Author Topic: faced with the reality of most 20-something spending . . .  (Read 30263 times)

Zamboni

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faced with the reality of most 20-something spending . . .
« on: December 16, 2014, 04:12:45 AM »
I'm not sure where to put this, so general discussion it is:

The other day I was out at a pub on a Friday night after a sports league game with a group of people who were about half my age.  To make a guess, the age range was 23-28 if you didn't count me and one other person.  We were all sitting at a giant table.  The guy next to me was really chatty and I learned that he has a masters degree in what should be a lucrative a science field but that he's struggling to make ends meet.  He noticed my iphone3 and asked why I didn't upgrade so I explained that I only pay $10/month for phone service.

"Wow!" he said "I've never heard of that!"  He pays $130/month, he said.  I suggested that he just stop doing that once his contracts ends (he had an iphone 5s so I assumed a contract) and switch to a very cheap plan.   

At this point everyone was listening.  "Oh, I could never do that, I use my phone all of the time!" he said.  Everyone young agreed that my plan would not provide the service they need.  They use their phones all the time to text and send snaps.  I pointed out that I also use my phone all day but since I am on wifi almost all the time, I can text for free and use data for "free" (in quotes because i do pay for home wifi, and so do all of the people there.)  We all agreed that we all have wifi during the day at work.  Even the pub we were in had free wifi.  They were unmoved.  What if you are in your car?  What about sending snaps from all kinds of random locations? This evolved into conversation about snapchat mishaps.

As the conversations went back down to smaller groups, the chatty guy next to me said his family is "dirt poor" and that he has no clue about money management, so "what should he do?" he asked. 

So, of course I said the obvious:  at your age I think you should save as much as you can, max your retirement plans at work at least.

To which he replied, earnestly, that he couldn't save because he has "too many bills."  He lamented that he's not even contributing to the 401k at work to get the 6% company match.  (Aside:  I think that he thought I meant put in an amount to get the match as "maxing", which of course is not what I meant!)  I expressed sadness that he was leaving that money on the table and suggested that he just join the plan and put in 6% to get the match.  He said there was no way he could do that because he has too many bills.  Okay, I suggested then that he join and put in at least a little bit, say 2 or 3%, and then try to raise it up in 1% increments gradually over time until he's getting the full match.  He seemed to consider that idea, yay!  Then I ask: what are your bills? so here we go:

Single guy living by himself, so he has rent and utilities (I didn't ask how much)
School loans (I didn't ask how much)
$130 for his phone that I already noted
He has payments for not one but two cars that he bought new.  The first was an SUV.  After he realized he was spending ~$250/month on gas commuting, he said he decided to get a more efficient vehicle. So he bought another new car, this time a smaller one.  I agreed that the smaller car was a better idea financially.  But I had to ask: "Why didn't he trade in the SUV?"  He gave it to his Dad.  Even though it wasn't paid off.  So he has two new car payments now.

So I said, "Wow, if you are going to pay that much a month for cars, then you might as well just go buy something really ridiculous, like a new Camaro."

I guess I said it pretty loud, because everyone at the table was staring at me in silence.
After an awkward beat, someone volunteered "Pete just bought a new Camaro."  Pete was another guy across the table (name changed, of course.)
And the young lady next to me had just bought a new car.
And the guy next to her had just bought a new car.
And the guy on the other side of chatty guy had just bought a new car (even though he was working at a fitness gym for a boss he didn't really like for a low hourly wage that he had been lamenting earlier.)
So the conversation devolved into how savvy they all felt they were in dealing with new car salesmen. :-(

Monkey Uncle

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Re: faced with the reality of most 20-something spending . . .
« Reply #1 on: December 16, 2014, 04:22:43 AM »
I just can't fathom how someone can consider "sending snaps" an absolute necessity that they are willing to pay an extra $120/mo for.  I don't even know what snapchat is, though I'm guessing it has something to do with posting photographs of yourself or your surroundings.

goodlife

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Re: faced with the reality of most 20-something spending . . .
« Reply #2 on: December 16, 2014, 04:52:40 AM »
I am 30....I have no clue what snapchat is...maybe I should go google it...nahhh....waste of time...my life seems quite alright without it....

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Re: faced with the reality of most 20-something spending . . .
« Reply #3 on: December 16, 2014, 05:24:29 AM »
I just can't fathom how someone can consider "sending snaps" an absolute necessity that they are willing to pay an extra $120/mo for.  I don't even know what snapchat is, though I'm guessing it has something to do with posting photographs of yourself or your surroundings.

I am not much older than that group, and I do even take the occasional picture of myself. It's never occurred to me that I need to be able to publish them immediately when taking them.

MooseOutFront

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Re: faced with the reality of most 20-something spending . . .
« Reply #4 on: December 16, 2014, 05:51:08 AM »
I enjoyed your story.  I often lament how dumb I was throughout my 20's, but the fact that I carried credit card debt as my largest transgression doesn't even jump start "normal" dumbass 20-somethign money management.  As illustrated above.

