Your thoughts on this article: "If You Have Savings In Your 20s, You're Doing Something Wrong"

[barkley]

Reading this thread reminds me how it took years of reading on here to finally realize that a large majority of people posting here were much older than me. I was always puzzled by the advice given on here with such intensity too!

I finally started noticing all the ones mentioning their 20 year old children and noticing signatures. They seemed to think differently than the generation I came from and the fact is this next group of young adults are simply going to think differently. They are living in world that is so far removed from the one that many people posting here grew up in or spent their young adult life in. To think that they are going to have the same life ambitions and way of doing things is simply silly!

I agree that the world is different and 20 something's are going to have different ambitions and ways of doing things than I did/do, or my husband (we are from decidedly different generations with different attitudes-his in closer age proximity to the 20 something's than mine) but I think it's shocking for those of us w/20 something's to see this kind of attitude being encouraged when so many 20 something's are already horrendously saddled with student debt that exceeds what half the cost of our first homes totaled or even if they are lucky enough to have had parents bankroll their entire educations, they are living with an attitude of entitlement such that they auto default to mom and dad as their safety net (and in far too many cases-supplemental income and student loan payments) when the most routine non monthly expense comes up (car servicing/repairs/registration, medical/dental co-pays or bills...).

it's fine and dandy if someone is TOTALY self sufficient and chooses not to save any money-that's their choice as an independent adult, but when their financial stability is rooted in relying on someone else's earnings or savings it's insulting-AND if they do decide when they become aged 30 something's to buy a home and have kids they certainly shouldn't be relying on mommy and daddy to come up with the down payment and provide free childcare in the event that the bet they made on themselves in their 20's didn't pay off as richly as they had anticipated or the cost of being entirely self sufficient along with taking on the support of another human being exceeds their financial expectations.


some great personal examples have been given here so i'll share one on what can happen to the NEXT generation who are born to the now 20 something's when they become aged 30 something's-

a family member lived this lifestyle-despite the couple both having decent paying jobs, was never a saver. very much into instant gratification. had kids but still wasn't much into saving but wanted kids to have everything that all the other kids had (private school, cool electronics...) so often was reliant on mom and dad for 'help'. decided when kids were tweens to finally go finish up that degree (along w/spouse) that never got completed earlier in life-and to make it more marketable add on a masters all at a very pricey private university. luckily employer pays for a good chunk but still it's massive student debt and when it comes time to start making those loan payments the increase in pay isn't quite what was anticipated + the cost of those kids goes up as they age, and a home is acquired along the way which is more expensive to maintain than anticipated-so again it's relying on the bank of mom and dad to supplement.

kids grow up this way-but never aware of the extent to which the grandparents financially helped out/employer reimbursement for some schooling. as young adults they see the lifestyle they've grown up in, know roughly what the pay scale is for parent's jobs so they pick careers and enroll in the same very pricey university. mom and dad never saved so there's no financial help but 'why worry about student loans?' 'mom and dad are living the life and they paid their own way'. these kids end up 20 something's with almost 6 figure student loan debts but that doesn't deter them from wanting to be parents before they are too aged so they marry and start having kids figuring their salaries will catch up with their expenses.

guess what? it never happens. the careers they chose (similar to mom/dads) pay nowhere near what their actual cost of living is, let alone the added cost of student loan payments and raising kids. they cannot fathom why they are failing at being able to come anywhere near the lifestyle they were raised in (mom and dad never tell them about all the help grandma and grandpa provided-and that well went dry surprising mom and dad who anticipated their own existing debts could be paid off w/money to spare when grandma and grandpa's remaining assets were revealed upon death). in at least one case, despite a decent income-the family will struggle financially for decades.

so imho it's well and fine to live this lifestyle if it's done entirely independently-but to rely on one's parents to support it and misrepresent the realities of the true cost of living to your children is a horrendous disservice.

 

[damskipi13]

Reading this thread reminds me how it took years of reading on here to finally realize that a large majority of people posting here were much older than me. I was always puzzled by the advice given on here with such intensity too!

I finally started noticing all the ones mentioning their 20 year old children and noticing signatures. They seemed to think differently than the generation I came from and the fact is this next group of young adults are simply going to think differently. They are living in world that is so far removed from the one that many people posting here grew up in or spent their young adult life in. To think that they are going to have the same life ambitions and way of doing things is simply silly!

