for $14.  My kids were horrified that any one would pay that much.   So at least tha is good.

Use it as a teaching opportunity.  Coffee, avacado-toast, artisan bread and about a million other things can be made at home very inexpensively.  Or it can be bought in a store for a 6x markup and leave you poorer and dumber. 
"Do not confuse complexity with superiority"

Nicholas Carter

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As I put it recently. "The problem is not our 300 dollar a month Avocado Toast habit. The problem is that we are the kind of people who spend 300 dollar a month on Avocado Toast. Let's start with the toast, and see what else we can change from there."

Basenji

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Day 14
Christmas Day
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The trick to saving money, it seems, is not to leave the house or go online.

Well...yeah ; )

marty998

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As I put it recently. "The problem is not our 300 dollar a month Avocado Toast habit. The problem is that we are the kind of people who spend 300 dollar a month on Avocado Toast. Let's start with the toast, and see what else we can change from there."

Not even Mark Twain quoted himself :D

londonstache

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I find the article fascinating from a psychological perspective.

I think one issue that several people are blind to is not associating multiple small purchases with a failure to save for big goals (like a house deposit, retirement etc). In the UK where house deposits are huge sums this creates a particular problem where people cannot see the association with buying coffee every day vs. buying a house.

A better approach is to say, "I want to save x in 4 years towards a house deposit. Therefore I need to save 0.25x each year. Therefore I will set myself to automatically save this per month, and budget to spend what is remaining".

A similar mistake is around pension savings for the general population (non-FIRE). The general approach is "given my lifestyle and what I like to spend, I can afford to contribute x towards retirement". A better approach is "I need to save y to have a comfortable retirement. Therefore I will set myself to save this amount and budget on the remainder". Obvious for mustachians, less obvious it seems for a lot of people as the idea that it is a long way off (and therefore I don't need to worry about it) has greater weight than I need a lot of money (and therefore should act now).

I'm aware this approach starts to fall apart at lower incomes, but certainly seems a better thought process for most.

sea_saw

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This article is so pleasant and refreshing. I really wish I saw more nuanced discussions of this issue that weren't either 'doom for Generation Rent' or 'silly millennials buy avocado toast instead of houses', and this article is a rare example that doesn't fall into either hole. 

The main problem I have with most discussions of this issue, often including comments on this forum, is not making a clear distinction between individual and population level effects.

On an individual level, is it possible for someone like the article's subject to buy property in London alone (without parental or partner help)? Yes, it's not outside the bounds of possibility. It would involve something like spending a few years dropping all unnecessary spending in order to save a minimum of around £50k, while also working to raise her salary to around £50k - which sounds intense but by no means impossible. Her actions CAN dictate her outcomes here to a great degree. Her habitual unplanned purchases ARE adding up to a significant sum. There is a lot she can do to improve her situation. Not everyone in her generation is in those shoes – but certainly some are, and she's a great illustration of it.

On a population level, is it that people in her generation are mismanaging their finances to an unusual degree, or is it that the task is more demanding than ever before? Absolutely the latter.

These problems are interlinked but they are not interchangeable.

My parents bought around the millenium. They both hustled to the max – pursued well compensated jobs, had additional side gigs, lived frugally in a way that was fairly exceptional among their peers, and invested their savings. This allowed them to buy a large 4-bed property in Zone 3. An identical couple doing that today with the same level of career success and concentrated frugal effort could for sure still be able to afford to buy, but maybe a small flat, or go to zone 6+ for a large property. Fine, so it goes.

However, if my parents had had more average salaries, less investment knowledge, or less of a willingness to be 'weirdly' frugal, they would still have been able to buy a property in London, just not such a nice one. Today, that hypothetical middling couple would probably not be able to buy at all. The bell curve has shifted, the same amount of effort gets you less. As far as I've been able to glean from the numbers, our actual savings rate are not dramatically different between the generations, it just your money buys you a whole lot less house and a whole load more crap clothes and smallish luxuries than it used to.

