The Money Mustache Community
Around the Internet => Antimustachian Wall of Shame and Comedy => Topic started by: StashDaddy on November 10, 2014, 07:05:19 AM
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http://online.wsj.com/articles/savings-turn-negative-for-younger-generation-1415572405
In my household, we're up to 85%...
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From the article: “But part of youth, the wiring of a young person, is the focus on really short-term gratification.” So this justifies it? What really bothers me about this is people not taking responsibility for themselves/their future selves and not holding themselves accountable. As if our ages are somehow holding us captive and preventing us from not being idiots.
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From the article: “But part of youth, the wiring of a young person, is the focus on really short-term gratification.” So this justifies it? What really bothers me about this is people not taking responsibility for themselves/their future selves and not holding themselves accountable. As if our ages are somehow holding us captive and preventing us from not being idiots.
Someone had to do the wiring in the first place.
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I read this article on my commute this a.m. and found myself shaking my head at some of the people they interviewed, like the young woman who went to the destination bachelorette parties. I wonder where they find these people. Of course, if this behavior is the norm, it may not be that hard.
That said, I guess that spending like this is just more important to these people than gaining their freedom. It is just a question of different priorities and values. I shouldn't judge too much, b/c by the standards of this forum, I am a very free spender. And I accept that I will work longer than is the norm in the MMM universe.
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I just love my generation.
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I read this article on my commute this a.m. and found myself shaking my head at some of the people they interviewed, like the young woman who went to the destination bachelorette parties. I wonder where they find these people. Of course, if this behavior is the norm, it may not be that hard.
Also, destination bachelorette parties? These exist? Maybe she needs new friends...
You must have missed the thread on bachelor parties!
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Did you all pay to read this article or is there a way around this paywall I am unaware of?
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Access it through Google:
https://www.google.com/search?q=Younger+Generation+Faces+a+Savings+Deficit&oq=Younger+Generation+Faces+a+Savings+Deficit&aqs=chrome..69i57j69i60.3835j0j4&sourceid=chrome&es_sm=0&ie=UTF-8
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The Fed’s data also show young Americans are less likely to own a variety of investments and investment accounts than their counterparts in Generation X were at this age, including certificates of deposit, savings bonds, stocks, retirement accounts and other managed assets. The only savings vehicles young people today use more than Generation X did at the same age are transaction accounts.
“They are truly a vulnerable group,” said Annamaria Lusardi, an economist at George Washington University who studies the implications of financially fragile young households. “They don’t have assets to buffer themselves against shocks, and they also have to manage debt.”
Let's see....rack up debt like a drunken sailor, no wait, that's not fair to drunk sailors, since at least they learn their skills in the Navy without going into debt, many of which are actually useful, unlike a $100k double major in Religion and Women's Studies from NYU (google it if you don't get the reference).....then piss away what you do manage on stupid shit, as noted in the article.
But remember, according to that genius /snark/ Helaine Olen and the Billfold, savings are not the way to wealth.
http://forum.mrmoneymustache.com/antimustachian-wall-of-shame-and-comedy/the-billfold-you-dont-get-wealthy-from-saving/
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Most of my fellow millennials that I know save nothing or close to it, and are in debt. They're also the biggest ER naysayers and genuinely believe that NOT going out to restaurants and bars constantly, buying lunch every day at work, and buying the latest electronics is some sort of horrible existence. It's just such an alien way of thinking to me.
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Access it through Google:
https://www.google.com/search?q=Younger+Generation+Faces+a+Savings+Deficit&oq=Younger+Generation+Faces+a+Savings+Deficit&aqs=chrome..69i57j69i60.3835j0j4&sourceid=chrome&es_sm=0&ie=UTF-8
Love it, thanks!
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Wait, how can they worry about millenials savings rates right now... did they miss the part on their own chart where every age cohort is living beyond their means (05-08) and how even with the spike the trend is heading right back down to zero for the older groups?
I fail to see how people under the age of 30 having a negative savings rate is bucking the US trend. Its 09-12 part that bucks the trend.
Welcome back to the way things were before.... we have a crappy savings rate again! As a millenial, I find the constant news stories that we are special to be some combination of click-bate and grasping for our money/attention.
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Oh, god, the comments section!!!! The article didn't bother me nearly as much as the stupidity and pure ignorance of some of those posting in the comments. Now I've got to go out for a run to get my blood pressure down.
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Yeah, this may be a problem for many of them. I do have some sympathy towards my young brethren, as it can indeed by difficult to save once you out of college. Here are some factors that they are facing.
a. Living on their own for the first time (wasn't easy for me).
b. Trying to find a job
c. Student debts
d. Lifestyle influences
That said, they can make their own priorities. I do go out from time to time, but I am very keen on cutting my expenses down as much as I can. I have had some great advantages early in life that have made it easier for me to save, such as saving on rent by living at home for a few years, but there must be a habit of saving/investing, once you get that, it will be so much easier for your entire life.
While it is easy to neg the 2% savings rate, if it means that people are investing, hopefully it will be a positive sign. Many are amazed to hear that I plan on retiring in a decade, until they realize that I have been saving for many years, and that they can do it too.
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the comments section is just full of morons
the feds are keeping rates low so putting money in savings nets you close to 0% return right now.
man people are just dumb.
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the comments section is just full of morons
the feds are keeping rates low so putting money in savings nets you close to 0% return right now.
man people are just dumb.
Yep. Economics people don't want to incentivize hoarding money when the general economy is lagging. They want your money to help businesses.
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I hate to wag my finger since I didn't start saving until I was 27 (no IRAs until then). But at least I had minimal debts and a job with a pension. I realize a lot of them have heavy debts. But they also have great savings instruments and time on their side.
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I hate to wag my finger since I didn't start saving until I was 27 (no IRAs until then). But at least I had minimal debts and a job with a pension. I realize a lot of them have heavy debts. But they also have great savings instruments and time on their side.
Amen! Just today I commented to a friend of mine that I wished Betterment had been around when I was in my twenties. I'd probably have twice the net worth I have now.
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I don't know if this is the entire story, I mean yes it's true but looking at the graph, it looks like it started dropping in about 2012, or 4 years after 2008. Recession in 2008, people went to school because of no jobs, they graduate 4 years later (2012) and now the tuitions are no longer deferred. I don't know if past generations came out of college with no debt or not but the graph with the networth shows about a -$7k difference between networth/debt which isn't all that much if they spent the last 4 years in school full time (most don't work full time at same time)
too bad I can't read it even from google link above, still wants me to login/subscribe
@honey, why betterment? Wouldn't just investing have worked? I mean I don't think betterment gets better returns than if you had did it yourself and learned things like AA/index/etc. But I haven't used betterment either, it just reminds me of using a target date fund/lifestyle fund or something that has a sliding AA until a date or a set AA
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I don't really like being lumped in as millennial. I was born in the late 80s.
I'm not making an excuse for reckless spending but I will say that it is hard to learn about your finances. My parents being immigrants they scrimped and saved away into RRSPs and the like but I don't think they were all that savvy with what other products were in the market place.
Everything I know about money I had to go out and learn on my own. I feel like financial advisers at the bank aren't out for your best interests, just whatever gets them the most points to their bonus. So where do you turn? To the internet. To MMM and the like. But it's definitely not easy. And at least in Canada, they don't educate you at all about personal finances in K-12.
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some combination of click-bate and grasping for our money/attention.
It's usually spelled 'click-bait,' but your spelling brings out a different meaning that I really appreciate. I guess I do spend most of my time online clickbating.
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some combination of click-bate and grasping for our money/attention.
It's usually spelled 'click-bait,' but your spelling brings out a different meaning that I really appreciate. I guess I do spend most of my time online clickbating.
Hahaha!
+1
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I think Millennials are facing a perfect storm of Internet Age self-obsession and constant catastrophic doom-mongering in the media which has led them to say "Fuck it all! The world is going to shit and I deserve good things. I think I'll get a few shots of dopamine in my brain by getting bottle service at an exclusive club and buying new clothes and a fast car." In the process, they are completely screwing up their futures, but they don't even realize it because they don't think that there is going to be a future at all.
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It looks like the savings rates for all of the age groups run in parallel. Doesn't it seem likely that the youngest workers also have the lowest incomes?
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I don't really like being lumped in as millennial. I was born in the late 80s.
I'm not making an excuse for reckless spending but I will say that it is hard to learn about your finances. My parents being immigrants they scrimped and saved away into RRSPs and the like but I don't think they were all that savvy with what other products were in the market place.
Everything I know about money I had to go out and learn on my own. I feel like financial advisers at the bank aren't out for your best interests, just whatever gets them the most points to their bonus. So where do you turn? To the internet. To MMM and the like. But it's definitely not easy. And at least in Canada, they don't educate you at all about personal finances in K-12.
But you guys have Gail from Til Debt Due Us Part!
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It looks like the savings rates for all of the age groups run in parallel. Doesn't it seem likely that the youngest workers also have the lowest incomes?
+1. But you know it's easier to just pile on the Milliennials. I'm sure 20-30 yr olds were not any better at saving money relative to older generations back in the 80's or 90's.
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Every Millenial in my family is adorable and I love em to pieces. .....
But they've all found money for tattoos and pot and tanning.
The ladies all get pedicures and the fellas all have fantasy football teams.
They aren't wasting money on cable or cell phone plans.....their folks pay that. But they do drive nicer cars and drink fancier stuff (wine, craft beer or designer water) than I ever did.
It pains my eyes to keep theem from rolling when they talk of struggling to pay for tickets to SXSW or Bonnarro; and why they'll never be able to buy a home or save for retirement or even move out of mom's house and make their own breakfast. But I do it because they are good kids. Naive, but good. And if there's one thing I figured out about human nature is that it doesn't help to lecture or detail someone else's faults.
They'd share their stache in a heartbeat, too, if I wanted a smoke. Like I said, good kids.
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I think Millennials are facing a perfect storm of Internet Age self-obsession and constant catastrophic doom-mongering in the media which has led them to say "Fuck it all! The world is going to shit and I deserve good things. I think I'll get a few shots of dopamine in my brain by getting bottle service at an exclusive club and buying new clothes and a fast car." In the process, they are completely screwing up their futures, but they don't even realize it because they don't think that there is going to be a future at all.
I think you just nailed it
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I don't really like being lumped in as millennial. I was born in the late 80s.
I'm not making an excuse for reckless spending but I will say that it is hard to learn about your finances. My parents being immigrants they scrimped and saved away into RRSPs and the like but I don't think they were all that savvy with what other products were in the market place.
Everything I know about money I had to go out and learn on my own. I feel like financial advisers at the bank aren't out for your best interests, just whatever gets them the most points to their bonus. So where do you turn? To the internet. To MMM and the like. But it's definitely not easy. And at least in Canada, they don't educate you at all about personal finances in K-12.
Well, your last sentence is not accurate, they do educate about personal finances in k-12. I know because I've taught financial literacy and many of my colleagues have as well. It's also in the Ontario curriculum in many places. In fact, financial literacy can be found in every Ontario curriculum document you can find.
Kids being kids however, well, they're not always great with money. Add to that changing societal norms (witness the explosion of pay-day lenders in Canada) and general money idiocy with the masses and you have issues. There is also increasing evidence to suggest that financial literacy taught in schools has almost no effect on decisions made as an adult-financial literacy must be a "just in time" event.