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Re: faced with the reality of most 20-something spending . . .
« Reply #5 on: December 16, 2014, 06:08:36 AM »
What is really sad is that all these "essentials" have crept in. A number of 20 somethings have always spent all their money, and bought the "in" things - it is just that the "in" things are so much more expensive. And it is just so much easier to get into debt. I remember when I was a 20 something. The "in" crowd went down the pub each day for lunch. Fred (I can't actually remember his name) lived from pay week to pay week, and had always borrowed money from someone at least two days before pay day (he gave it back on pay day). This didn't get out of hand, because in those days, we all got cash money each pay, and credit cards didn't exist, and personal loans didn't exist. So Fred never owed more than one pay's worth of pay - even though he was living pay to pay - he just had to not eat for a couple of days if things got out of hand.

They have always been dumb - but now the stakes are a lot higher.

OutBy40

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Re: faced with the reality of most 20-something spending . . .
« Reply #6 on: December 16, 2014, 06:09:27 AM »
I'm sure most of us were like that in our 20s.  I sure was.  Young people base their decisions on what their current lifestyle demands rather than what their lifestyle could be.  If you use the phone a lot, then you must also NEED said phone.  It's quite simple at that age.

Zamboni

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Re: faced with the reality of most 20-something spending . . .
« Reply #7 on: December 16, 2014, 06:33:34 AM »
I think what boggled my mind is that I was trying to say "you can keep your same phone for $10 a month instead" and that was more than they could process.  So I admitted it doesn't include unlimited data, but that they could have that too if they want for only $30 month.  And that led to "but how is your service?" which I said was as good as when I had AT&T.  No comprehension that I could see.  The attitude, especially from the young lady sitting next to me, was clearly something along the lines of "I pay more for my phone service for a reason." 

Also the guy I was chatting with could possibly see the light at some point.  What a nice guy and clearly he is feeling a need to help his family, which led to him basically giving his dad a new SUV.  But he also seems to understand that he needs to figure finances out better because his current situation is not sustainable.  I guess I can follow up in a week or two by asking him if he joined the 401k plan at work.  Don't want to be preachy, though.  Maybe I'll just make random musings sometimes?  Then again, maybe I just won't bring it up again unless he mentions it?

OutBy40

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Re: faced with the reality of most 20-something spending . . .
« Reply #8 on: December 16, 2014, 06:39:46 AM »
Maybe I'll just make random musings sometimes?  Then again, maybe I just won't bring it up again unless he mentions it?

Just keep your iPhone 3 visible at all times.  Once people see the fact that you are using "old" technology, the newer money-wasters will be sure to chime in and get the conversation started again.

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Re: faced with the reality of most 20-something spending . . .
« Reply #9 on: December 16, 2014, 07:23:00 AM »
Not to mention everyone paying their hard-earned money to socialize in a bar where they pay drink costs 5x over the store price.

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Re: faced with the reality of most 20-something spending . . .
« Reply #10 on: December 16, 2014, 07:46:34 AM »
Yay, another pile-on millennials post!

It's a combination of lifestyle expectations and advertising. Parents using TV as a babysitter, subjecting their kids to massive amounts of advertising before the veracity of said advertisements can be understood; listening to my nephews quote commercials and sing the jingles is cringe-worthy. I know my first few smart phones and plans were paid for by my parents, so once I had the job it was easy to slide into a similar plan with new phones every 2 years. Nobody advertises reliable used cars, but there are tons of advertisements for new cars, advertisements which tease a low monthly rate, not a low sticker price. Buying new cars every few years is likely something they learned from their parents and television. Drinking at the bar/pub with friends is celebrated on nearly every sitcom out there. Going from being a poor college student to being flush with cash at your new job is something very few people are equipped to handle, since most people don't have a required personal finance class where they learn about money management, debt, investing, etc.

Every generation of 20-somethings makes stupid decisions, it's just that the potential magnitude and volume of those stupid decisions has been increasing over the years. Guaranteed, unsecured students loans that aren't dischargeable in bankruptcy, given to an 18 year-old with no sense of what that debt will feel like 4 years later; 7-year car loans lowering payments on sports cars, with insurance rates through the roof; easy credit via credit cards, allowing them to get the "stuff" before they can actually pay for it; all kinds of subscription-based "essentials"; the list goes on and on...
« Last Edit: December 16, 2014, 07:53:18 AM by Philociraptor »

Jouer

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Re: faced with the reality of most 20-something spending . . .
« Reply #11 on: December 16, 2014, 07:56:06 AM »
I didn't get any kind of millennials suck vibe from this thread at all. More about difference in age than difference in generation.

I agree with a few posters here that many 20-somethings, including me when I was that age, are not great with money. I probably wouldn't bring this topic up with them if you want to keep playing the sport with them. (kudos for playing sport with people half your age).

Señora Savings

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Re: faced with the reality of most 20-something spending . . .
« Reply #12 on: December 16, 2014, 08:31:03 AM »
Not to mention everyone paying their hard-earned money to socialize in a bar where they pay drink costs 5x over the store price.