On a personal level, you want to hold firm to your individual locus of control, working with the cards you've been dealt and looking around with an eye to opportunities rather than hindrances – the same for your friends or children or whoever else you can influence to make good decisions. There is nothing wrong and a whole lot of good in getting advice about maxing out LISAs and learning how to invest, bringing in your lunch as a matter of course, finding ways to save on seemingly 'fixed' regular costs, and @londonstache IMO your point is the most important idea of all, working out what lifestyle you can afford by calculating backwards from your long term goals instead of the other way around. It's all transformational, I'm living proof and I don't shut up about it.

But when people discuss these strategies as a way to level the playing field overall, I just think, no bloody way. The fact that to buy in London/SE you need some combination of: an exceptional income, outside assistance, or a monomaniacal determination remains a problem. UK society is currently built around expectations of home ownership, but expecting EVERYONE who doesn't have the benefit of the first two to compensate by going all-in on the third strikes me as a little unreasonable as a proposed solution. It always reminds me of that famous comment by Michael Gove when he said that teachers needed to get 'all students to exceed the national average' on literacy and numeracy (!) scores.
« Last Edit: April 13, 2018, 06:22:54 AM by sea_saw »

Forever Wednesday

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Refreshing article, thanks for sharing. I appreciate the author's honesty for disclosing her spending habits and not playing the victim card. Those are some truly abominable spending figures (£181 for a haircut!?).

One topic I seldom see covered in UK journalism is Rent VS Buy. It is usually assumed without question that buying a house is the best investment one can make. But as the mortgage-to-salary ratio grows in a volatile job market, it's becoming less obvious to me (and probably a rising percentage of others in my generation) that this is the optimal financial strategy.



Miss Piggy

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Okay, I have to ask: What the hell are "flat whites"?

nereo

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Okay, I have to ask: What the hell are "flat whites"?
The 'new' coffee craze, mainly being marketed by starbucks. A shot of espresso with steamed milk that's mixed into the espresso as it is poured (and no milk foam). Somewhere between a latte and a cappuichino.

apparently when it is poured correctly it has a white dot at the top.
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Miss Piggy

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Okay, I have to ask: What the hell are "flat whites"?
The 'new' coffee craze, mainly being marketed by starbucks. A shot of espresso with steamed milk that's mixed into the espresso as it is poured (and no milk foam). Somewhere between a latte and a cappuichino.

apparently when it is poured correctly it has a white dot at the top.

Fascinating. I think. Clearly, the world needs this.

Thank you for the reply.

jooniFLORisploo

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I'm not a fancy lady, but I came upon flat whites while visiting NZ, ordered one because I couldn't understand a lot of the things on the menu nor the server's accent. I LOVED THIS DRINK. One of my happiest memories from there. When I returned, I tried to find the same drink, even if under a different name. No luck. Was thrilled when I saw them appear at Starbucks :)
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pachnik

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When I visited Australia about 15 years ago, I went to a coffee shop to get an ordinary cup of coffee.   The barrista heard my North American accent and asked me what I wanted.  I said I wanted a cup of drip coffee.  They made me a flat white since they didn't have drip coffee.  I didn't see flat whites on coffee bar menus here until fairly recently. 

Primm

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Okay, I have to ask: What the hell are "flat whites"?
The 'new' coffee craze, mainly being marketed by starbucks. A shot of espresso with steamed milk that's mixed into the espresso as it is poured (and no milk foam). Somewhere between a latte and a cappuichino.

apparently when it is poured correctly it has a white dot at the top.

Only new in northern hemisphere parts. Around here we've been drinking flat whites for 40+ years.

nereo

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Okay, I have to ask: What the hell are "flat whites"?
The 'new' coffee craze, mainly being marketed by starbucks. A shot of espresso with steamed milk that's mixed into the espresso as it is poured (and no milk foam). Somewhere between a latte and a cappuichino.

apparently when it is poured correctly it has a white dot at the top.