Food for thought, it might not be the fault of teachers that people can't get their shit together.
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Deano, I don't think it is taught in american schools though, not much at least. But if I had to guess a lot of the class taught how to balance a checkbook? Or did it teach investing for future as well?
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I don't really like being lumped in as millennial. I was born in the late 80s.
I'm not making an excuse for reckless spending but I will say that it is hard to learn about your finances. My parents being immigrants they scrimped and saved away into RRSPs and the like but I don't think they were all that savvy with what other products were in the market place.
Everything I know about money I had to go out and learn on my own. I feel like financial advisers at the bank aren't out for your best interests, just whatever gets them the most points to their bonus. So where do you turn? To the internet. To MMM and the like. But it's definitely not easy. And at least in Canada, they don't educate you at all about personal finances in K-12.
Well, your last sentence is not accurate, they do educate about personal finances in k-12. I know because I've taught financial literacy and many of my colleagues have as well. It's also in the Ontario curriculum in many places. In fact, financial literacy can be found in every Ontario curriculum document you can find.
Kids being kids however, well, they're not always great with money. Add to that changing societal norms (witness the explosion of pay-day lenders in Canada) and general money idiocy with the masses and you have issues. There is also increasing evidence to suggest that financial literacy taught in schools has almost no effect on decisions made as an adult-financial literacy must be a "just in time" event.
Food for thought, it might not be the fault of teachers that people can't get their shit together.
This is not taught in the States. In fact, students are constantly bombarded with the thought that the only way to escape poverty is with a college degree.
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I don't really like being lumped in as millennial. I was born in the late 80s.
I'm not making an excuse for reckless spending but I will say that it is hard to learn about your finances. My parents being immigrants they scrimped and saved away into RRSPs and the like but I don't think they were all that savvy with what other products were in the market place.
Everything I know about money I had to go out and learn on my own. I feel like financial advisers at the bank aren't out for your best interests, just whatever gets them the most points to their bonus. So where do you turn? To the internet. To MMM and the like. But it's definitely not easy. And at least in Canada, they don't educate you at all about personal finances in K-12.
Well, your last sentence is not accurate, they do educate about personal finances in k-12. I know because I've taught financial literacy and many of my colleagues have as well. It's also in the Ontario curriculum in many places. In fact, financial literacy can be found in every Ontario curriculum document you can find.
Kids being kids however, well, they're not always great with money. Add to that changing societal norms (witness the explosion of pay-day lenders in Canada) and general money idiocy with the masses and you have issues. There is also increasing evidence to suggest that financial literacy taught in schools has almost no effect on decisions made as an adult-financial literacy must be a "just in time" event.
Food for thought, it might not be the fault of teachers that people can't get their shit together.
This is not taught in the States. In fact, students are constantly bombarded with the thought that the only way to escape poverty is with a college degree.
I work as a teacher and my school does offer a basic course in personal finance to teach kids about bank accounts and how credit works and how investments work. This was not offered in my high school when I was growing up and I don't think it is a feature of most other American high schools.
I agree 100% that it's ridiculous that college is being pushed on every student. My students are constantly being told that they will never make anything of themselves if they don't go to college, when many of them have the aptitude and interest to go into skilled trades instead. It really feels like I am being forced to push these kids toward the burden of huge student loans and the payback from a college degree just isn't what it used to be unless you go into STEM, business, or fields like accounting.
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I don't really like being lumped in as millennial. I was born in the late 80s.
I'm not making an excuse for reckless spending but I will say that it is hard to learn about your finances. My parents being immigrants they scrimped and saved away into RRSPs and the like but I don't think they were all that savvy with what other products were in the market place.
Everything I know about money I had to go out and learn on my own. I feel like financial advisers at the bank aren't out for your best interests, just whatever gets them the most points to their bonus. So where do you turn? To the internet. To MMM and the like. But it's definitely not easy. And at least in Canada, they don't educate you at all about personal finances in K-12.
But you guys have Gail from Til Debt Due Us Part!
I miss Gail. After I cut cable, I couldn't get her show anymore. I'm so sad, and I go to the website for it and I'm blocked for not being Canadian.
My millenial coworkers are pretty good savers. One guy lives with his parents (has a long commute though), but is saving BANK and brings his lunch every day. He's 26.
Another guy is 26, almost 27, and is closing on a house this week with his girlfriend. Now, he is going to have to commute because he cannot afford to live in this town either, but I'm impressed that he's buying a house so young.
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I don't really like being lumped in as millennial. I was born in the late 80s.
I'm not making an excuse for reckless spending but I will say that it is hard to learn about your finances. My parents being immigrants they scrimped and saved away into RRSPs and the like but I don't think they were all that savvy with what other products were in the market place.
Everything I know about money I had to go out and learn on my own. I feel like financial advisers at the bank aren't out for your best interests, just whatever gets them the most points to their bonus. So where do you turn? To the internet. To MMM and the like. But it's definitely not easy. And at least in Canada, they don't educate you at all about personal finances in K-12.
Well, your last sentence is not accurate, they do educate about personal finances in k-12. I know because I've taught financial literacy and many of my colleagues have as well. It's also in the Ontario curriculum in many places. In fact, financial literacy can be found in every Ontario curriculum document you can find.
Kids being kids however, well, they're not always great with money. Add to that changing societal norms (witness the explosion of pay-day lenders in Canada) and general money idiocy with the masses and you have issues. There is also increasing evidence to suggest that financial literacy taught in schools has almost no effect on decisions made as an adult-financial literacy must be a "just in time" event.
Food for thought, it might not be the fault of teachers that people can't get their shit together.
This is not taught in the States. In fact, students are constantly bombarded with the thought that the only way to escape poverty is with a college degree.
My second grader has to pay rent for his desk via"bear bucks" he earns for various things in class. they can either spend the bear bucks in the class store or save them for better things. This is in Texas- so they are starting early teaching budgeting and some level of personal finance here.
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I wonder if the savings during the recession is just a result of banks tightening access to credit. I know a lot of them started lowering limits, canceling cards, terminating HELOCs, etc.
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My second grader has to pay rent for his desk via"bear bucks" he earns for various things in class. they can either spend the bear bucks in the class store or save them for better things. This is in Texas- so they are starting early teaching budgeting and some level of personal finance here.
out of curiosity, does desk get foreclosed on if he cant pay rent?
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My second grader has to pay rent for his desk via"bear bucks" he earns for various things in class. they can either spend the bear bucks in the class store or save them for better things. This is in Texas- so they are starting early teaching budgeting and some level of personal finance here.
out of curiosity, does desk get foreclosed on if he cant pay rent?
It's texas, so he probably gets a woopin'
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It looks like the savings rates for all of the age groups run in parallel. Doesn't it seem likely that the youngest workers also have the lowest incomes?
Absolutely true. I've seen unions that keep lowering the starting salaries and also increasing the credentials required to get in. No shit that they're going to save less.
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Food for thought, it might not be the fault of teachers that people can't get their shit together.
I think we can all agree it's a systemic issue. No one individual's fault.
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This article sums up my peers perfectly, I hear so many whining about not having money for bills but they smoke, drink, lease/buy cars that are more than a years worth of gross salary, eat breakfast from a deli, lunch from a food truck, happy hour on the regular, blow $100+ dollars at the bar on a football Sunday........yea no money for bills...... -_-
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I hate the way millennials get slammed in the media for sucking. Is it surprising that a generation with higher unemployment, lower wages, and insane student debt is having a hard time saving? Couple those factors with typical societal pressures and you have a recipe for disaster!
That being said, I know a lot of my college classmates are saving far above average. My personal rate is a meager 12%, but we plan to ratchet it up to around 35% over the next 5 years. There is hope, educate those who are curious and lead by example.
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Let's see....rack up debt like a drunken sailor, no wait, that's not fair to drunk sailors, since at least they learn their skills in the Navy without going into debt, many of which are actually useful, unlike a $100k double major in Religion and Women's Studies from NYU (google it if you don't get the reference).....then piss away what you do manage on stupid shit, as noted in the article.
I'll just leave this here... http://newstalkkit.com/drunken-sailor-objects-to-comments-about-obamas-spending-funny/
It was written about congress, but I think it applies in this situation as well..
Objection from a former sailor
To the editor:
I object and take exception to everyone saying that Obama and Congress are spending money like a drunken sailor. As a former drunken sailor, I quit when I ran out of money.
Bruce L. Hargraves
USN Retired
Worland
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I don't really get the way the US media acts like student loan debt is some crushing problem. I can't access the article anymore, but I remember it saying that the average debt was only like $30k or less. If your post-university job doesn't allow you to save that much per year, university wasn't a very good investment.
For some reason a $30k loan on a mid-level Subaru is considered fine to pay off over five years, but $30k for an education that should drastically increase your earning power for the next four or five decades is an insurmountable, lifelong burden.
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I don't really get the way the US media acts like student loan debt is some crushing problem. I can't access the article anymore, but I remember it saying that the average debt was only like $30k or less. If your post-university job doesn't allow you to save that much per year, university wasn't a very good investment.
A debt that you can pay off in a single year really isn't a big deal. But with typical student loan interest rates, there's also no real need to pay it off. I have no plans to pay off my student loans any sooner than required. Typical interest rates are 3-4% with very small minimum payment requirements, making it an excellent arbitrage opportunity. I expect to still have student loans throughout retirement.
They're probably referring to people like me with six figure student loan debt at interest rates up into double digits and nearly $20k of interest paid each year. I've since refinanced and am making much faster progress, but it's been tough. I know a few people with similar amounts owed and you see quite a few here of them here.
$30k or whatever the median student loan debt is trivial even if at a high rate just refinance and knock it out in a couple years without even having to live a particularly Mustachian lifestyle. Or perhaps shelling out thousands every month for years and barely denting principal has just altered my thoughts on what is a significant vs trivial amount of money.
The problem the media ignores is that tuition rates have been skyrocketing ($5k-$10 yr when I was in school). Schools can charge whatever they want because government ensures banks have little to no risk lending large unbacked amounts to young adults with little or no income or assets. If banks were exposed to risk they would not lend such large amounts unbacked and the amount they would lend would likely vary based on income, assets, major and maybe other factors. Tuition would be reasonable, except at the big name schools marketed to the rich that have always been prohibitively expensive for the masses. Quality of education would increase and price would decrease... But without competition, quality decreases and price increases.
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I hate the way millennials get slammed in the media for sucking. Is it surprising that a generation with higher unemployment, lower wages, and insane student debt is having a hard time saving? Couple those factors with typical societal pressures and you have a recipe for disaster!
That being said, I know a lot of my college classmates are saving far above average. My personal rate is a meager 12%, but we plan to ratchet it up to around 35% over the next 5 years. There is hope, educate those who are curious and lead by example.
I don't really get the way the US media acts like student loan debt is some crushing problem. I can't access the article anymore, but I remember it saying that the average debt was only like $30k or less. If your post-university job doesn't allow you to save that much per year, university wasn't a very good investment.
A debt that you can pay off in a single year really isn't a big deal. But with typical student loan interest rates, there's also no real need to pay it off. I have no plans to pay off my student loans any sooner than required. Typical interest rates are 3-4% with very small minimum payment requirements, making it an excellent arbitrage opportunity. I expect to still have student loans throughout retirement.