I think that you have some selections bias here.  I'm sure that the 20-somethings you went to the pub with do waste lots of money.  The 20-somethings that came to my pot luck the other night were all responsible with their money.

Zamboni

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Re: faced with the reality of most 20-something spending . . .
« Reply #13 on: December 16, 2014, 08:41:22 AM »
Oh, I won't bring it up.  Finances only even came up because the guy next to me seemed to want to talk about it.  The young lady next to me definitely didn't want to hear it (and I wasn't even talking with her about it.)  Not hating on millennials at all, although I suspect the phone plan thing is a fairly prevalent trend just from the phones I see carried around, which is why I initially just posted this in general discussion as opposed to the wall of shame.

It's the second comment on my iphone3 this month, so outby40 you are right that strategy will probably work.  It's a very recognizable shape, I guess, of something that people in a certain age range coveted when it first came out.

But here's the thing:  when I was in my 20's, sure I did stupid stuff like buy a new car, but the comments that older people made about money did register in my brain.  Not that I always did what they said the first time around, but it registered.  For example, I was fortunate not to need loans for college (thanks again, sport!), but in my last year of college I was working part time in my field and I mentioned to my boss that I was thinking about taking out a student loan during graduate school that I was starting the next year.  He pointed out to me that I should just keep living like the poor student that I was because borrowing money that I didn't absolutely need to survive was going to feel like a pretty sucky decision once I had to start paying that loan back.  All he had to do was confess that he was paying his back to the tune of a few hundred dollars a month and in my mind I was like "Still?  But you're  . . .  old!"  I think he was around 30 :-) 

purplepear

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Re: faced with the reality of most 20-something spending . . .
« Reply #14 on: December 16, 2014, 08:44:53 AM »
Am 20-something. Can confirm.

The first thing I did when I got my first "real" job out of college was buy a new iphone 5 because my iPhone 4 was ruining my life with its inferior 3G service. Next, a new top of the line macbook pro, b/c my 2011 macbook pro was "too slow" when I played games once in a while. Then, I bought a new car with the bluetooth and keyless entry because I could "afford" it. I never even considering maxing out my 401K, because I didn't care about retiring in my 60s.

A year later, I'm now on republic wireless and am considering selling the car sometime in the next year. I'm maxing out all of my retirement accounts. I'm moving into a 600sq ft apartment, even though all of my single, 20-something friends claim that they could "never do that". Quality of life is the same, but the wallet is fatter.

I'm definitely not saying that all 20-somethings are irresponsible with money, but it just seems more acceptable to fall into the trap of spending it all on "essentials" that are actually ridiculous luxuries. Also, if you don't have a clear, short-term goal in mind (like paying off student loans or buying a house) then it can be hard to see the point of why you would save all that money that could be spent on electronics and fancy cocktails.

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Re: faced with the reality of most 20-something spending . . .
« Reply #15 on: December 16, 2014, 08:45:31 AM »
The 401(k) thing really gets me.  I have worked with several people over the years that have not contributed enough to even get the match, one of the simplest ways to "make" money there is. At the end of the day, 6% is usually closer to only 4 or 5% reduction in pay given the tax benefits, just a drop in the bucket, and, with a dollar for dollar match, it gets you to a 12% savings rate!  Hopefully he takes your advice.

Student

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Re: faced with the reality of most 20-something spending . . .
« Reply #16 on: December 16, 2014, 08:54:01 AM »
I don't live in the United States, but overhere we have the same problem. The amount of emails, commercials and other stuff that is being bombarded towards young people is overwhelming. A new thing here that I noticed is that it seems it has become a lifestyle to buy new things among twenty-somethings, even if your budget doesn't allow it (credit).

Agreed that when you are young, you don't always make the best decisions. It cannot be expected of you since you do not have the life-experience. You will make bad decisions, sometimes out of mere curiosity. Thinking about retirement is simply not on your agenda at this time. As said before, there is more in the balance when you start being a young adult and a lot of young people don't realise this until it's too late. Adding credit to that equation makes for an even more slippery slope.

I decided to walk the other way. I leave my phone at home. I don't have the newest model. And I definitely don't have snapchat, Facebook or any other app that will be taking up my time and stressing me out.
(Also, I am a twenty-something :) ) I can tell you same-aged people don't understand these choices if they don't try to, even if they are coming from someone they can level with. And when they do, they'll probably make some better life choices right now and mistakes on the other end. It doesn't mean that the people with the expensive phone-contracts are lost forever. I think they still need to learn that that money could be used elsewhere.

And when you're a twenty- something you're old enough to learn this on your own, the hard way or the easy way :). Sometimes you have to discover for yourself what others have been saying to you for a long time, stupid as it sounds.

Kaspian

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Re: faced with the reality of most 20-something spending . . .
« Reply #17 on: December 16, 2014, 08:56:50 AM »
I face the same conversation all the damn time!  "[Insert bitching about phone bill here.] GASP!  You don't have a data plan?!!"  Errr.... No.  My phone connects to wi-fi automatically at home, work, coffee shops, the pubs, the mall, the airport, on intercity coaches, at friends' and family places. Where the hell else am I going to be?