Only new in northern hemisphere parts. Around here we've been drinking flat whites for 40+ years.

It's not a new drink in the northern hemisphere either.  It's the new craze.  Like fashion, things come and go out of vogue.
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Morena

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Cosign everything sea_saw said.

And two things that left me a little agog:
1) "Reader, I bought a cafetiere." Someone who drinks coffee every day did not even have the appliance to make coffee at home? Am I reading that right?
2) The equivalent of over $1200 spending cash per month. She does acknowledge at the opening of the article that she's pretty well off, but...that's a LOT. My spouse and I have about $600 discretionary per month, and that's for two adults and including a reasonably expensive hobby and the cost of our pet's vet visits, medication, etc. (and no, we don't consider ourselves mustachian). Honestly, I would love having that much extra so spend...but I wouldn't do it while worrying that I couldn't save.

Nicholas Carter

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I find the article fascinating from a psychological perspective.

I think one issue that several people are blind to is not associating multiple small purchases with a failure to save for big goals (like a house deposit, retirement etc). In the UK where house deposits are huge sums this creates a particular problem where people cannot see the association with buying coffee every day vs. buying a house.

... Obvious for mustachians, less obvious it seems for a lot of people as the idea that it is a long way off (and therefore I don't need to worry about it) has greater weight than I need a lot of money (and therefore should act now).

I'm aware this approach starts to fall apart at lower incomes, but certainly seems a better thought process for most. (emphasis added)
So part of the psychological angle of this is something that happens to lots of millennials in my area, that happened to me this year:
This year, my gross cash income quadrupled, in addition to a bunch of benefits I've never had access to before like employer-subsidized healthcare and a 401k match, from a bit more than 10k to a bit less than 40k. If you add in my side-hustle, my income went from well below poverty to above median with one contract. This huge percentage jump happens to some people more than once: Going up, then back down, then up even higher, then back down again.
I think this create a strategy of conditional living in my age cohort. "Sure, I'm spending every single dollar I make now, but one day my ship's going to come in, and when it does I'll finally have enough money to build an emergency fund, invest, start planning to die, etc." And while I don't think that it's maybe the best strategy, I can say from here that it looks like it worked: Spending all my money kept me alive and sane while I bounced from industry to industry, and now I just need to work as many 55 hour weeks as it takes to make hay while this sun shines. As long as I fight every step of lifestyle inflation, I should be in a good place when fate kicks me back down to the 10k/year income.

londonstache

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So part of the psychological angle of this is something that happens to lots of millennials in my area, that happened to me this year:
This year, my gross cash income quadrupled, in addition to a bunch of benefits I've never had access to before like employer-subsidized healthcare and a 401k match, from a bit more than 10k to a bit less than 40k. If you add in my side-hustle, my income went from well below poverty to above median with one contract. This huge percentage jump happens to some people more than once: Going up, then back down, then up even higher, then back down again.
I think this create a strategy of conditional living in my age cohort. "Sure, I'm spending every single dollar I make now, but one day my ship's going to come in, and when it does I'll finally have enough money to build an emergency fund, invest, start planning to die, etc." And while I don't think that it's maybe the best strategy, I can say from here that it looks like it worked: Spending all my money kept me alive and sane while I bounced from industry to industry, and now I just need to work as many 55 hour weeks as it takes to make hay while this sun shines. As long as I fight every step of lifestyle inflation, I should be in a good place when fate kicks me back down to the 10k/year income.

The 'conditional' living strategy has a few issues with it IMHO:

  • As your income goes up, so does the relative income of those around you
  • Money saved now has more compound interest that can be gained due to a longer period of time
  • Life gets more expensive, not less as you get older

I think in your situation it sounds as if saving much/anything was pretty tough, so I'm not going to suggest you've made an error. However the woman in the article in the OP was spending £900/month on 'disposable' purchases, which seems high even if you accept that her salary may go up in future. That behaviour would suggest that more coming in = more coming out. I'm always a little skeptical of the idea that someone will behave dramatically differently in the future from how they behave today, unless there is some serious facepunching involved.