I think you're overestimating how much the AVERAGE college graduate makes with how much the AVERAGE engineer or other high-earning graduate makes. Lots of these folks barely make $30k their first year out, if they can even get a job. And I dunno about your typical interest rates, but my government-backed Stafford loans originated at 6.8, with Parent PLUS loans at 7.9, with no official way to refinance to the now-lower interest rates.
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Personally my sense of what counts as "trivial" has gone dramatically up over the years from a combination of (a) large investment gains and loses, (b) having jobs that pay 4 or 5 times the US median, (c) having to pay more in taxes than many Americans make per year, (d) having to pay thousands of dollars per month for a modest 1 bedroom apartment.
Personally I also feel like $30k is fairly trivial.
The only one that plagues new graduates is D. With that in mind, $30k is far from trivial.
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I think personal responsibility is very important. I am not saying that the low net worth, low saving millennial individuals who are being typified in this article have not made poor decisions and are not responsible for their predicament. But I think it is important to think about context.
People who have grown up since the 80s have been bombarded for their entire life with marketing messages pushing consumption. The fact that consumption is now a defining feature of the character is hardly surprising. In fact for every company that engages in consumer advertising, this was the desired outcome! I think parents of the millennial generation have been utterly un-prepared for the intensity and volume of extra-familial social conditioning that has been part of their children's lives. Parents wanting to support and nurture kids in a post war error have raised them with the belief that they can "have it all" while the marketing machine has been quick to pick up and define "all" as all of the trappings, and not all of the fulfillment that our parents might have been referring to.
Among the tut-tutting of the less financially literate, be they millennial or not, we should consider what we are doing to either endorse or refuse consumer culture in our communities. All of us who are reaching great levels of success and financial freedom working for consumer sucker product producing companies, or living a comfortable life in FIRE of the earnings of such companies, should consider the maxim of "first do no harm".
/rant
sorry team. rant over. I know many people here to a lot to lead by example in trying to make their families and communities a better place.
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I think personal responsibility is very important. I am not saying that the low net worth, low saving millennial individuals who are being typified in this article have not made poor decisions and are not responsible for their predicament. But I think it is important to think about context.
People who have grown up since the 80s have been bombarded for their entire life with marketing messages pushing consumption. The fact that consumption is now a defining feature of the character is hardly surprising. In fact for every company that engages in consumer advertising, this was the desired outcome! I think parents of the millennial generation have been utterly un-prepared for the intensity and volume of extra-familial social conditioning that has been part of their children's lives. Parents wanting to support and nurture kids in a post war error have raised them with the belief that they can "have it all" while the marketing machine has been quick to pick up and define "all" as all of the trappings, and not all of the fulfillment that our parents might have been referring to.
Among the tut-tutting of the less financially literate, be they millennial or not, we should consider what we are doing to either endorse or refuse consumer culture in our communities. All of us who are reaching great levels of success and financial freedom working for consumer sucker product producing companies, or living a comfortable life in FIRE of the earnings of such companies, should consider the maxim of "first do no harm".
/rant
sorry team. rant over. I know many people here to a lot to lead by example in trying to make their families and communities a better place.
I really feel sorry for Millennials because they were raised for their entire lives being told that they should find a job doing something that they love and the money will follow. This is what they were taught from birth by parents and schools, so most of them believed it. When they got to college, they decided to get degrees in Literature or Art or Theatre or Women's Studies or Philosophy, expecting that these degrees would lead them to some kind of career, because this is what they loved. The awful truth is that careers are just jobs that people do to earn money so they can do what they actually love on evenings and weekends. It's easy to blame Millennials for what has happened to them, but, honestly, they were set up from birth to have all these problems because people were unwilling to teach them the harsh truths about life.
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Two things...millenials are typically classified as those born between 1980-2000. That means the youngest millenials are freshmen in highschool. The article claims to only consider "adults under 35" of course, but 41% of 18-24 year olds are enrolled in college as of 2012. http://nces.ed.gov/programs/digest/d13/tables/dt13_302.60.asp (http://nces.ed.gov/programs/digest/d13/tables/dt13_302.60.asp) And while I'm sure someone will pop out of the woodwork saying they got straight As at a top college while working 60 hrs a week to pay tuition...can we accept this isn't the norm?
Then we have several years-worth (if we assume approximately constant birth rates), that are just out of college and probably paying down their loans rather than saving. Unless there is a company 401k match (not an option in underemployment that many millenials are almost certainly experiencing), most people on this forum would advocate paying off student loans ASAP over significant saving, and in fact debt repayment typically gets lumped in with savings rate here. I doubt that was the case for this study.
I'm not saying people from this (my) generation don't make stupid choices...but you can't paint a whole generation with a "bad decisions" brush based on an anecdote in an article. As a generation, we haven't had time to figure things out and overcome the initial obstacle(s) that faced us uniquely, like the recession and student loan debt.
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My second grader has to pay rent for his desk via"bear bucks" he earns for various things in class. they can either spend the bear bucks in the class store or save them for better things. This is in Texas- so they are starting early teaching budgeting and some level of personal finance here.
out of curiosity, does desk get foreclosed on if he cant pay rent?
It's texas, so he probably gets a woopin'
Hahaha!
I just asked him. They garnish wages if you can't pay rent. And they get paid weekly but pay rent biweekly, forcing them to think ahead. They have the opportunity to buy little toys, or extra time in the computer lab, etc.
It's a start!
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Deano, I don't think it is taught in american schools though, not much at least. But if I had to guess a lot of the class taught how to balance a checkbook? Or did it teach investing for future as well?
In Ontario Financial Literacy is cross curricular, it's not just one class. There are classes that focus a lot on these things however. I taught basic banking and budgeting, how the stock market works (stocks, bonds, etf's etc), credit, the nature of taxation (what it pays for in Canada and how income tax is progressive-tax brackets, that sort of thing), RRSP's, TFSA's, how to spot a scam, how to avoid pay-day lenders, retirement related finances. The students really loved it, I made it real world as much as possible-I had some students say it was the most important thing they learned in school. I would disagree with that (basic literacy, critical literacy, essential numeracy-all more important!), but it was nice to hear.
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Yet another millenial slam piece.
Can somebody explain to me why the article focused solely on millenials? A savings rate of 2.6% for the 35-44 age bracket is just as pathetic, if not more so.
This millenial saves in excess of 50% of my income, so there.
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As a Millenial (crib of '88) the lack of opportunity mixed with shitty choices (a -2% savings rate is a choice) of my generation really worry me.
Eventually these people are going to be a voting bloc that politicians cater to. I can see many of my millenial friends heartily supporting policies that change investing for the worse. Imagine if we had to live like our European brothers, and the only thing the government let us invest in was annuities??
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Step 1: Don't teach kids how to deal with money
Step 2: Make them go to college, give them easy access to lots of money to fund things that often won't turn into careers, let alone well-paying ones
Step 3: Blame them for not having money
I want one, just one anecdotal story about the guy or gal whose parents taught them from an early age how to manage money, who graduated school with minimal debt or chose a trade, who used their education to get a job, and then struggle making ends meet. And to up it up a notch, don't tell me about the ones who spend all their after-expenses cash on stupid shit - let's face it, being young is the best time to buy a bike and go to hawaii, it's pretty understandable even if you call it silly - but those who spend all their pre-expenses cash and then can't pay their necessary expenses.
Nah, you know what really sells ads? Telling a bunch of 40-somethings and 50-somethings about how the next generation is worthless, while the 40-50 morons buy houses they can't afford, and eat up the rest of their disposable income with SUVs and jewelry and vacations to tropics and ski resorts.
http://www.dailyfinance.com/2012/11/14/retirement-savings-by-age-how-do-you-compare/
Ages 45-54
Among 45- to 54-year-olds, the majority (56%) had savings of between $25,000 to $499,999. The median saved in this age range was $101,000.
A full fifth of respondents in this age group had $100,000 to $249,999 saved for retirement, making this the top answer for people of these ages.
But, unfortunately, a slightly smaller percentage had more than half a million saved than in the 33 to 44 age group: 6% in this age group have over half a million while 8% in the lower age group have that much.
Also, 15% still have savings of $24,999 or less, which indicates they need to focus heavily on saving until they retire.
Yeah, 50% have under a hundred grand in the 45-to-54 age group. (Granted, two-year-old article, anyone have a more recent one?)
And I guarantee that if you tell the -2% savings rate statistic to the 45-to-54 age group, at least 90% will answer with contempt and ego-stroking. Because they did such a great job.
Click. Fucking. Bait. Dishonest and mostly garbage. The day I see any older generation doing better than the younger one at anything important, I'll be impressed. It happens occasionally, certainly, and I get impressed. But saving, in the USA, sure as hell ain't one.
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Someone had to do the wiring in the first place.
I think it was God. Seriously, brain research does show that teens don't fully have the ability to think through long-term consequences and recognize risky behavior yet. Don't miss the qualifying statement: This ability isn't fully developed until 22, 23, 24 -- and later for men than for women. Don't twist that into an extreme statement. And obviously a child who's taught to accept the consequences of his actions is going to stronger in this regard than a kid who's been coddled and allowed to blame everyone else.
Every season in life is high-spending if you are a high spender.
I agree with that. It makes me think of the SpongeBob cartoon where they each have a candy bar that has to last them the rest of their lives, and Patrick says, "I think I'll eat mine now." So typical of our society's spending: I want ____ now, and I don't care about later.
However, I'm a little older than most posters here, so I've lived through the college years . . . and the newlywed, just-bought-a-house years . . . and the small children years . . . and now my youngest is about to start college, so I can say this with some authority:
It's not so hard to be frugal in college. You're expected to be broke.
It's not so hard to be frugal right out of college. You're expected to earning an entry-level salary and saving for a house. You're expected to furnish it in hand-me-downs-and-thrift store.
The small children phase is expensive, but you get through it.
Your kids' elementary and middle school years should be prime savings years.
Your kids' teenaged years are going to be expensive; you really need to have your financial act together by that point. It's harder to find used clothing, they eat more, braces are expensive, their activities are expensive, and you need to teach them to drive. All that adds up. Those were our most expensive years -- more expensive than day care, more expensive than college.
Your kids' college years will be expensive, and borrowing only postpones/increases the cost. This is pretty much equal to the small children phase -- you're spending money all the time, but I can see an end to these years.
Yes, yes, you can choose not to do this or that -- that's not really the point here. Some times of your life really are more expensive.
I read this article on my commute this a.m. and found myself shaking my head at some of the people they interviewed, like the young woman who went to the destination bachelorette parties. I wonder where they find these people. Of course, if this behavior is the norm, it may not be that hard.
Some of my coworkers attend these things. I do think today's 20-somethings are offered more opportunities to spend recklessly.
Deano, I don't think it is taught in american schools though, not much at least. But if I had to guess a lot of the class taught how to balance a checkbook? Or did it teach investing for future as well?
Personal finance is taught in a number of classes -- not in one lump, but individual ideas in numerous classes. I can see two reasons it "doesn't take": 1) Use it or lose it. Yeah, they do a whole unit on credit cards and debt in 10th grade Civics, and they do worksheets on how credit card interest can bury you . . . but since they don't have credit cards yet and can't actually USE the information, it's forgotten by the time they really do have a chance to practice it. For some of them, money first seems to be "real" when they're considering college costs -- and that doesn't even seem real to others. 2) In high school kids have the general idea that they're going to make TONS of money, and all this stuff about interest and budgeting just won't apply to them. Seriously, they seem to think that all of them are going to be singers, football players, pharmacists, neurosurgeons, etc. -- even the kids who don't like school, don't read on their own, didn't get a staring role in the school musical, and played second string on the football team.