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Re: faced with the reality of most 20-something spending . . .
« Reply #18 on: December 16, 2014, 09:02:24 AM »
A guy here at work (late 40s) bought a new compact car (on credit) because his new truck (on credit) was costing him over $300 a month in gas to commute in.  He insists he is saving money by the purchase of the second, brand new, depreciating asset on credit (!).

Student

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Re: faced with the reality of most 20-something spending . . .
« Reply #19 on: December 16, 2014, 09:42:34 AM »
I face the same conversation all the damn time!  "[Insert bitching about phone bill here.] GASP!  You don't have a data plan?!!"  Errr.... No.  My phone connects to wi-fi automatically at home, work, coffee shops, the pubs, the mall, the airport, on intercity coaches, at friends' and family places. Where the hell else am I going to be?

I so recognize this haha! Somebody once said to me: ''But what do you do without data when you are in between those places with wi-fi?'' (-.-') Olmost sounds as if a dataplan is like oxygen.

Hugerat

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Re: faced with the reality of most 20-something spending . . .
« Reply #20 on: December 16, 2014, 09:45:44 AM »
Yay, another pile-on millennials post!

Agreed. Why does this need to have anything to do with Millennials or 20-somethings (a pretty meaningless distinction). I see people of all ages making absurd money choices. One person's $130 a month data plan is another's useless Nantucket woven scrimshaw basket. If anything, it's easier to excuse this sort of behavior from people who haven't yet had a lifetime to figure this stuff out.

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Re: faced with the reality of most 20-something spending . . .
« Reply #21 on: December 16, 2014, 09:51:50 AM »
When I was in my 20's I spend a few years dirt poor.  Living on potatoes and water.  It was not fun at all but it taught me the importance of having money available and put me on a path of fiscal conservatism that served me well throughout my life.

Once I started making decent money, I did ramp up my spending somewhat but every time I did, memories of my past experience would well up and remind me to watch my wallet.

i never want to go back to those days of having no money at all.  Never!

rocksinmyhead

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Re: faced with the reality of most 20-something spending . . .
« Reply #22 on: December 16, 2014, 09:59:52 AM »
Yay, another pile-on millennials post!

Agreed. Why does this need to have anything to do with Millennials or 20-somethings (a pretty meaningless distinction). I see people of all ages making absurd money choices. One person's $130 a month data plan is another's useless Nantucket woven scrimshaw basket. If anything, it's easier to excuse this sort of behavior from people who haven't yet had a lifetime to figure this stuff out.

yeah, I wondered if anyone else noticed that there are plenty of 20-somethings on this forum, and plenty of financially-stupid 40- and 50-somethings out there in the real world. anti-mustachianism (and mustachianism!) knows no age limits :)

Hugerat

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Re: faced with the reality of most 20-something spending . . .
« Reply #23 on: December 16, 2014, 10:08:55 AM »
“Our youth now love luxury. They have bad manners, contempt for authority; they show disrespect for their elders and love chatter in place of exercise; they no longer rise when elders enter the room; they contradict their parents, chatter before company; gobble up their food and tyrannize their teachers.”

That was Socrates, speaking about 2600 years ago. If ever you find yourself about to say something about "kids these days," just stop and remember that your grandfather probably said the same thing about you. And your grandfather's grandfather before that.

Breaker

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Re: faced with the reality of most 20-something spending . . .
« Reply #24 on: December 16, 2014, 10:14:06 AM »
Yay, another pile-on millennials post!

Agreed. Why does this need to have anything to do with Millennials or 20-somethings (a pretty meaningless distinction). I see people of all ages making absurd money choices. One person's $130 a month data plan is another's useless Nantucket woven scrimshaw basket. If anything, it's easier to excuse this sort of behavior from people who haven't yet had a lifetime to figure this stuff out.

Except the fact that the data plan is gone monthly and the Nantucket Basket stands a good chance of appreciating in value as the years go by.

Zamboni

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Re: faced with the reality of most 20-something spending . . .
« Reply #25 on: December 16, 2014, 10:42:49 AM »
^That's it, I'm dumping my Vanguard funds and buying Nantucket baskets!

Seriously, though, I think much of the problem to new "wealth," which happens for most people with their first job after school, is that so many seemingly affordable things have hidden recurring costs.  And recurring costs have drifted up pretty rapidly and become acceptable.  In fact, now many things "auto-renew" when you only meant to sign up for one time use or one month of service.  You have to go back in and cancel something that you had no intention of buying over and over.  Yet this is the new normal.  It wasn't very long along that people would open a bill and scream "$130 phone bill?!  Are you kidding me!"  But now it is normal.  A cable bill that high is just as normal, but not long ago the concept of paying for TV was inconceivable. 