I'm fairly close in age to the author - I just turned 33. I don't think anybody here is saying the author should have the same life ambitions and do things the same way as a 40- or 50-year-old. We are saying that balance is important. In my 20s I was going out to eat 3-5 times each week, travelling 3-5 times each year, going to clubs and having fun. I was also paying off my student loans early and starting my retirement accounts to the point where I'm on schedule to retire at 41 and get to live an actually independent life, not the faux-independence the author espouses. You actually can do both - live a happy, fun life and put money away. You just have to make choices. Like somebody else mentioned, I went out with my friends but didn't partake in the $75 bar tabs each time. One beer and a few waters is fine too. The scary thing about her article is that not only does she say she isn't saving, she is telling people they shouldn't save and if they do something is wrong with them. The lack of financial know-how combined with the holier-than-thou attitude is just wayyyyy too much.

You know, a friend of mine back in my 20's had a saying - Let's not get stupid while we're being silly.

I think it applies here.

Hahaha, this is awesome

 

[Gumbo4x4]

Reading this thread reminds me how it took years of reading on here to finally realize that a large majority of people posting here were much older than me. I was always puzzled by the advice given on here with such intensity too!

I finally started noticing all the ones mentioning their 20 year old children and noticing signatures. They seemed to think differently than the generation I came from and the fact is this next group of young adults are simply going to think differently. They are living in world that is so far removed from the one that many people posting here grew up in or spent their young adult life in. To think that they are going to have the same life ambitions and way of doing things is simply silly!

Nope, you're hearing the same things we heard at your age, the same things our parents heard, and the same things YOUR generation will preach to the next generation 20-30 years from now. The more things change, the more they stay the same.

And here's the fun part. Your generation will have the double whammy of having not only a higher life expectancy than mine, but you'll also receive less retirement help from pensions & Uncle Sam all while medical care costs will continue to escalate much faster than your wages and the kind of insurance policies that covered everything all but vanish. If that doesn't scare the Hell out of you, it should.

 

[barkley]

Nope, you're hearing the same things we heard at your age, the same things our parents heard, and the same things YOUR generation will preach to the next generation 20-30 years from now. The more things change, the more they stay the same.

And here's the fun part. Your generation will have the double whammy of having not only a higher life expectancy than mine, but you'll also receive less retirement help from pensions & Uncle Sam all while medical care costs will continue to escalate much faster than your wages and the kind of insurance policies that covered everything all but vanish. If that doesn't scare the Hell out of you, it should.

SO TRUE. it floors me that within 5 years of my retiring my former government employer changed from new employees vesting into the retirement plan at 5 years to 15 years, and there is no longer the option for new employees no matter how many decades they work of being able to get health insurance upon retirement (in anticipation of aca all union contracts were renegotiated such that minimum retirement ages were raised to minimum age to get Medicare). I recently looked at the pay scale for my former division-I retired out in 2003; were I still in my position today, 12 years later-my salary would be frozen at what I was receiving prior to my retirement b/c w/ pay cuts over the years-the top salary is well below what I received back then (and I was not at the top step).

 

[LinderInWonderland]

I read that article the other day, then last night I watched the first episode of Lisa Ling's series on Netflix. In it, she made a comment to two women who were in their 50s something along the lines of 'many women your age are thinking of slowing down' and I cracked up. I'm 44 and feel like I'm picking up speed!

 

[Gumbo4x4]

I read that article the other day, then last night I watched the first episode of Lisa Ling's series on Netflix. In it, she made a comment to two women who were in their 50s something along the lines of 'many women your age are thinking of slowing down' and I cracked up. I'm 44 and feel like I'm picking up speed!

This is us for certain. DW & I get out WAY more than when we were in our 30's. I'm 48, she's about to turn 44. Got home from the club at 2:00 am a week ago.

My parents are in their mid-late 70's and have some kind of social activity pretty much every single day - sometimes 2 or 3 different things in the same day.

 

[a742246]

A balanced life is very important, make sure you "invest time and money" into your hobbies now because when you retire that is what is going to keep you happy. Somehow finding hobbies when you are retired is not the same!