For some reason a $30k loan on a mid-level Subaru is considered fine to pay off over five years, but $30k for an education that should drastically increase your earning power for the next four or five decades is an insurmountable, lifelong burden.
1. I don't think a 30K car is a wise choice.
2. The real issue is that most people are going to have the 30K student debt ON TOP OF the car payment and the house payment and whatever else. It's not an "instead of" thing.
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One of the first things I learned from my elders was that if one of them bloviated about how superior their generation is compared to succeeding generations they demonstrated two things. The first being they were crotchety bores with minimal contributions to their own generation's alleged greatness. The second being they were irrelevant or fast becoming so.
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I'm a millennial, and I'll be attending several destination bachelorette parties (and weddings, and bridal showers) over the next few years. I went to college in a different state and will travel to where those friends live for their parties/weddings. And I have friends who moved away from where I live that will probably get married where they are now, and again I will travel. It will definitely cut into my savings rate. It'll more significantly cut into my eating out/activity, travel, and cute house things budget for the next few years. So can we stop hating so much on "destination" events? A lot of us just don't live close to each other anymore, though that's not an excuse to not have any savings.
My husband didn't save before we got married. He had twice the average student loan debt and a job making $30k a year including overtime pay. And he was in the hospital 3 times in 2 years, which got expensive for both medical bills and missed work. But I still think he could have been a bit more careful with his budget to get some savings together. Though he was putting 17% of his gross income towards student loans. But now that we're married we save 12% of our income, and put another 27% towards student loans (net).
Also, Mrs.Pete your post confirms my suspicions about the spendier parts of life. Which plays into when I read blogs by people with kids between 5-13 and say their kids aren't expensive to have, who haven't hit high school yet. It can be done cheaply, but it is definitely a way more expensive period of life than middle school and certainly elementary school.
A lot of my friends lack the foresight to plan ahead more than 6 or 8 weeks, and I honestly have no idea how they handle life's more expensive surprises, unless their parents step in. But they say "it's my 20's, this is when I should spend and have fun and etc.!" whereas I'm thinking "this is my 20's, when I should easily save a large % of money if I have an average income because I can go do cheap things and don't have kids to eat up all of my money". But three weeks ago I talked to my grandma about saving money and she said after she and my grandfather got married (shortly after he had bought a small farm they needed to pay off) they didn't take a vacation for 4 years because they didn't have the money-it was more important to pay off the farm and get savings for future problems set up. I don't think a lot of people my age would make that choice.
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2. The real issue is that most people are going to have the 30K student debt ON TOP OF the car payment and the house payment and whatever else. It's not an "instead of" thing.
While true, the media harp on student loan debt like its the end of the financial universe, while the car gets a free pass, like it is a utility bill instead of a choice. I think that was the point infogoon was trying to make
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2. The real issue is that most people are going to have the 30K student debt ON TOP OF the car payment and the house payment and whatever else. It's not an "instead of" thing.
While true, the media harp on student loan debt like its the end of the financial universe, while the car gets a free pass, like it is a utility bill instead of a choice. I think that was the point infogoon was trying to make
Student loan debt is much worse than car/house/other payments. The key differences that make student loan debt the absolute worst is that it is not backed by an asset and it is not dischargeable under bankruptcy. Screw up on that $30k student loan and you could be staring at a $50k or even $100k+ student loan depending on how long it takes you to get your finances under control. This can happen to lazy people with no financial sense and also to those who have reformed to be more frugal if they are fired/injured/disabled/etc. or some string of bad luck. Since the government backs these loans the banks rarely negotiate on them. If you lose everything and file bankruptcy it doesn't matter, the amount they claim just grows and no matter which way it ends up they get far more than the original $30k balance. Student loans are a sure thing for banks, regardless of whether they are paid off early or end up in default and garnish wages indefinitely or any other means of collecting payment.
That doesn't happen with a car, house, or any other loan. The loan either never would have been made in the first place or would be settled under bankruptcy. It would never get to the point student loans get to if you can't make payment. So compared to every other type of loan I'm aware of (including payday loans at exorbitant rates), student loans are the end of the financial universe.
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Deano, I don't think it is taught in american schools though, not much at least. But if I had to guess a lot of the class taught how to balance a checkbook? Or did it teach investing for future as well?
In Ontario Financial Literacy is cross curricular, it's not just one class. There are classes that focus a lot on these things however. I taught basic banking and budgeting, how the stock market works (stocks, bonds, etf's etc), credit, the nature of taxation (what it pays for in Canada and how income tax is progressive-tax brackets, that sort of thing), RRSP's, TFSA's, how to spot a scam, how to avoid pay-day lenders, retirement related finances. The students really loved it, I made it real world as much as possible-I had some students say it was the most important thing they learned in school. I would disagree with that (basic literacy, critical literacy, essential numeracy-all more important!), but it was nice to hear.
This is good to hear. I was born in '81, went through Ontario public education (kindergarten to OAC) and didn't have a single class related to finances, investing, or financial literacy. When was this implemented?
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I think personal responsibility is very important. I am not saying that the low net worth, low saving millennial individuals who are being typified in this article have not made poor decisions and are not responsible for their predicament. But I think it is important to think about context.
People who have grown up since the 80s have been bombarded for their entire life with marketing messages pushing consumption. The fact that consumption is now a defining feature of the character is hardly surprising. In fact for every company that engages in consumer advertising, this was the desired outcome! I think parents of the millennial generation have been utterly un-prepared for the intensity and volume of extra-familial social conditioning that has been part of their children's lives. Parents wanting to support and nurture kids in a post war error have raised them with the belief that they can "have it all" while the marketing machine has been quick to pick up and define "all" as all of the trappings, and not all of the fulfillment that our parents might have been referring to.
Among the tut-tutting of the less financially literate, be they millennial or not, we should consider what we are doing to either endorse or refuse consumer culture in our communities. All of us who are reaching great levels of success and financial freedom working for consumer sucker product producing companies, or living a comfortable life in FIRE of the earnings of such companies, should consider the maxim of "first do no harm".
/rant
sorry team. rant over. I know many people here to a lot to lead by example in trying to make their families and communities a better place.
I really feel sorry for Millennials because they were raised for their entire lives being told that they should find a job doing something that they love and the money will follow. This is what they were taught from birth by parents and schools, so most of them believed it. When they got to college, they decided to get degrees in Literature or Art or Theatre or Women's Studies or Philosophy, expecting that these degrees would lead them to some kind of career, because this is what they loved. The awful truth is that careers are just jobs that people do to earn money so they can do what they actually love on evenings and weekends. It's easy to blame Millennials for what has happened to them, but, honestly, they were set up from birth to have all these problems because people were unwilling to teach them the harsh truths about life.
I wasn't told that. I was told that I should go to school for a high paying job so I don't end up like my previous family generations. Never got the "do what you love" speech.
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One of the first things I learned from my elders was that if one of them bloviated about how superior their generation is compared to succeeding generations they demonstrated two things. The first being they were crotchety bores with minimal contributions to their own generation's alleged greatness. The second being they were irrelevant or fast becoming so.
The third thing to learn from this is that they are exactly typical of every single generation in history. Kids today are always worse than kids yesterday.
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Deano, I don't think it is taught in american schools though, not much at least. But if I had to guess a lot of the class taught how to balance a checkbook? Or did it teach investing for future as well?
In Ontario Financial Literacy is cross curricular, it's not just one class. There are classes that focus a lot on these things however. I taught basic banking and budgeting, how the stock market works (stocks, bonds, etf's etc), credit, the nature of taxation (what it pays for in Canada and how income tax is progressive-tax brackets, that sort of thing), RRSP's, TFSA's, how to spot a scam, how to avoid pay-day lenders, retirement related finances. The students really loved it, I made it real world as much as possible-I had some students say it was the most important thing they learned in school. I would disagree with that (basic literacy, critical literacy, essential numeracy-all more important!), but it was nice to hear.
This is good to hear. I was born in '81, went through Ontario public education (kindergarten to OAC) and didn't have a single class related to finances, investing, or financial literacy. When was this implemented?
Being implemented now. There is a big min of ed push for it right now, well a little less than a year or two ago but it's still on the table. It's in the beginning stages mind you-you would not find this at every high school, but it's getting better.
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And at least in Canada, they don't educate you at all about personal finances in K-12.
There is also increasing evidence to suggest that financial literacy taught in schools has almost no effect on decisions made as an adult-financial literacy must be a "just in time" event.
Food for thought, it might not be the fault of teachers that people can't get their shit together.
This is not taught in the States. In fact, students are constantly bombarded with the thought that the only way to escape poverty is with a college degree.
My second grader has to pay rent for his desk via"bear bucks" he earns for various things in class. they can either spend the bear bucks in the class store or save them for better things. This is in Texas- so they are starting early teaching budgeting and some level of personal finance here.
We have two personal finance electives at the school where I work--they aren't required for students to graduate, but I'm a counselor and recommend students take them. It helps that the teacher has a good reputation with the kids.
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I've got nothing to add except that everyone keeps talking about millenials this and baby boomers that, and my generation, Gen X, feels like the middle child everyone ignores. Bah humbug.
Millenials have large student debt, were pampered as kids, were always "special". Baby boomers lived through the Vietnam War and the chaos of the 60s, inflation of the 70s, and then lived it up and now have no money.
What about us X'ers? Are we too apathetic to even start our own thread lamenting our financial woes? We have our own set of issues and dealt with a recession in the early 90s as we graduated college as well...you know? And we got hit by the housing crash during our peak years. We didn't even have access to the Internet in our formative years!
http://www.payscale.com/career-news/2013/10/is-gen-x-the-lost-generation-
http://op-talk.blogs.nytimes.com/2014/06/11/the-forgotten-generation/?_r=0
EDIT: And can we stop using the term "underemployed"? That's been going on for ages and no one seemed to complain before.
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I think personal responsibility is very important. I am not saying that the low net worth, low saving millennial individuals who are being typified in this article have not made poor decisions and are not responsible for their predicament. But I think it is important to think about context.
People who have grown up since the 80s have been bombarded for their entire life with marketing messages pushing consumption. The fact that consumption is now a defining feature of the character is hardly surprising. In fact for every company that engages in consumer advertising, this was the desired outcome! I think parents of the millennial generation have been utterly un-prepared for the intensity and volume of extra-familial social conditioning that has been part of their children's lives. Parents wanting to support and nurture kids in a post war error have raised them with the belief that they can "have it all" while the marketing machine has been quick to pick up and define "all" as all of the trappings, and not all of the fulfillment that our parents might have been referring to.
Among the tut-tutting of the less financially literate, be they millennial or not, we should consider what we are doing to either endorse or refuse consumer culture in our communities. All of us who are reaching great levels of success and financial freedom working for consumer sucker product producing companies, or living a comfortable life in FIRE of the earnings of such companies, should consider the maxim of "first do no harm".
/rant
sorry team. rant over. I know many people here to a lot to lead by example in trying to make their families and communities a better place.