And a car!  Well $280 a month is affordable, right?  It's only $280 more than my old beater here, until you stop and think about big increases in insurance, and excise tax, and registration fees, and the fact that a matching new Michelin tire will be another $200 when you roll over a nail.  Of course these costs are not really hidden, but the first time you are setting up shop you might not think of them.  Just like you might not think about how much every cricket and mealworm costs when you are buying a cool new chameleon for a pet with your birthday money.  And before you know it - zing - too many bills!  Of course one can generally shed these bills by making changes, but it's easier to get in than get out, in most cases.

austin

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Re: faced with the reality of most 20-something spending . . .
« Reply #26 on: December 16, 2014, 11:53:42 AM »
An iPhone is "old technology?"

I have an LG dumbphone so that sounds ridiculous to me.

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Re: faced with the reality of most 20-something spending . . .
« Reply #27 on: December 16, 2014, 12:49:45 PM »
“Our youth now love luxury. They have bad manners, contempt for authority; they show disrespect for their elders and love chatter in place of exercise; they no longer rise when elders enter the room; they contradict their parents, chatter before company; gobble up their food and tyrannize their teachers.”

That was Socrates, speaking about 2600 years ago. If ever you find yourself about to say something about "kids these days," just stop and remember that your grandfather probably said the same thing about you. And your grandfather's grandfather before that.

Love it!    My father used to think KISS was the most evil music Satan had unleashed on Earth.   I also remember his voice when I told him I wanted to buy Rod Stewert tickets.   

Last year my elderly parents saw Rod in Reno since he released a album of all standards.....my Dad enjoyed the concert very much.   :)

aspiringnomad

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Re: faced with the reality of most 20-something spending . . .
« Reply #28 on: December 16, 2014, 12:52:14 PM »
Surprised by all the new cars. Millennials here famously eschew car ownership in favor of biking for which they are unfortunately chided by older folks who see that as a sign of adulthood avoidance. The latest phone is definitely seen as a necessity though.

vivophoenix

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Re: faced with the reality of most 20-something spending . . .
« Reply #29 on: December 16, 2014, 01:05:42 PM »
Yay, another pile-on millennials post!

It's a combination of lifestyle expectations and advertising. Parents using TV as a babysitter, subjecting their kids to massive amounts of advertising before the veracity of said advertisements can be understood; listening to my nephews quote commercials and sing the jingles is cringe-worthy. I know my first few smart phones and plans were paid for by my parents, so once I had the job it was easy to slide into a similar plan with new phones every 2 years. Nobody advertises reliable used cars, but there are tons of advertisements for new cars, advertisements which tease a low monthly rate, not a low sticker price. Buying new cars every few years is likely something they learned from their parents and television. Drinking at the bar/pub with friends is celebrated on nearly every sitcom out there. Going from being a poor college student to being flush with cash at your new job is something very few people are equipped to handle, since most people don't have a required personal finance class where they learn about money management, debt, investing, etc.

Every generation of 20-somethings makes stupid decisions, it's just that the potential magnitude and volume of those stupid decisions has been increasing over the years. Guaranteed, unsecured students loans that aren't dischargeable in bankruptcy, given to an 18 year-old with no sense of what that debt will feel like 4 years later; 7-year car loans lowering payments on sports cars, with insurance rates through the roof; easy credit via credit cards, allowing them to get the "stuff" before they can actually pay for it; all kinds of subscription-based "essentials"; the list goes on and on...


I agree with the annoyance at yet another, damn 20 yo's post,  combined with the fact that people underestimate the differences in the mistakes each generation is even allowed to make and the fact that some things are actually beyond a 20 somethings control.

and finally to those who dont get the millennial reference. the title of the thread is 'the reality of 20 something spending'.  a 20 something is a millennial.  that is literally the meaning of the word a millennial.

this forum loves to pile on the 20 somethings


but they are the group with the least wisdom, the least experiences, and the greatest ability to get into trouble.

the previous generations  didnt have the option of a new cell phone, or tvs or even the same car choices. combined with the rising cost of tuition...yada yada yada. we all know where im going with this.   so maybe we should stop the pot shots.  and lets be real the previous generation  of 20 somethings were at home with their spouse watching the kids. so eating out and drinking in a bar were not  the norm of social life.

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Re: faced with the reality of most 20-something spending . . .
« Reply #30 on: December 16, 2014, 02:12:02 PM »
I just can't fathom how someone can consider "sending snaps" an absolute necessity that they are willing to pay an extra $120/mo for.  I don't even know what snapchat is, though I'm guessing it has something to do with posting photographs of yourself or your surroundings.
It's not even that. Call me lazy and spoiled, but I don't want to live without data.. So I pay $27/month with an unlocked phone on an MVNO. I doesn't have to cost $100+.

MooseOutFront

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Re: faced with the reality of most 20-something spending . . .
« Reply #31 on: December 16, 2014, 02:15:51 PM »
Yeah I would HATE to not have data in the car.  Wouldn't go without.  As a passenger it allows me to use the maps to navigate traffic issues and to play on the internet.  But I don't pay $100 a month and finance a damn phone to have it either.