 

[mrsheppo]

My DS and his wife are in their late 20's. Before they got married, they were able to go to Europe and take a couple of cruises and enjoy their lives. They got married 5 years ago and bought a house. They both have 401k accounts and retirement accounts. They do have savings accounts also. They put off having children until they both had established jobs. They became parents this summer for the first time and thought they had it made. 1 month after their son was born, my daughter in law was diagnosed with cancer. So far, her bills total over $300k due to several hospitalizations. If they didn't have savings and good insurance, they would be underwater right now as she can't work right now. They never, ever thought this would happen to them but it has. They have had to dip into a good portion of their savings but are still in decent shape.

 

[eliza61]

Nope, you're hearing the same things we heard at your age, the same things our parents heard, and the same things YOUR generation will preach to the next generation 20-30 years from now. The more things change, the more they stay the same.

And here's the fun part. Your generation will have the double whammy of having not only a higher life expectancy than mine, but you'll also receive less retirement help from pensions & Uncle Sam all while medical care costs will continue to escalate much faster than your wages and the kind of insurance policies that covered everything all but vanish. If that doesn't scare the Hell out of you, it should.

I don't know Gumbo, I think every generation has its "evils". when I was coming up it was Communism. We all thought we'd be dead from Cuba bombing us, now I know people excited by being able to travel there. my friends and I actually thought we'd live forever and now we are finding out that ain't necessarily true?

Would you have believe how terrorism has invaded our lives 40 years ago?? I would not have.

So what do you do? do you advise your kids not to live because there could be a possibility of no ss?? I simply can't do that to my sons. Why would you want them scared for their future?

I remind my kids of a few other things.
Their generation also enjoy a much higher standard of living than any other generation
Their generation has more global opportunities than ever before.

 

[eliza61]

My DS and his wife are in their late 20's. Before they got married, they were able to go to Europe and take a couple of cruises and enjoy their lives. They got married 5 years ago and bought a house. They both have 401k accounts and retirement accounts. They do have savings accounts also. They put off having children until they both had established jobs. They became parents this summer for the first time and thought they had it made. 1 month after their son was born, my daughter in law was diagnosed with cancer. So far, her bills total over $300k due to several hospitalizations. If they didn't have savings and good insurance, they would be underwater right now as she can't work right now. They never, ever thought this would happen to them but it has. They have had to dip into a good portion of their savings but are still in decent shape.

Is the primary concern paying the bills???

When my husband had cancer I didn't give a rats backside to how much the treatment cost, I wanted to know how to cure him.

I'd give every penny I had and live in abject poverty to have 5 more minutes with him. when my son was almost killed in a car accident, getting the bill paid was not on my mind when I held his hand in ICU.

Wow. Is paying the bills really what you folks worry about in life and death situations??

Hope your DIL recovers

I'm out, way more depressing than i thought it would be

 

[SouthFayetteFan]

People do it every day and on a lot less money than I was making. MrMoneyMustache has a whole website devoted to the topic.

DH is a huge fan of Mr Money Mustache!

TODAY is a fantastic day! My two favorite internet "hobbies" have come together! Reading Mr. Money Mustache and the Disboards!

As a side note - The article was insane. Why must fun=money? I remember enjoying my twenties...while saving a TON of money.

 

[Praying Colonel]

Nope, you're hearing the same things we heard at your age, the same things our parents heard, and the same things YOUR generation will preach to the next generation 20-30 years from now. The more things change, the more they stay the same.

And here's the fun part. Your generation will have the double whammy of having not only a higher life expectancy than mine, but you'll also receive less retirement help from pensions & Uncle Sam all while medical care costs will continue to escalate much faster than your wages and the kind of insurance policies that covered everything all but vanish. If that doesn't scare the Hell out of you, it should.

Yep--although the details may change from generation to generation, there are certain principles that are timeless and more or less universal. For example, the author of this article reminded me of the Grasshopper from the Ant and the Grasshopper fable, which is millennia old. This woman in her late 20s (and it's scary that she has this worldview at that age) better hope winter doesn't come as early as it could.

 

[damskipi13]

Is the primary concern paying the bills???

When my husband had cancer I didn't give a rats backside to how much the treatment cost, I wanted to know how to cure him.

I'd give every penny I had and live in abject poverty to have 5 more minutes with him. when my son was almost killed in a car accident, getting the bill paid was not on my mind when I held his hand in ICU.