+1
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2. The real issue is that most people are going to have the 30K student debt ON TOP OF the car payment and the house payment and whatever else. It's not an "instead of" thing.
While true, the media harp on student loan debt like its the end of the financial universe, while the car gets a free pass, like it is a utility bill instead of a choice. I think that was the point infogoon was trying to make
Student loan debt is much worse than car/house/other payments. The key differences that make student loan debt the absolute worst is that it is not backed by an asset and it is not dischargeable under bankruptcy. Screw up on that $30k student loan and you could be staring at a $50k or even $100k+ student loan depending on how long it takes you to get your finances under control. This can happen to lazy people with no financial sense and also to those who have reformed to be more frugal if they are fired/injured/disabled/etc. or some string of bad luck. Since the government backs these loans the banks rarely negotiate on them. If you lose everything and file bankruptcy it doesn't matter, the amount they claim just grows and no matter which way it ends up they get far more than the original $30k balance. Student loans are a sure thing for banks, regardless of whether they are paid off early or end up in default and garnish wages indefinitely or any other means of collecting payment.
That doesn't happen with a car, house, or any other loan. The loan either never would have been made in the first place or would be settled under bankruptcy. It would never get to the point student loans get to if you can't make payment. So compared to every other type of loan I'm aware of (including payday loans at exorbitant rates), student loans are the end of the financial universe.
You're missing the point here...the point is that the "heavy burden laid on millenials by crushing student loan debt that is holding back the recovery" is actually less of a burden than the cost of a new car. $30k in student loan debt paid over 10 years (the standard repayment plan) will be somewhere in the neighborhood of $350/mo (lets not argue over the exact value as I didn't calculate it, but this is close). A $30k car at 0% interest for 60 months (typical financing option available) is $500/mo. Then, once the new car is paid off, you trade it right back in for another new payment. You're telling me that the former is more of a burden than the latter? Maybe SL's are not backed by collateral, and even have more grave consequences for fucking it up (all the more reason to not buy a car to make it easier to fuck it up), but the cars are far more burdensome to a new adult's budget
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2. The real issue is that most people are going to have the 30K student debt ON TOP OF the car payment and the house payment and whatever else. It's not an "instead of" thing.
While true, the media harp on student loan debt like its the end of the financial universe, while the car gets a free pass, like it is a utility bill instead of a choice. I think that was the point infogoon was trying to make
Student loan debt is much worse than car/house/other payments. The key differences that make student loan debt the absolute worst is that it is not backed by an asset and it is not dischargeable under bankruptcy. Screw up on that $30k student loan and you could be staring at a $50k or even $100k+ student loan depending on how long it takes you to get your finances under control. This can happen to lazy people with no financial sense and also to those who have reformed to be more frugal if they are fired/injured/disabled/etc. or some string of bad luck. Since the government backs these loans the banks rarely negotiate on them. If you lose everything and file bankruptcy it doesn't matter, the amount they claim just grows and no matter which way it ends up they get far more than the original $30k balance. Student loans are a sure thing for banks, regardless of whether they are paid off early or end up in default and garnish wages indefinitely or any other means of collecting payment.
That doesn't happen with a car, house, or any other loan. The loan either never would have been made in the first place or would be settled under bankruptcy. It would never get to the point student loans get to if you can't make payment. So compared to every other type of loan I'm aware of (including payday loans at exorbitant rates), student loans are the end of the financial universe.
You're missing the point here...the point is that the "heavy burden laid on millenials by crushing student loan debt that is holding back the recovery" is actually less of a burden than the cost of a new car. $30k in student loan debt paid over 10 years (the standard repayment plan) will be somewhere in the neighborhood of $350/mo (lets not argue over the exact value as I didn't calculate it, but this is close). A $30k car at 0% interest for 60 months (typical financing option available) is $500/mo. Then, once the new car is paid off, you trade it right back in for another new payment. You're telling me that the former is more of a burden than the latter? Maybe SL's are not backed by collateral, and even have more grave consequences for fucking it up (all the more reason to not buy a car to make it easier to fuck it up), but the cars are far more burdensome to a new adult's budget
this is a very interesting point that i have never considered. however i wonder how many new grads get a 30 k car? im not nit picking im actually curious.
personally i screwed up and got a car lease when i first graduated. but that was on like a 14k car. i think payments were like 200 a month. but most grads have no credit and dont even qualify for the 0.9% special financing as you mentioned. but i think this points to a bigger issue than people do no want to acknowledge.
i NEEDEED a car when i first graduated. the city i lived in had no public transit and the cost for me to live in the hood (alone), was cheaper than the price to live with room mates next to my job(better neighborhood ). im sure the math balanced to be honest. ( rent in hood 400, rent near job 2k) but one thing that worked against me was the fact that i was cash poor.
when you are in school, you were typically living in a dorm on a meal plan. you didnt need money for rent, and you didnt have to really worry about transportation, you walked to class the two feet). upon graduation you typically have zero money. so if you are offered your first job: with what money do you purchase a used car out right? how do you afford first last and deposit on that place that is close to your job( but usually cost more). and lets be honest you first payment for the student loan is due like 3 months after you graduate.
unless you get a job and move home, or have parents that give you resources, alot being a new grad is the equivalent of being a dirt poor, no matter how much education you have.
there are baby boomers who go on and on about the part time job they had in school that they used saved up money, pay tuition, blah blah ablah., but can we all be honest that the cost of living vs wages in 2014 are not as favorable as they once were.
kudos to all those boot strap people out there, and i will admit that in my early 20s i didnt make great decisions, but i wish people would stop making it sound simple to be poor.
it costs more to be poor
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this is a very interesting point that i have never considered. however i wonder how many new grads get a 30 k car? im not nit picking im actually curious.
personally i screwed up and got a car lease when i first graduated. but that was on like a 14k car. i think payments were like 200 a month. but most grads have no credit and dont even qualify for the 0.9% special financing as you mentioned. but i think this points to a bigger issue than people do no want to acknowledge.
I also can't think of anyone that had a $30k car starting out either unless that was the cost of it new, 10 years before they actually bought it used. My first car (used) was $10k with something like 3.99% APR with payments right around $200 a month as well and I thought that was expensive at the time as well.
We just bought a car, because my husband graduated. It is used, $7000, $120/month and I am very twitchy about having it. I don't know anyone young with a new car unless mom and dad bought it during college.
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I read this article on my commute this a.m. and found myself shaking my head at some of the people they interviewed, like the young woman who went to the destination bachelorette parties. I wonder where they find these people. Of course, if this behavior is the norm, it may not be that hard.
Also, destination bachelorette parties? These exist? Maybe she needs new friends...
You must have missed the thread on bachelor parties!
Haha, I must have missed that too.
So many of my friends from college live in different towns that a destination bachelorette party might be about the same expense (for the bridesmaids) as a party in the bride's or maid of honor's town. That said, my frugal friends just don't plan them or have them in the days before the wedding itself!
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2. The real issue is that most people are going to have the 30K student debt ON TOP OF the car payment and the house payment and whatever else. It's not an "instead of" thing.
While true, the media harp on student loan debt like its the end of the financial universe, while the car gets a free pass, like it is a utility bill instead of a choice. I think that was the point infogoon was trying to make
Student loan debt is much worse than car/house/other payments. The key differences that make student loan debt the absolute worst is that it is not backed by an asset and it is not dischargeable under bankruptcy. Screw up on that $30k student loan and you could be staring at a $50k or even $100k+ student loan depending on how long it takes you to get your finances under control. This can happen to lazy people with no financial sense and also to those who have reformed to be more frugal if they are fired/injured/disabled/etc. or some string of bad luck. Since the government backs these loans the banks rarely negotiate on them. If you lose everything and file bankruptcy it doesn't matter, the amount they claim just grows and no matter which way it ends up they get far more than the original $30k balance. Student loans are a sure thing for banks, regardless of whether they are paid off early or end up in default and garnish wages indefinitely or any other means of collecting payment.
That doesn't happen with a car, house, or any other loan. The loan either never would have been made in the first place or would be settled under bankruptcy. It would never get to the point student loans get to if you can't make payment. So compared to every other type of loan I'm aware of (including payday loans at exorbitant rates), student loans are the end of the financial universe.
You're missing the point here...the point is that the "heavy burden laid on millenials by crushing student loan debt that is holding back the recovery" is actually less of a burden than the cost of a new car. $30k in student loan debt paid over 10 years (the standard repayment plan) will be somewhere in the neighborhood of $350/mo (lets not argue over the exact value as I didn't calculate it, but this is close). A $30k car at 0% interest for 60 months (typical financing option available) is $500/mo. Then, once the new car is paid off, you trade it right back in for another new payment. You're telling me that the former is more of a burden than the latter? Maybe SL's are not backed by collateral, and even have more grave consequences for fucking it up (all the more reason to not buy a car to make it easier to fuck it up), but the cars are far more burdensome to a new adult's budget
a few people already posted my thoughts, which were that I don't think I know anyone my age with a $30k car, that's insane. along the same lines, student loan debt is something that you take on (or at least start taking on, and then it's emotionally and logistically harder to change tracks once you're halfway through) when you're 17 and likely to be pretty dumb about money, if you're the average 17 year old and your parents don't teach you. buying a $30k car when you're 22 is a whole 'nother level of stupid.
I'm a millennial, and I'll be attending several destination bachelorette parties (and weddings, and bridal showers) over the next few years. I went to college in a different state and will travel to where those friends live for their parties/weddings. And I have friends who moved away from where I live that will probably get married where they are now, and again I will travel. It will definitely cut into my savings rate. It'll more significantly cut into my eating out/activity, travel, and cute house things budget for the next few years. So can we stop hating so much on "destination" events? A lot of us just don't live close to each other anymore, though that's not an excuse to not have any savings.
I'm pretty sure those don't count as "destination" events. I grew up and went to college in Minnesota, and when I go there for a wedding or bachelorette party (which I have) it's expensive for me but that doesn't make it a "destination" event. that would be like, you and most of your family/friends live in Columbus, Ohio, but your bachelorette party is in Las Vegas and you're getting married in Napa.
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While I think getting hung up on the price of the car (and missing the point that the car costs more than the student loans) is inane, I will leave this here:
http://autos.aol.com/article/who-can-afford-the-average-car-price-only-folks-in-washington/
The report by Interest.com shows that Washington, D.C. is the only American metropolitan area in which a family earning the city's median income can afford the average price of a new vehicle, which was $32,086 in 2013, according to Kelley Blue Book. That price equates to a monthly payment of $633, assuming the buyers put 20 percent down, financed for 48 months and principal, interest and insurance did not exceed ten percent of the household's gross income.
Obviously mustachians will have selection bias and NOT have bought a $30k car right out of college...
In my pre-mustachian days, I bought a new car a few short years after graduating college - a 2010 corolla that cost ~$20k...fortunately I was never that into performance cars so I spent a relatively small amount on a new car. Many are not so lucky
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While I think getting hung up on the price of the car (and missing the point that the car costs more than the student loans) is inane, I will leave this here:
http://autos.aol.com/article/who-can-afford-the-average-car-price-only-folks-in-washington/
The report by Interest.com shows that Washington, D.C. is the only American metropolitan area in which a family earning the city's median income can afford the average price of a new vehicle, which was $32,086 in 2013, according to Kelley Blue Book. That price equates to a monthly payment of $633, assuming the buyers put 20 percent down, financed for 48 months and principal, interest and insurance did not exceed ten percent of the household's gross income.