Nicholas Carter

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Yeah, conditional living can be dangerous stuff. It absolutely distorts your perspective bc you can put off making serious changes in your life until something that's not in your circle of influence happens to you, and it might never happen to you.
The tricky part of the plan is when I say to myself "Even though I'm not fully satisfied with this lifestyle, and the main thing that made me keep with it was that I couldn't afford anything else, I'm absolutely not going to use any of this money to increase my cost of living until I have my situation sorted out."
The "good news" is that there's quite a bit of situation that needs to be sorted out, so paying off my student loans and my mom's credit cards absorbed most of the new money before I had a chance to spend it on myself. Also five years of living a forcibly lean lifestyle has "gifted" me with a lot of anxiety about spending money. Hopefully I wont get over my fear of buying things until after the 401k is seeded.

nereo

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Life gets more expensive, not less as you get older

I'm not sure I buy this assumption.  It certainly hasn't been true for myself or my spouse; our lives are definitely cheaper now than they were a decade ago. No tuition, no loans, less pressure to 'go-out' in social circles and our healthcare is now largely covered by our employers, we are way better at planning and cooking and fixing/building things ourselves... maybe when we are considering end-of-life, sure, costs can go up considerably.

But I don't think there's any inherent reason why your expenses must increase from your 20s to your 30s  to your 40s to your 50s...
I think it's the default for most people simply because they have more income, ergo they spend more (i.e. the hedonistic treadmill). But this is very different from saying life just does get more expensive.

Kids of course are the wildcard here, particularly if you are paying for college, but here also its the kid who's life is expensive, not the parent.  It just so happens that the parent gets stuck with the bill.
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shelivesthedream

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Glad to see this thread has resurfaced! I just sent her an email asking for an update on whether she'd made any permanent changes. Here's hoping for a reply!

shelivesthedream

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You guys! She replied!

Thanks for the email – it's so kind of you to think of me this many months on. I'm glad my piece prompted some discussion. It's coming up six months since I last spoke with Martin and while I would love to be able to tell you I'm halfway to a house of my own, to answer your question – some of my spending habits have changed, and others haven't.
For example, I have become quite diligent about bringing in my lunch from home since the spending diary exercise as I realised I didn't get any more pleasure from spending £5-10 on something out than I did eating my own sad salad from home. I have also, on Lewis' recommendation, started using the automatic savings app Chip and the "pots" function on Monzo to great effect, and am rapidly closing in on my savings goal of £1200 specifically to set up an ISA. I have also managed to wrench the coffee habit under control. Somewhat. (I now have three cafetières.)
At the same time, it doesn't feel like I have much more money than I did before, and as another grim headline about house prices and millennials' prospects is published every week, I am increasingly sceptical that Lewis was right when he told me I could afford to save for a house deposit, especially outside of a relationship.
The teaching of his that really sunk in, that I think I perhaps should have stressed more in my piece, was that setting aside the issue of home ownership I need to saving more seriously whether it's for a house or not. I am certainly more conscious now of the passage of time and the need to save for the future now than I was before the exercise – now when I spend a little too freely I at least have the presence of mind to feel a bit guilty about it. It felt like quite an attitude adjustment, and I suppose that's the first step...
I would be interested to know broadly what the forums' response to the piece was. Some of the feedback I received suggested that my own personal takeaway of the exercise, that I need to be more mindful about how I spend my money, may been lost on or dismissed by some readers who are understandably angry about the housing crisis and any suggestion that the appropriate response to it is for individuals to change my behaviour. That wasn't my intent – but more than anything after publishing that piece, I understand that money can be a very personal, very emotive subject!....

lindy_zag

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I think that's a nice update! It's not MMM-level, but it doesn't sound like she wants to be. It seems a little ridiculous to tell anyone making 36k that they'll be able to save up a London-size deposit, but she seems to recognize that saving something is better than saving nothing. Bringing her lunches is great! Thinking more actively about her spending is great! I'm not sure why she needs three French presses (Google says that's what us Americans would call a cafetiere), but it's probably still way cheaper than buying it out all the time.
https://forum.mrmoneymustache.com/journals/avocado-toast-happy-hours-travel-dancing-and-savings-too!