Wow. Is paying the bills really what you folks worry about in life and death situations??

Hope your DIL recovers

I'm out, way more depressing than i thought it would be

Wow. I understand this is might be a sensitive topic, but I think you wayyyy overreacted. mrsheppo never said they were worried about the bills, he clearly indicated how good it was that they didn't have to worry about them. It seems to me the lesson is that taking care of yourself financially early on allows you to deal with life and death situations by focusing on the person and not the money.

Good health to your DIL, mrsheppo.

 

[Gumbo4x4]

I don't know Gumbo, I think every generation has its "evils". when I was coming up it was Communism. We all thought we'd be dead from Cuba bombing us, now I know people excited by being able to travel there. my friends and I actually thought we'd live forever and now we are finding out that ain't necessarily true?

Would you have believe how terrorism has invaded our lives 40 years ago?? I would not have.

So what do you do? do you advise your kids not to live because there could be a possibility of no ss?? I simply can't do that to my sons. Why would you want them scared for their future?

I remind my kids of a few other things.
Their generation also enjoy a much higher standard of living than any other generation
Their generation has more global opportunities than ever before.

But, at the end of the day, you still encourage your sons to sock away that 10% though

 

[RitaE]

Is the primary concern paying the bills???

When my husband had cancer I didn't give a rats backside to how much the treatment cost, I wanted to know how to cure him.

I'd give every penny I had and live in abject poverty to have 5 more minutes with him. when my son was almost killed in a car accident, getting the bill paid was not on my mind when I held his hand in ICU.

Wow. Is paying the bills really what you folks worry about in life and death situations??

Hope your DIL recovers

I'm out, way more depressing than i thought it would be

The thing about money is, when you have it then it is infinitely easier not to worry about it and concentrate on things such as health.
As much we'd all like to believe that money isn't a factor in a long illness, the fact of the matter is that in addition to the treating of the illness, life always goes on in the background. The mortgage needs to be paid, the electric company still wants their money, and food has to be bought and kids needs shoes.

Since you were just awhile back explaining to everybody that you have a financial advisor who had grown you and your husband's investment assets to $5million dollars, as well as your reported 7 figure yearly income --- then it isn't really comparable to say you were able to sit in the ICU and not think about money and believe a young couple with a new baby and without those sort of resources is some how deficient because they worry about the financial burdens of a serious health condition.

BTW, I have walked the journey with family members who were more than willing to give every penny they had in order to obtain high level care. Unfortunately, when you don't have pennies to give, the options you have to even get a Doctor's appointment become much more limited. So again, if you think worrying about the money somehow makes somebody a less loving or caring person, then I really don't have much to say other than I disagree.

 

[eliza61]

The thing about money is, when you have it then it is infinitely easier not to worry about it and concentrate on things such as health.
As much we'd all like to believe that money isn't a factor in a long illness, the fact of the matter is that in addition to the treating of the illness, life always goes on in the background. The mortgage needs to be paid, the electric company still wants their money, and food has to be bought and kids needs shoes.

Since you were just awhile back explaining to everybody that you have a financial advisor who had grown you and your husband's investment assets to $5million dollars, as well as your reported 7 figure yearly income --- then it isn't really comparable to say you were able to sit in the ICU and not think about money and believe a young couple with a new baby and without those sort of resources is some how deficient because they worry about the financial burdens of a serious health condition.

BTW, I have walked the journey with family members who were more than willing to give every penny they had in order to obtain high level care. Unfortunately, when you don't have pennies to give, the options you have to even get a Doctor's appointment become much more limited. So again, if you think worrying about the money somehow makes somebody a less loving or caring person, then I really don't have much to say other than I disagree.

Oh no Ritae and to pp, if that is how it came across definitely apologize.

and that's my point Ritae. How did having a good salary and scrimping and savings Help??? is my late husband any less dead? Was the outcome any better now because I can retire a few years earlier? or would I have been happier if we had worked less, enjoyed life a bit more and took more chances?

Now personally when we found out his condition was terminal, we actually didn't give a rats behind about the mortgage. didn't pay it for about 4 months because we were concentrating on other things. my youngest came home from college (lost that tuition money) and my oldest dropped out also.

Same thing with my baby brother, lost his fight at 52. same scenerio.