Obviously mustachians will have selection bias and NOT have bought a $30k car right out of college...
In my pre-mustachian days, I bought a new car a few short years after graduating college - a 2010 corolla that cost ~$20k...fortunately I was never that into performance cars so I spent a relatively small amount on a new car. Many are not so lucky
I want to know how they are defining "average car" in this case. If they are taking the average cost of all cars in the current model year where the cheapest are around $15,000 (http://blog.caranddriver.com/the-10-cheapest-new-cars-sold-in-america-for-2014/) and the most expensive is $1.13 million (http://www.digitaltrends.com/cars/dream-wheels-the-top-ten-most-expensive-cars-in-the-world/#/6) you average is going to be higher. However most of your top 10 most popular cars (http://www.edmunds.com/car-reviews/consumers-most-popular.html) appear to be in the $15,000 to $25,000 range. Not exactly cheap, but still a lot less than the $30,000 car.
and for nerds like me, this sets off the median vs mean argument/rant
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I think the amount of student loan debt you obtain should be proportional with your ability to pay it off. Law/Medical school can easily run $150k of debt, but if you come out making $150-200k/year right away and live in a frugal manner, that debt could be easily paid off in 5 years. On the other hand, incurring that much debt with a philosophy or art history degree may not be the best idea.
My wife and I have about $50k student loans outstanding. As federal employees, $35k will be paid off by the government in 4 years, so we're making minimum payment on that. The other $15k will be paid off in January through low long-term capital gains. Without incurring the SLs, we wouldn't be in positions where our combined income is $125k, so to me SLs are dependent on your ability to pay them off. There is no black-and-white answer.
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I'm a little older than a millennial, but I kind of understand based off of my previous experiences why things can be so difficult. First, I don't remember being taught much about personal finance in school at all. I know there were times in a class or two where maybe we filled out a budgeting sheet or something, but it only happened once or twice and it wasn't something I really related to or cared about at the time. I was 16, I had no clue how a future water bill could impact me.
Problem #2: my parents didn't really have great money sense. My parents were big spenders always wanting to keep up with the Jonses. Fancy house, fancy cars, fancy stuff. My mom orders more packages from QVC than I have ever seen. The daily mail consists of about 14 catalogs that she has to buy stuff from. She owns so many clothes and more clothes coming every single day, and her health isn't great, so most days she doesn't even get dressed! My dad made various comments to me about how he has never had more than $500 in savings before, that's what credit cards are for. Also, I was taught that you buy as much house as you can possibly afford. Things like that. I was never taught much about savings, investments, retirement, or even basic money management skills.
Problem #3. My parent's paid for everything, now this sounds amazing, but it backfired. My dad pretty much paid my entire way through school (which was awesome to graduate with no debt). But with that fantastic blessing came a curse. I had no clue how to control myself once I graduated and became a part of the real world, I loved to spend money and always had money to spend. My dad pretty much cut me off once I got my first real job and I was expected to know exactly what to do with my finances after that. I had no spending control, no money management skills and no savings. So what happened? I just continued to spend and spend and spend and spend and spend until I had just as much debt as someone graduating with student loans...
I didn't gain control of myself until I discovered Dave Ramsey and was finally able to have some guidance, get my debt paid off and start learning how to budget and live within my means. From there I branched out reading more and more and eventually discovering MMM which has inspired me even more.
I think there needs to be more support and guidance for kids of all ages. I've seen credit card companies handing out applications on a regular basis at college campuses, but I've never seen anyone handing out fliers to a website such as MMM or Dave Ramsey, or with a booklist of must reads, websites, blogs, etc... to help guide kids the right way.
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I hate the way millennials get slammed in the media for sucking. Is it surprising that a generation with higher unemployment, lower wages, and insane student debt is having a hard time saving? Couple those factors with typical societal pressures and you have a recipe for disaster!
That being said, I know a lot of my college classmates are saving far above average. My personal rate is a meager 12%, but we plan to ratchet it up to around 35% over the next 5 years. There is hope, educate those who are curious and lead by example.
I don't really get the way the US media acts like student loan debt is some crushing problem. I can't access the article anymore, but I remember it saying that the average debt was only like $30k or less. If your post-university job doesn't allow you to save that much per year, university wasn't a very good investment.
A debt that you can pay off in a single year really isn't a big deal. But with typical student loan interest rates, there's also no real need to pay it off. I have no plans to pay off my student loans any sooner than required. Typical interest rates are 3-4% with very small minimum payment requirements, making it an excellent arbitrage opportunity. I expect to still have student loans throughout retirement.
When I was in undergrad my student loans were 6%. Grad loans up to a couple years ago were 6.8%. Yes, some undergrads are not getting rates as low as 3-4% but that is not the majority of us.
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Deano, I don't think it is taught in american schools though, not much at least. But if I had to guess a lot of the class taught how to balance a checkbook? Or did it teach investing for future as well?
In Ontario Financial Literacy is cross curricular, it's not just one class. There are classes that focus a lot on these things however. I taught basic banking and budgeting, how the stock market works (stocks, bonds, etf's etc), credit, the nature of taxation (what it pays for in Canada and how income tax is progressive-tax brackets, that sort of thing), RRSP's, TFSA's, how to spot a scam, how to avoid pay-day lenders, retirement related finances. The students really loved it, I made it real world as much as possible-I had some students say it was the most important thing they learned in school. I would disagree with that (basic literacy, critical literacy, essential numeracy-all more important!), but it was nice to hear.
This is good to hear. I was born in '81, went through Ontario public education (kindergarten to OAC) and didn't have a single class related to finances, investing, or financial literacy. When was this implemented?
"Are you on OSAP?"
Lol ah, I miss being a student....
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I don't really get the way the US media acts like student loan debt is some crushing problem. I can't access the article anymore, but I remember it saying that the average debt was only like $30k or less. If your post-university job doesn't allow you to save that much per year, university wasn't a very good investment.
For some reason a $30k loan on a mid-level Subaru is considered fine to pay off over five years, but $30k for an education that should drastically increase your earning power for the next four or five decades is an insurmountable, lifelong burden.
I'm not sure i follow. If you have a 25k / yr entry job and 30k in student loan debt, you can't afford a $30k subaru.
In other aspects, people have always wasted money on cars and things they don't need.
The perception of education is different. Society says that it's bad that it's expensive because "everyone needs it". They don't. Plenty of good jobs available with 2 yr degrees or less. I'd like the media to start saying "stop wasting money on soft skill degrees like psychology and english"
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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
Someone in this thread strongly suggested if you looked at the young from 20+ years ago, you'd get the same bad savings habits. Oh wait, that was me! And I was right. If anything, the young are better today than 10-20 years ago.
But you know, a headline of "millenials are not quite as bad at savings as 20-30 year olds were in 1995" doesn't get the clicks that "Millenials are terrible savers and the scourge of the Earth" does.
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I don't really get the way the US media acts like student loan debt is some crushing problem. I can't access the article anymore, but I remember it saying that the average debt was only like $30k or less. If your post-university job doesn't allow you to save that much per year, university wasn't a very good investment.
For some reason a $30k loan on a mid-level Subaru is considered fine to pay off over five years, but $30k for an education that should drastically increase your earning power for the next four or five decades is an insurmountable, lifelong burden.
I'm not sure i follow. If you have a 25k / yr entry job and 30k in student loan debt, you can't afford a $30k subaru.
In other aspects, people have always wasted money on cars and things they don't need.
The perception of education is different. Society says that it's bad that it's expensive because "everyone needs it". They don't. Plenty of good jobs available with 2 yr degrees or less. I'd like the media to start saying "stop wasting money on soft skill degrees like psychology and english"
Some of us did just fine with our psych degrees.
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I don't really get the way the US media acts like student loan debt is some crushing problem. I can't access the article anymore, but I remember it saying that the average debt was only like $30k or less. If your post-university job doesn't allow you to save that much per year, university wasn't a very good investment.
For some reason a $30k loan on a mid-level Subaru is considered fine to pay off over five years, but $30k for an education that should drastically increase your earning power for the next four or five decades is an insurmountable, lifelong burden.
I'm not sure i follow. If you have a 25k / yr entry job and 30k in student loan debt, you can't afford a $30k subaru.
In other aspects, people have always wasted money on cars and things they don't need.
The perception of education is different. Society says that it's bad that it's expensive because "everyone needs it". They don't. Plenty of good jobs available with 2 yr degrees or less. I'd like the media to start saying "stop wasting money on soft skill degrees like psychology and english"
Some of us did just fine with our psych degrees.
Good for you. Did you go on to get a graduate degree, or are you working with just a 4 -year psychology degree?
Would you say you apply the skills and processes learned in your 400 level course work in your daily job?
or
Would you say you could interchange psychology with any other random 4 year degree and have the same job?
I think you're taking personal offense. I didn't aim my comments at you. You simply must understand that the overwhelming majority of 'soft skill' degree recipients go on to have employment totally unrelated to their degree. The education then was wasted. A few(2) of my friends have gone on to become counselors and start their own practices, but the remainder with 'soft skill' degrees(7 with bachelors, 1 with masters) are still unemployed or not using their education. This is in WI. Thats a 23% success rate. Not something I would want to gamble my future on.
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I don't really get the way the US media acts like student loan debt is some crushing problem. I can't access the article anymore, but I remember it saying that the average debt was only like $30k or less. If your post-university job doesn't allow you to save that much per year, university wasn't a very good investment.
For some reason a $30k loan on a mid-level Subaru is considered fine to pay off over five years, but $30k for an education that should drastically increase your earning power for the next four or five decades is an insurmountable, lifelong burden.
I'm not sure i follow. If you have a 25k / yr entry job and 30k in student loan debt, you can't afford a $30k subaru.
In other aspects, people have always wasted money on cars and things they don't need.
The perception of education is different. Society says that it's bad that it's expensive because "everyone needs it". They don't. Plenty of good jobs available with 2 yr degrees or less. I'd like the media to start saying "stop wasting money on soft skill degrees like psychology and english"
Some of us did just fine with our psych degrees.
Good for you. Did you go on to get a graduate degree, or are you working with just a 4 -year psychology degree?
Would you say you apply the skills and processes learned in your 400 level course work in your daily job?
or
Would you say you could interchange psychology with any other random 4 year degree and have the same job?
I think you're taking personal offense. I didn't aim my comments at you. You simply must understand that the overwhelming majority of 'soft skill' degree recipients go on to have employment totally unrelated to their degree. The education then was wasted. A few(2) of my friends have gone on to become counselors and start their own practices, but the remainder with 'soft skill' degrees(7 with bachelors, 1 with masters) are still unemployed or not using their education. This is in WI. Thats a 23% success rate. Not something I would want to gamble my future on.
I'm not taking offense. It just seems silly to say, don't get a degree in soft skill. Yes, I am in grad school (being paid) as was my husband who is now post-doc. Most of my friends with psych degrees have jobs related in some way, though many went on to grad school, but it self-selected, most of my friends were in honors program with me. And the ones that are not in jobs that relate are still doing well, in jobs that require a degree though not a specific one. Why is that bad thing? If you can get good grades in something you find fun and then get out and get paid decently but it does not require you to use the upper division work you did (other than writing, most of my friends with non-psych jobs still do a ton of writing which was improved in college), why is that bad?