Jouer

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Re: faced with the reality of most 20-something spending . . .
« Reply #32 on: December 16, 2014, 04:37:18 PM »
I think we can all agree that generalizing based on generation is all bull-shit. Gen X was lazy. Gen Y is whatever Gen Y is supposed to be. Ditto for Millennials. Bull-shit, all of it.

I read an article the other day breaking Millennials down into 6 sub-segments....and even that was pretty bull-shitty, though it at least acknowledged that they shouldn't all be painted with the same brush.

Having said that, I still don't get the vibe that the post from the OP was mean spirited and I'm having a small chuckle at those getting all bent out of shape about it.

mm1970

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Re: faced with the reality of most 20-something spending . . .
« Reply #33 on: December 16, 2014, 06:57:19 PM »
Yeah, so I think young people are young and stupid sometimes.

For me, when I was in my 20's, it was partying.  Cell phones didn't really exist, so it wasn't electronics (I was 25 when I got a computer and 26 before I got email).  But it was eating lunch and dinner out, going to bars after volleyball - that's what I spent my money on (oh so much money!!)

But think of it this way - parents of these kids give them cell phones.  They had them as teenagers, and in college.  And then the parents had them so they got the "family plan" with unlimited data.  I know some of these kids and they are in their mid 20s and some of them are still on their parents' plan, and my friends in their 50's pay $350 a month for their family plans.

They are used to it and can't live without it.  I have a pre-paid plan (not quite $10 a month) and I recently ran out of data half way through the month (I discovered that when my husband did the update, it reset my FB account to "autoplay videos".  FB is blocked at work so the wifi doesn't work and if I want to fuss around on it on my lunch break, it burns data.)

But I can live without data for 2 weeks.

Lia-Aimee

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Re: faced with the reality of most 20-something spending . . .
« Reply #34 on: December 16, 2014, 07:54:43 PM »
As a millenial, I'd say that while all age groups have their spenders and their savers, more millenials have the "luxury" of blowing their cash.  Not all, of course, but the ones who have the priviledge of extended adolescence. 

I grew up in a poor, rural area.  My high school friends, many who earn low incomes and who started families in their late teens/early 20's, are pretty frugal.  They might lack investment interest, and many can't save due to min-wage incomes and/or helping out family financially, but tiny homes, side jobs/entrepreneurialism, and DIY is not just common, it's trendy. My sister who still lives there is getting married next year, and her friends think her $200 wedding dress is expensive and have no problem saying "sorry, that bridesmaids dress/bachelorette party idea (etc) is outside of my budget."  Those who head to college rely heavily on salary statistics to choose their major; the boys head to the oilpatch over Xmas vacation and the girls juggle 3 jobs during the entire school year.   

I went to uni with kids from some of the richest neighborhoods in Canada.  The majority of them moved back in with their parents after university, since there's no way they could afford to buy/rent a house that nice.  They don't have bills other than maybe car and cell payments; many chose a major and a job that interested them without remotely considering the earning potential.  Many took reduced courseloads throughout university so that their social lives didn't suffer or are on their 3rd bachelors degree in their late 20's.  I was speaking with one friend last week who mentioned that it makes so much more financial sense to live with her parents than to pay rent.    I agreed and asked her what she was doing with the money she would have otherwise spent on food, rent, and utilies - house downpayment, or just invest? She corrected me - that money lets her travel and shop, things she otherwise couldn't afford at $18/hour part-time.  She then went on to tell me how she took December off to ski, but was getting quite short on money already, but her parents have a timeshare at the hill and will lend her gas money. 

tl;dr - SOME millenials are unconcerned with money management and see no need to be frugal since they are living like teens, not adults.   

TonyPlush

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Re: faced with the reality of most 20-something spending . . .
« Reply #35 on: December 17, 2014, 10:49:51 AM »
20something here. 

I face a lot of pressure because I still drive the same 13 year old vehicle with 75,000 miles as before I graduated with my well paying job. For my peers, a new car is expected to accompany any increase in pay.

And the cell phone entitlement is very real. My generation views an iPhone with an unlimited text, talk, and data plan as necessary as their air conditioning bills. Although I'm sure once upon a time, an older generation was complaining about the newest generation considering heating and gas bills necessary. The cycle continues.

That said, my generation has really been brainwashed by the cell carriers. The idea that a cheaper alternative with a very minor sacrifice (Wifi connections and VOIP calling with a low cost plan) seems completely radical to everyone I've ever talked to. 

I think at the heart of the cell phone madness is the social dynamic. While a 50something could go extended periods of time without wanting to communicate with anyone over a cell phone, or without receiving any communication over a cell phone, a 20something experiences cell phone use as a constant social experience. I believe most 20somethings imagine being the person who sometimes spends hours "unconnected' and therefor letting the messages pile up, is similar to how a 50something would view someone with a reputation for showing up late to social gatherings.

Back to the thread topic, yes most 20somethings are broke. But look around and most 40somethings are broke too. Hell the entire population is broke. What's surprising is that people will find ridiculous "necessities" no matter their age or salary. For 20somethings it's new cars and cell phones. For 40somethings it's new kitchen remodels and luxurious family vacations.