(for some reason this link doesn't work to click, but does to copy paste. I am le confused)

FrugalFisherman10

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I think that's a great response as well! She seems to have a lot of humility/presence of mind to be able to still stick with those convictions  and lessons that she learned a while back, and reiterate them to you, a random emailer.
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Antonn Park

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At my previous job, my younger coworker bought her lunch every day. I couldn't believe it. I ate rice and beans for lunch that whole time (1 year) lol. What was really strange is that she worked a waitressing job after work a few times a week to make extra money. I wanted to tell her that if she stopped eating out she would save money, but I didn't want to impose.

Cool Friend

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This article is so pleasant and refreshing. I really wish I saw more nuanced discussions of this issue that weren't either 'doom for Generation Rent' or 'silly millennials buy avocado toast instead of houses', and this article is a rare example that doesn't fall into either hole. 

The main problem I have with most discussions of this issue, often including comments on this forum, is not making a clear distinction between individual and population level effects.

On an individual level, is it possible for someone like the article's subject to buy property in London alone (without parental or partner help)? Yes, it's not outside the bounds of possibility. It would involve something like spending a few years dropping all unnecessary spending in order to save a minimum of around £50k, while also working to raise her salary to around £50k - which sounds intense but by no means impossible. Her actions CAN dictate her outcomes here to a great degree. Her habitual unplanned purchases ARE adding up to a significant sum. There is a lot she can do to improve her situation. Not everyone in her generation is in those shoes – but certainly some are, and she's a great illustration of it.

On a population level, is it that people in her generation are mismanaging their finances to an unusual degree, or is it that the task is more demanding than ever before? Absolutely the latter.

These problems are interlinked but they are not interchangeable.

My parents bought around the millenium. They both hustled to the max – pursued well compensated jobs, had additional side gigs, lived frugally in a way that was fairly exceptional among their peers, and invested their savings. This allowed them to buy a large 4-bed property in Zone 3. An identical couple doing that today with the same level of career success and concentrated frugal effort could for sure still be able to afford to buy, but maybe a small flat, or go to zone 6+ for a large property. Fine, so it goes.

However, if my parents had had more average salaries, less investment knowledge, or less of a willingness to be 'weirdly' frugal, they would still have been able to buy a property in London, just not such a nice one. Today, that hypothetical middling couple would probably not be able to buy at all. The bell curve has shifted, the same amount of effort gets you less. As far as I've been able to glean from the numbers, our actual savings rate are not dramatically different between the generations, it just your money buys you a whole lot less house and a whole load more crap clothes and smallish luxuries than it used to.

On a personal level, you want to hold firm to your individual locus of control, working with the cards you've been dealt and looking around with an eye to opportunities rather than hindrances – the same for your friends or children or whoever else you can influence to make good decisions. There is nothing wrong and a whole lot of good in getting advice about maxing out LISAs and learning how to invest, bringing in your lunch as a matter of course, finding ways to save on seemingly 'fixed' regular costs, and @londonstache IMO your point is the most important idea of all, working out what lifestyle you can afford by calculating backwards from your long term goals instead of the other way around. It's all transformational, I'm living proof and I don't shut up about it.

But when people discuss these strategies as a way to level the playing field overall, I just think, no bloody way. The fact that to buy in London/SE you need some combination of: an exceptional income, outside assistance, or a monomaniacal determination remains a problem. UK society is currently built around expectations of home ownership, but expecting EVERYONE who doesn't have the benefit of the first two to compensate by going all-in on the third strikes me as a little unreasonable as a proposed solution. It always reminds me of that famous comment by Michael Gove when he said that teachers needed to get 'all students to exceed the national average' on literacy and numeracy (!) scores.