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“But part of youth, the wiring of a young person, is the focus on really short-term gratification.”
I really hate quotes like this, and I also hate it when people condescend to my generation. Yes, apparently a lot of us aren't good at saving, but that's no reason to insult the lot of us. And just because someone is a member of my generation doesn't give them the authority to speak on my behalf, or about how I am "wired" or whatever.
I'm almost 24 years old, and my net worth is upwards of a few thousand bucks already, and that doesn't include part ownership of the real estate business my parents and I operate. I'm maxing out my IRA and TSP and the money I have left after that, yes, I spend some of it on concerts and entertainment and stuff, but my savings rate is still over 50%.
So yes, you can enjoy your life a lot--I know I'm not sacrificing anything--while saving a lot of money, even if you don't make a ton right out of college. You just can't throw money around like it's nothing, that's all.
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My second grader has to pay rent for his desk via"bear bucks" he earns for various things in class. they can either spend the bear bucks in the class store or save them for better things. This is in Texas- so they are starting early teaching budgeting and some level of personal finance here.
out of curiosity, does desk get foreclosed on if he cant pay rent?
It's texas, so he probably gets a woopin'
Hahaha!
I just asked him. They garnish wages if you can't pay rent. And they get paid weekly but pay rent biweekly, forcing them to think ahead. They have the opportunity to buy little toys, or extra time in the computer lab, etc.
It's a start!
While this is awesome, it is not something built into the curriculum. It sounds like an awesome classroom wide intervention that the (awesome sounding) teacher has put in place to address classroom management.
There is nothing in the Texas state curriculum about teaching kids personal finance. Many high schools offer it as an elective, but it is not in the graduation requirements.
The pressure to go to college is unrealistic, out of control, and incredibly self-serving. Part of the accountability ratings for Texas high schools is how many students enroll in college, so it is in the best interest of the school to push everyone in that direction. But it only looks at enrolling, not completing, so they just want to do what they can to get them in the door, whether it is right for them at that point or not.
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The push for everyone to go to college is absolutely ridiculous and as far as I'm concerned it is a conspiracy. Kids who are not college material get talked into going and they either bomb out or get useless degrees while the banks rake in the big bucks from high interest student loans that the students can never discharge. Debt slavery for everyone! Kids' futures ruined! Hooray!
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There are other reasons why so many high school kids get pushed towards colleges, Companies are restricted as to what they can ask a job applicant. They have little to base whether the applicant will be a good hire. But since they can ask about going to college, and since graduating college shows some aptitude, the college applicant has a better chance of being hired. Another example of good intentions having unforeseen results.
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Being somewhat mathematically inclined, I absolutely cannot stand the way these headline numbers are reported.
First, you can ignore the quotes of stupidity. If there's one thing you can rely on in this world, it's the media interviewing the dumbest people they can find. I wouldn't consider these people representative.
Second, the "average" savings rate is 100% meaningless in this case. Is the "average" millennial in college? Are more people in this demographic deciding to leave a job and go to graduate school? Does the purchase of a house or lease of a car count as negative savings?
The average is meaningless, and the numbers are meaningless without a lot more context.
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I don't think a lot of people my age would make that choice.
I'm 25. I bought a rental condo when I was 23 and didn't take vacations and lived with my parents to keep expenses low while I payed off the loans I took to buy the property. I'm expecting to buy a duplex next year so I can live on one side and rent out the other.
Yes, most of friends wouldn't have done what I did, but I want to be FIRE'd by the time I'm 35.
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this is a very interesting point that i have never considered. however i wonder how many new grads get a 30 k car? im not nit picking im actually curious.
I know a couple new grads who bought an expensive car -- were they 30K? I don't know for sure. Some of these people graduated with me in the 80s, so an expensive car then wasn't really 30K.
And I knew other people who made equally foolish financial choices right out of school: Rented a too-expensive apartment and filled it with rented furniture, went into debt for a wedding, and so forth. I've heard people justify these choices, saying, "I want to do it now before I have responsibilities."
MOST of the people I know don't do these things, but I have known a few. I think more might do it . . . if it weren't difficult to do. What I mean is, a brand-new grad with only part-time jobs on his resume might have trouble borrowing that much. I'm thinking of a friend who was MAD at his wife because she co-signed for their just-graduated son to buy a super-expensive sports car. In her defense. the boy didn't tell his mom that Dad had already refused to co-sign. I'm not taking offense. It just seems silly to say, don't get a degree in soft skill.
I have two degrees that are generally frowned upon by members of this board, who tend to think anyone can and should be in a STEM field, preferably engineering. I haven't done too badly for myself.
I really hate quotes like this, and I also hate it when people condescend to my generation.
I mean this in the nicest possible way: Quit being thin skinned. Every generation is "condescended to" at some point. Don't take it personally.
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I mean this in the nicest possible way: Quit being thin skinned. Every generation is "condescended to" at some point. Don't take it personally.
Usually when they are young and stupid
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http://online.wsj.com/articles/savings-turn-negative-for-younger-generation-1415572405
In my household, we're up to 85%...
Don't worry because in the end we are all going to be paying for these people and their stupid mistakes.
Get ready for higher taxes.
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+1. But you know it's easier to just pile on the Milliennials. I'm sure 20-30 yr olds were not any better at saving money relative to older generations back in the 80's or 90's.
I wasn't. In the 1990s I spent up to $10,000 a year on alcohol. I was in the Army, so some drinking was expected, but...
Younger people will tend to think short-term, it's part of growing up, learning to think long-term. I'd be more concerned about the ones 30+ still living at home with their parents...
Among my clients I've had a lot of women in their 20s. I remember one who had maxed out her credit card borrowed money from her more frugal friend... to go out drinking on the weekend. She paid the friend back first, since - she never said, but I cynically thought - the friendship was a more important line of credit than the bank could offer. Another lived renting a flat owned by her parents, when she lost her job they said, "no rent until you get a job," the next week she spent several hundred dollars on a new sport.
Often the most spendthrift kids come from families who always bail them out, or they find friends who act like family in that way. Now, I don't want to say that when they blow all their money I'll leave my kids in the street, but...
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Deano, I don't think it is taught in american schools though, not much at least. But if I had to guess a lot of the class taught how to balance a checkbook? Or did it teach investing for future as well?
In Ontario Financial Literacy is cross curricular, it's not just one class. There are classes that focus a lot on these things however. I taught basic banking and budgeting, how the stock market works (stocks, bonds, etf's etc), credit, the nature of taxation (what it pays for in Canada and how income tax is progressive-tax brackets, that sort of thing), RRSP's, TFSA's, how to spot a scam, how to avoid pay-day lenders, retirement related finances. The students really loved it, I made it real world as much as possible-I had some students say it was the most important thing they learned in school. I would disagree with that (basic literacy, critical literacy, essential numeracy-all more important!), but it was nice to hear.
This is good to hear. I was born in '81, went through Ontario public education (kindergarten to OAC) and didn't have a single class related to finances, investing, or financial literacy. When was this implemented?
"Are you on OSAP?"
Lol ah, I miss being a student....
OSAP loans crack me up.
My best friend and housemate through much of university got an OSAP loan at the beginning of every semester, and immediately went to the mall and bought shoes. He never wore shoes for more than a year, and had to have dozens of different shoes to coordinate with his outfits. White shoes for clubbing (had to be discarded if they got dirty), light coloured boots to go with jeans, high cut boots for winter, regular running shoes for day to day wear, fancy red shoes, shoes with flat laces, skateboarding shoes, etc.
We were the same shoe size, so every time he went to throw out a pair of shoes I got new shoes! Didn't buy shoes once through university, and I collected about 20 discarded pairs and took 'em with me when I moved out. It's been what, 10 years now . . . I'm down to three pairs of his old shoes/boots. Meanwhile, he's on track to finish paying his OSAP off completely this year. :P
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this is a very interesting point that i have never considered. however i wonder how many new grads get a 30 k car? im not nit picking im actually curious.
I know of 2 grads within the past year, both single women bought brand new Rav4s. MSRP on them is about $25k. One is now a nurse the other a high school teacher. While new grads are making a lot more money than when they were in college, I don't think they realize that their new $40k salary doesn't go that far.
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The push for everyone to go to college is absolutely ridiculous and as far as I'm concerned it is a conspiracy. Kids who are not college material get talked into going and they either bomb out or get useless degrees while the banks rake in the big bucks from high interest student loans that the students can never discharge. Debt slavery for everyone! Kids' futures ruined! Hooray!
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My Ishmael by Daniel Quinn looks at this and argues it's a way to keep people off of the job market so they aren't competing with their parents for jobs. Neat idea.
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this is a very interesting point that i have never considered. however i wonder how many new grads get a 30 k car? im not nit picking im actually curious.
I know of 2 grads within the past year, both single women bought brand new Rav4s. MSRP on them is about $25k. One is now a nurse the other a high school teacher. While new grads are making a lot more money than when they were in college, I don't think they realize that their new $40k salary doesn't go that far.
That is crazy! I know teachers who kept their college serving job because they made as much or more serving than teaching. I find it nuts that someone would buy a new car as a new teacher.
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this is a very interesting point that i have never considered. however i wonder how many new grads get a 30 k car? im not nit picking im actually curious.
I know of 2 grads within the past year, both single women bought brand new Rav4s. MSRP on them is about $25k. One is now a nurse the other a high school teacher. While new grads are making a lot more money than when they were in college, I don't think they realize that their new $40k salary doesn't go that far.
Buying a new car is a silly choice.
Buying a RAV4 is not so face-punch.
Some people just don't have the nerve to try and look for the well kept ones. Or they are too lazy.
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My brother in law is a millennial and he puts me to shame being frugal. He owns four houses including three rentals. Maybe not the norm but I'm sure there are plenty of responsible younger people out there. I know some solid people in this age group.
I know at that age I saved like a maniac; it never ever would have crossed my mind to buy a new car instead of the used civic (manual) that I bought for a steal and eventually sold when mass transit became an option for daily commute! I'm sure grateful now, starting early set me up for a lifetime of financial freedom at an early age.
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yeah there are a bunch of us millennials who save ... i found this site last year. i hadnt considered early retirement until then. i always assumed i needed 5MM and was set to easily have that at 55. but now i'm shooting for 1.5MM and retiring at 35-40. i always assumed i needed 100K+ per year b/c thats what we make now. i never took into account the fact i was saving + the fact i wouldnt have a mortgage etc. i was always a saver but this site put into perspective how much i was actually spending and how awesome my current lifestyle was and that i could easily live on 50k give or take per year in retirement (note i'm not full mustachian).
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yeah there are a bunch of us millennials who save ... i found this site last year. i hadnt considered early retirement until then. i always assumed i needed 5MM and was set to easily have that at 55. but now i'm shooting for 1.5MM and retiring at 35-40. i always assumed i needed 100K+ per year b/c thats what we make now. i never took into account the fact i was saving + the fact i wouldnt have a mortgage etc. i was always a saver but this site put into perspective how much i was actually spending and how awesome my current lifestyle was and that i could easily live on 50k give or take per year in retirement (note i'm not full mustachian).
Are you me?