The only difference is for 20somethings it's especially heartbreaking, because with just a few simple changes they could easily set themselves up for a lifetime of success.

rocksinmyhead

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Re: faced with the reality of most 20-something spending . . .
« Reply #36 on: December 17, 2014, 11:06:31 AM »
I think at the heart of the cell phone madness is the social dynamic. While a 50something could go extended periods of time without wanting to communicate with anyone over a cell phone, or without receiving any communication over a cell phone, a 20something experiences cell phone use as a constant social experience. I believe most 20somethings imagine being the person who sometimes spends hours "unconnected' and therefor letting the messages pile up, is similar to how a 50something would view someone with a reputation for showing up late to social gatherings.

Great point. While I disagree that letting messages pile up over several hours is viewed as "rude," at least among my friends, I do think that there is a fear of being disconnected and the negative impact that would have on your interpersonal relationships. For people who have spent their whole adult lives well-connected (I got my first cell phone in 2003, just before 11th grade), it's hard to imagine reworking your life to NOT be that way. I remember one conversation with some fellow first-year grad students and a couple faculty members where we were talking about going out in our college town, and the faculty members were reminiscing about how when they were in grad school, and a group of your friends were meeting at a bar, you had to plan in advance on a time, and a bar, and if Steve or whoever was late, and you moved on to a different bar, you just might end up not seeing him that night. Seems kinda duh but wow, I had never thought of that before! how did people LIVE?!? LOL.

But yeah, having to have the newest iPhone or whatever is just inexcusably dumb. People need to realize there are plenty of "happy medium" cheaper options that still keep you well-connected (personally I wouldn't want to go Wifi-only because I like having access to Google Maps and the internet when I'm going somewhere new, but I do buy dirt-cheap smartphones that I don't replace very often).

Back to the thread topic, yes most 20somethings are broke. But look around and most 40somethings are broke too. Hell the entire population is broke. What's surprising is that people will find ridiculous "necessities" no matter their age or salary. For 20somethings it's new cars and cell phones. For 40somethings it's new kitchen remodels and luxurious family vacations.

Totally agree.

Kaspian

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Re: faced with the reality of most 20-something spending . . .
« Reply #37 on: December 17, 2014, 11:47:38 AM »
So glad I hit 20 just as the grunge movement was going.  None of us had any money but we also didn't have debt.  Fashion of old jeans and used thrift store plaid shirts and DIY painted stuff.  Nobody had a credit card and nobody in their right mind would have given us one.  "Fancy stuff" was really frowned upon--we laughed at people in movies like "Clueless".  The only thing people spent on was cheap coffee, beer, and Doc Martens.

Pooperman

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Re: faced with the reality of most 20-something spending . . .
« Reply #38 on: December 18, 2014, 06:11:03 AM »
20-something here. I got my first smartphone at 23 because I needed one for my job and my flip phone had just died on me after 5 years of quality service. I still have the 4S I got that day. It was the cheapest big I could quickly get my hands on. Now it's on page plus at 35/mo with taxes and fees. I end up running out of data the day before it renews, so not bat at all. SO just 'upgraded' to a 5S on h2o because her 4S wasn't operating correctly on page plus despite a month of messing with it. I view phones the way people used to view used cars: 2 year old used is the way to go.

eyePod

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Re: faced with the reality of most 20-something spending . . .
« Reply #39 on: December 18, 2014, 07:05:11 AM »
I think Dave Ramsey would be a good place to start for him. He really does help get the ball rolling. Obviously investment strategy is one of his weak points, but he helps a lot of people who need a boost in the beginning of their financial journeys.

eyePod

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Re: faced with the reality of most 20-something spending . . .
« Reply #40 on: December 18, 2014, 07:33:37 AM »
Oh, and I'm 29. I paid off my loans within 2.5 years of graduating.

Here are the end of year balances:

2010 $20,254.44
2011 $16,301.26
2012 $0 (Paid off 01Dec2012)

I've also never had a car payment or credit card debt. We're not all bad!

Pooperman

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Re: faced with the reality of most 20-something spending . . .
« Reply #41 on: December 18, 2014, 07:43:21 AM »
Oh, and I'm 29. I paid off my loans within 2.5 years of graduating.

Here are the end of year balances:

2010 $20,254.44
2011 $16,301.26
2012 $0 (Paid off 01Dec2012)

I've also never had a car payment or credit card debt. We're not all bad!

Gotta give a bit of a poke in the eye(Pod): 24, no debt. No loans to pay off, no car payments thanks to having a nearly 10 year old car now. No mortgage, no credit card debt. Thankfully I found MMM early!

eyePod

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Re: faced with the reality of most 20-something spending . . .
« Reply #42 on: December 18, 2014, 07:52:01 AM »
Oh, and I'm 29. I paid off my loans within 2.5 years of graduating.

Here are the end of year balances:

2010 $20,254.44
2011 $16,301.26
2012 $0 (Paid off 01Dec2012)

I've also never had a car payment or credit card debt. We're not all bad!