Just wanted to say I thought this was a very measured, astute observation about the subject. 

Hargrove

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This article is so pleasant and refreshing. I really wish I saw more nuanced discussions of this issue that weren't either 'doom for Generation Rent' or 'silly millennials buy avocado toast instead of houses', and this article is a rare example that doesn't fall into either hole. 

The main problem I have with most discussions of this issue, often including comments on this forum, is not making a clear distinction between individual and population level effects.

On an individual level, is it possible for someone like the article's subject to buy property in London alone (without parental or partner help)? Yes, it's not outside the bounds of possibility. It would involve something like spending a few years dropping all unnecessary spending in order to save a minimum of around £50k, while also working to raise her salary to around £50k - which sounds intense but by no means impossible. Her actions CAN dictate her outcomes here to a great degree. Her habitual unplanned purchases ARE adding up to a significant sum. There is a lot she can do to improve her situation. Not everyone in her generation is in those shoes – but certainly some are, and she's a great illustration of it.

On a population level, is it that people in her generation are mismanaging their finances to an unusual degree, or is it that the task is more demanding than ever before? Absolutely the latter.

These problems are interlinked but they are not interchangeable.

My parents bought around the millenium. They both hustled to the max – pursued well compensated jobs, had additional side gigs, lived frugally in a way that was fairly exceptional among their peers, and invested their savings. This allowed them to buy a large 4-bed property in Zone 3. An identical couple doing that today with the same level of career success and concentrated frugal effort could for sure still be able to afford to buy, but maybe a small flat, or go to zone 6+ for a large property. Fine, so it goes.

However, if my parents had had more average salaries, less investment knowledge, or less of a willingness to be 'weirdly' frugal, they would still have been able to buy a property in London, just not such a nice one. Today, that hypothetical middling couple would probably not be able to buy at all. The bell curve has shifted, the same amount of effort gets you less. As far as I've been able to glean from the numbers, our actual savings rate are not dramatically different between the generations, it just your money buys you a whole lot less house and a whole load more crap clothes and smallish luxuries than it used to.

On a personal level, you want to hold firm to your individual locus of control, working with the cards you've been dealt and looking around with an eye to opportunities rather than hindrances – the same for your friends or children or whoever else you can influence to make good decisions. There is nothing wrong and a whole lot of good in getting advice about maxing out LISAs and learning how to invest, bringing in your lunch as a matter of course, finding ways to save on seemingly 'fixed' regular costs, and @londonstache IMO your point is the most important idea of all, working out what lifestyle you can afford by calculating backwards from your long term goals instead of the other way around. It's all transformational, I'm living proof and I don't shut up about it.

But when people discuss these strategies as a way to level the playing field overall, I just think, no bloody way. The fact that to buy in London/SE you need some combination of: an exceptional income, outside assistance, or a monomaniacal determination remains a problem. UK society is currently built around expectations of home ownership, but expecting EVERYONE who doesn't have the benefit of the first two to compensate by going all-in on the third strikes me as a little unreasonable as a proposed solution. It always reminds me of that famous comment by Michael Gove when he said that teachers needed to get 'all students to exceed the national average' on literacy and numeracy (!) scores.

+1

Social policy is not constructively discussed on an individual-reform basis.

For example, when considering 401k policy, making contributions "opt out" instead of "opt in" at hire is always going to be a more effective way of addressing a savings problem than saying "that guy should save" (and implying that he deserves every consequence otherwise, refusing any smart policy as "hand-holding").

And! Those looking for individual motivation are absolutely best served by a "if you want it done, go do it, and do it well!" mentality. Waiting for social policy to lift your boat is like waiting for a benevolent bolt of lightning. Ignoring the value of social policy because you were born in a log cabin you built yourself, however, is similarly unhelpful.
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