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yeah there are a bunch of us millennials who save ... i found this site last year. i hadnt considered early retirement until then. i always assumed i needed 5MM and was set to easily have that at 55. but now i'm shooting for 1.5MM and retiring at 35-40. i always assumed i needed 100K+ per year b/c thats what we make now. i never took into account the fact i was saving + the fact i wouldnt have a mortgage etc. i was always a saver but this site put into perspective how much i was actually spending and how awesome my current lifestyle was and that i could easily live on 50k give or take per year in retirement (note i'm not full mustachian).
Are you me?
no i'm 28 ... you're way older
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yeah there are a bunch of us millennials who save ... i found this site last year. i hadnt considered early retirement until then. i always assumed i needed 5MM and was set to easily have that at 55. but now i'm shooting for 1.5MM and retiring at 35-40. i always assumed i needed 100K+ per year b/c thats what we make now. i never took into account the fact i was saving + the fact i wouldnt have a mortgage etc. i was always a saver but this site put into perspective how much i was actually spending and how awesome my current lifestyle was and that i could easily live on 50k give or take per year in retirement (note i'm not full mustachian).
Are you me?
no i'm 28 ... you're way older
What's funny about that is the only part of your post that doesn't line up with me exactly was that you found MMM last year...I found MMM 2 years ago, so really, you could still be past me (thanks for stopping the shafting!)
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So we are basically the same then i found at 27 you found at 27. Ha thats pretty great. would be super crazy if you owned a boat and thats why your number was so high for retiring but i doubt that.
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Confirmed .. odput is boarder42 from 1 year in the future
yeah there are a bunch of us millennials who save ... i found this site last year. i hadnt considered early retirement until then. i always assumed i needed 5MM and was set to easily have that at 55. but now i'm shooting for 1.5MM and retiring at 35-40. i always assumed i needed 100K+ per year b/c thats what we make now. i never took into account the fact i was saving + the fact i wouldnt have a mortgage etc. i was always a saver but this site put into perspective how much i was actually spending and how awesome my current lifestyle was and that i could easily live on 50k give or take per year in retirement (note i'm not full mustachian).
Are you me?
no i'm 28 ... you're way older
What's funny about that is the only part of your post that doesn't line up with me exactly was that you found MMM last year...I found MMM 2 years ago, so really, you could still be past me (thanks for stopping the shafting!)
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yeah there are a bunch of us millennials who save ... i found this site last year. i hadnt considered early retirement until then. i always assumed i needed 5MM and was set to easily have that at 55. but now i'm shooting for 1.5MM and retiring at 35-40. i always assumed i needed 100K+ per year b/c thats what we make now. i never took into account the fact i was saving + the fact i wouldnt have a mortgage etc. i was always a saver but this site put into perspective how much i was actually spending and how awesome my current lifestyle was and that i could easily live on 50k give or take per year in retirement (note i'm not full mustachian).
Are you me?
no i'm 28 ... you're way older
What's funny about that is the only part of your post that doesn't line up with me exactly was that you found MMM last year...I found MMM 2 years ago, so really, you could still be past me (thanks for stopping the shafting!)
Twilight Zone song "ne ne ne ne, ne ne ne ne, ne ne ne ne"
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When you can't get on, are you talking HGTV or her web site? She has her own web site and blog now.
http://gailvazoxlade.com/blog/ (http://gailvazoxlade.com/blog/)
http://www.gailvazoxlade.com/ (http://www.gailvazoxlade.com/)
I feel with you, when I was in the U.S. during the Olympics last year, I couldn't get CBC's internet coverage.
I miss Gail. After I cut cable, I couldn't get her show anymore. I'm so sad, and I go to the website for it and I'm blocked for not being Canadian.
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...constant catastrophic doom-mongering in the media which has led them to say "Fuck it all! The world is going to shit and I deserve good things.
Haha... The GenX punk rockers experienced the same mentality but came to a very different conclusion. We decided to instead make our own clothes, play used instruments, spike our hair, and drink cheap beer. We didn't even have the money to go into debt. So glad that credit cards and worthless arts degrees weren't de rigueur back then. We just wanted enough cash for food and smokes.
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I just don't understand. I have no idea how I could spend my entire paycheck. My theory is brunch.
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I hate the way millennials get slammed in the media for sucking. Is it surprising that a generation with higher unemployment, lower wages, and insane student debt is having a hard time saving? Couple those factors with typical societal pressures and you have a recipe for disaster!
That being said, I know a lot of my college classmates are saving far above average. My personal rate is a meager 12%, but we plan to ratchet it up to around 35% over the next 5 years. There is hope, educate those who are curious and lead by example.
I don't really get the way the US media acts like student loan debt is some crushing problem. I can't access the article anymore, but I remember it saying that the average debt was only like $30k or less. If your post-university job doesn't allow you to save that much per year, university wasn't a very good investment.
A debt that you can pay off in a single year really isn't a big deal. But with typical student loan interest rates, there's also no real need to pay it off. I have no plans to pay off my student loans any sooner than required. Typical interest rates are 3-4% with very small minimum payment requirements, making it an excellent arbitrage opportunity. I expect to still have student loans throughout retirement.
I think you're overestimating how much the AVERAGE college graduate makes with how much the AVERAGE engineer or other high-earning graduate makes. Lots of these folks barely make $30k their first year out, if they can even get a job. And I dunno about your typical interest rates, but my government-backed Stafford loans originated at 6.8, with Parent PLUS loans at 7.9, with no official way to refinance to the now-lower interest rates.
I think at some point we need to hold people accountable (even if they're stupid kids) for not actually thinking about consequences of student loans. It's not trivial. They decided what to go to school for and need to understand the impact and whether or not they are going to get a good return on that degree. And if they don't want one that gives one, that's fine, but it should be a conscious decision. No one is forcing them to go to college.
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I hate the way millennials get slammed in the media for sucking. Is it surprising that a generation with higher unemployment, lower wages, and insane student debt is having a hard time saving? Couple those factors with typical societal pressures and you have a recipe for disaster!
That being said, I know a lot of my college classmates are saving far above average. My personal rate is a meager 12%, but we plan to ratchet it up to around 35% over the next 5 years. There is hope, educate those who are curious and lead by example.
I don't really get the way the US media acts like student loan debt is some crushing problem. I can't access the article anymore, but I remember it saying that the average debt was only like $30k or less. If your post-university job doesn't allow you to save that much per year, university wasn't a very good investment.
A debt that you can pay off in a single year really isn't a big deal. But with typical student loan interest rates, there's also no real need to pay it off. I have no plans to pay off my student loans any sooner than required. Typical interest rates are 3-4% with very small minimum payment requirements, making it an excellent arbitrage opportunity. I expect to still have student loans throughout retirement.
I think you're overestimating how much the AVERAGE college graduate makes with how much the AVERAGE engineer or other high-earning graduate makes. Lots of these folks barely make $30k their first year out, if they can even get a job. And I dunno about your typical interest rates, but my government-backed Stafford loans originated at 6.8, with Parent PLUS loans at 7.9, with no official way to refinance to the now-lower interest rates.
And you're underestimating what the average person is making out of college: "The overall average starting salary for Class of 2013 new college graduates currently stands at $45,327, an increase of 2.4 percent over the reported average of $44,259 for Class of 2012 graduates, according to the September 2013 Salary Survey."
https://www.google.com/search?q=average+salary+college+graduate&ie=utf-8&oe=utf-8&aq=t&rls=org.mozilla:en-US:official&client=firefox-a&channel=fflb (https://www.google.com/search?q=average+salary+college+graduate&ie=utf-8&oe=utf-8&aq=t&rls=org.mozilla:en-US:official&client=firefox-a&channel=fflb)
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...constant catastrophic doom-mongering in the media which has led them to say "Fuck it all! The world is going to shit and I deserve good things.
Haha... The GenX punk rockers experienced the same mentality but came to a very different conclusion. We decided to instead make our own clothes, play used instruments, spike our hair, and drink cheap beer. We didn't even have the money to go into debt. So glad that credit cards and worthless arts degrees weren't de rigueur back then. We just wanted enough cash for food and smokes.
All right! Another Gen-Xer trying to take over this thread. Maybe each generation has problems they have to overcome, but we just deal with it differently.
Gen-Xers dealt with it with apathy, punk rock, latch keys, mohawks, leggings, divorce.
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Gen-Xers dealt with it with apathy, punk rock, latch keys, mohawks, leggings, divorce.
Assuming we're about the same age -- remember when we were little, and "latchkey kids" were a national disgrace and source of endless hand-wringing?
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I wonder how they are calculating "savings rate". I know I have racked up a good amount of debt up until this year because I have 1) gone to undergraduate school, 2) gone to graduate school, 3) bought a house. If you don't count my home equity in that, then yeah it looks like I wracked up MAJOR debt. My liquid Net Worth is around -$185k, but with home equity it is $140k.
A lot of people in the "Under 35" range are in school (ages 18-22 for undergrad and then 22-24 for masters if you don't graduate into unemployment for a couple years). When you are earning $20K at a part time job while going to school, -2% is only $400 a year in debt!
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Gen-Xers dealt with it with apathy, punk rock, latch keys, mohawks, leggings, divorce.
Assuming we're about the same age -- remember when we were little, and "latchkey kids" were a national disgrace and source of endless hand-wringing?
Yes, that was a big topic in the 80s. It didn't apply to my family, but you did hear a lot about it.
We also graduated in the early 90s during a big recession. I had to stay for graduate school because the jobs were slim pickings. Of course, I searched for and applied for a fellowship...I wasn't going to go into debt for that as I wasn't really interested in going to graduate school. It ended up being a pretty sweet deal for two years.
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yeah there are a bunch of us millennials who save ... i found this site last year. i hadnt considered early retirement until then. i always assumed i needed 5MM and was set to easily have that at 55. but now i'm shooting for 1.5MM and retiring at 35-40. i always assumed i needed 100K+ per year b/c thats what we make now. i never took into account the fact i was saving + the fact i wouldnt have a mortgage etc. i was always a saver but this site put into perspective how much i was actually spending and how awesome my current lifestyle was and that i could easily live on 50k give or take per year in retirement (note i'm not full mustachian).
Are you me?
no i'm 28 ... you're way older
I have found my people!
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Gen-Xers dealt with it with apathy, punk rock, latch keys, mohawks, leggings, divorce.
Assuming we're about the same age -- remember when we were little, and "latchkey kids" were a national disgrace and source of endless hand-wringing?
Yes, that was a big topic in the 80s. It didn't apply to my family, but you did hear a lot about it.
We also graduated in the early 90s during a big recession. I had to stay for graduate school because the jobs were slim pickings. Of course, I searched for and applied for a fellowship...I wasn't going to go into debt for that as I wasn't really interested in going to graduate school. It ended up being a pretty sweet deal for two years.
I also applied for a fellowship, but that damn hobbit got the job
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Gen-Xers dealt with it with apathy, punk rock, latch keys, mohawks, leggings, divorce.
Assuming we're about the same age -- remember when we were little, and "latchkey kids" were a national disgrace and source of endless hand-wringing?
Yes, that was a big topic in the 80s. It didn't apply to my family, but you did hear a lot about it.
We also graduated in the early 90s during a big recession. I had to stay for graduate school because the jobs were slim pickings. Of course, I searched for and applied for a fellowship...I wasn't going to go into debt for that as I wasn't really interested in going to graduate school. It ended up being a pretty sweet deal for two years.
I also applied for a fellowship, but that damn hobbit got the job
LOLOLOL