Gotta give a bit of a poke in the eye(Pod): 24, no debt. No loans to pay off, no car payments thanks to having a nearly 10 year old car now. No mortgage, no credit card debt. Thankfully I found MMM early!

I also have to thank my parents. They wouldn't let me have a credit card during college (probably a good thing) and paid for 4 years of my 5 year degree. Now, I got an MS in engineering (no extra cost) and had 3 6-month internships plus worked at least 4 different part time jobs throughout college.

But good on you for being so far ahead!

Pooperman

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Re: faced with the reality of most 20-something spending . . .
« Reply #43 on: December 18, 2014, 08:13:01 AM »
Oh, and I'm 29. I paid off my loans within 2.5 years of graduating.

Here are the end of year balances:

2010 $20,254.44
2011 $16,301.26
2012 $0 (Paid off 01Dec2012)

I've also never had a car payment or credit card debt. We're not all bad!

Gotta give a bit of a poke in the eye(Pod): 24, no debt. No loans to pay off, no car payments thanks to having a nearly 10 year old car now. No mortgage, no credit card debt. Thankfully I found MMM early!

I also have to thank my parents. They wouldn't let me have a credit card during college (probably a good thing) and paid for 4 years of my 5 year degree. Now, I got an MS in engineering (no extra cost) and had 3 6-month internships plus worked at least 4 different part time jobs throughout college.

But good on you for being so far ahead!

I also had mega help. I did have a credit card in college, but I used it for rewards and had positive net worth the whole time haha. But yeah, parents paid for my 3.5 years of school, gave me their old car. Got fired from my first job 'cause my boss was an ass, but I've found a better place to be. BS for me in a field I'm not even using even slightly (engineering physics, I do IT).

Luck12

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Re: faced with the reality of most 20-something spending . . .
« Reply #44 on: December 18, 2014, 08:56:21 AM »
http://www.washingtonpost.com/opinions/catherine-rampell-the-coming-of-age-ritual-of-spend-now-save-later/2014/11/13/5fd9314e-6b73-11e4-a31c-77759fc1eacc_story.html

Leaving this graph here to show that bad savings habits for young people has been going on for decades, it's not something new and today's young people are actually a little better than young people 20+ years ago, both in absolute savings rates and considering economic circumstances.   

MgoSam

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Re: faced with the reality of most 20-something spending . . .
« Reply #45 on: December 18, 2014, 09:30:51 AM »
Speaking as someone in his 20s (currently 27), I recommend encouraging them to read "The Millionaire Next Door," by Stanley. This book opened my eyes, and helped me to drastically cut my spending and increase my investing. It also changed the way I view the world, growing up I had always felt some envy towards those that drove flashy cars, or were buying the newest gadgets, but while I felt envy, I never truly wanted those items. I just wanted the status that they indicated, and once I realized this, it was much easier for me to stop feeling envious towards them.


One Noisy Cat

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Re: faced with the reality of most 20-something spending . . .
« Reply #46 on: December 18, 2014, 10:43:30 AM »
http://www.washingtonpost.com/opinions/catherine-rampell-the-coming-of-age-ritual-of-spend-now-save-later/2014/11/13/5fd9314e-6b73-11e4-a31c-77759fc1eacc_story.html

Leaving this graph here to show that bad savings habits for young people has been going on for decades, it's not something new and today's young people are actually a little better than young people 20+ years ago, both in absolute savings rates and considering economic circumstances.   

Looking back, when I turned 27, I had $500 in the credit union and about $125 in stock of my local electric company. While these young'uns are making a mistake, it's one a lot of us do when young.

otherbarry

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Re: faced with the reality of most 20-something spending . . .
« Reply #47 on: December 18, 2014, 07:22:39 PM »
How am I supposed to snap chat my friends while riding shotty on the way downtown? What a bunch of gramps in here.

bomgd3

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Re: faced with the reality of most 20-something spending . . .
« Reply #48 on: December 19, 2014, 12:53:50 AM »
I'm 26, and the cell phone thing is definitely true, although I don't think it's limited to just my generation.  There are lots of older folks who also overpay for postpaid smartphone accounts.  However, I do know many peers who basically feel that a $100/month bill is completely normal and don't take the time to understand prepaid even if I try to explain it to them.  I'm on a Verizon prepaid plan which is comparatively luxurious compared to many MMM forum members.  I'm in NH and GSM service is atrocious, so my only choice is Verizon $45/month prepaid.

Pooperman

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Re: faced with the reality of most 20-something spending . . .
« Reply #49 on: December 19, 2014, 04:56:49 AM »
I'm 26, and the cell phone thing is definitely true, although I don't think it's limited to just my generation.  There are lots of older folks who also overpay for postpaid smartphone accounts.  However, I do know many peers who basically feel that a $100/month bill is completely normal and don't take the time to understand prepaid even if I try to explain it to them.  I'm on a Verizon prepaid plan which is comparatively luxurious compared to many MMM forum members.  I'm in NH and GSM service is atrocious, so my only choice is Verizon $45/month prepaid.

Page plus is 30 a month. It's verizon (CDMA/LTE with flashing).