So maybe those things have put me in the anti dis perspective but I do apologize again, I would never assume some one else choices are not right for them.

so yes I do encourage my sons to save 10% of their salary but this term one of them will get an opportunity to go abroad which will mean they won't be working or saving. it may also mean they will come back in their mid 20's with no money in a 401K, IRA or any thing else. I'm campaigning hard for them to go

I'm teaching them to live my tag line.

 

[ZephyrHawk]

but isn't it equally a bunch of hooey to assume because one parties in their twenties, one is "irresponsible" and will suffer later in life?

I partied hard in my 20's, mainly because I thank the good lord that I grew up in an age where no one expected you to have it all together at 13. I lived in NYC had a blast and managed to still save, work and retire (or at least I'm retiring next year)

No I no longer go with the expectation of living to 90. In the last 5 years my husband, little brother and good friend all died before 55. I have one Aunt who is turning 100 and I'm following her advice, live like there is no tomorrow because you maynot have one.

Well, I'm glad it worked out for you, but in all honesty, I tend to think you're the exception, and not the rule. I have a lot of friends who didn't think about saving in their 20s, and it's biting them back now even though they're only in their 30s. I am one of those people who had it together at 13, and not because I felt I had to. It was more that, even back then, I could see other people spending stupidly on frivolous stuff, and then not being able to afford what they really wanted. My DH has the mentality you espouse, and he would have had us spending all our cash on constant vacations while we were young. However, he sees now the benefits that were reaped from me making him hold back just a bit. I mean, it's not like we lived as paupers, but we were careful.

I'm sorry for your losses, and that you no longer expect to have a long life. I am looking forward to mine. I, too, have a 100 year old great-aunt. Combined with my grandmother and great-grandmother, both of whom lived into their 90s, her very existence proves to me that I have the chance to stick around that long. Unlike her, I don't want to be house-bound and fully dependent on my children for care and socialization. Sure, a bus could hit me tomorrow, but at least I know I've set up my DH and my DD to be able to go on well financially without me there. They will travel and enjoy life, because I prepared for the eventuality that I might not be able to enjoy it with them.

 

[DisneyPrince1982]

I'm with Eliza and the author. Your 20's should be spent making memories, traveling, going on adventures, not worrying about trying to save every penny. Generally speaking, your salary during your 20s will be minimal compared to what you will make from your 30s through 50s. Yes yes yes I know compound interest. What you don't know about compound interest is that most people are incapable of managing their own money and end up suffering significant investments gains. It only seems on the Dis that investing is full proof and people seem to make 5 to 10% a year without any sort of issue.

 

[Dakota731]

Your 20's should be spent making memories

I think you can make memories and have fun in life while still saving and being responsible. Who says everything has to cost a fortune to be memorable? Once when I asked my kids their best childhood memories, it's wasn't an expensive trip to Disney or a cruise we went on, it was hide and seek in the backyard and when I played Marco Polo with them in the pool!

your salary during your 20s will be minimal compared to what you will make from your 30s through 50s

Not always - those years are sometimes when one parent becomes a stay at home parent, not to mention the expenses of teenagers and saving for college! I think you can have the best of both worlds saving for retirement at a young age, not spending frivolously and yet enjoying life.

 

[AquaDame]

Generally speaking, your salary during your 20s will be minimal compared to what you will make from your 30s through 50s.

In my opinion this right here is the main problem... I know that in the past it was true, but nowadays I am not so sure. Raises and promotions are rare - of the places that do give them yearly you are lucky to see 2-4% in any given year, enough to keep up with inflation, and it is far more common to fill upper positions with outside candidates. No one gets 'groomed' anymore - if you want to move up you have to bust your *** and get a job elsewhere where you START in that position. Not much time left over to blow through your paycheck on travel and fun if you are busting your *** to get ahead and if the end goal is being comfortable, then why on earth wouldn't you put away the 10-15% now? Way better to get into the habit when its $100 here or there anyway IMO.

I feel like there is a generational breakdown here... I know I've had this argument with my parents before. They did it without thinking - life shuffled them along fairly effortlessly from high school (almost failing grades BTW) to entry level up the ranks at their one and only company and by the time they were in their mid thirties they already had two kids, a house, and a good retirement plan going just by doing what they were told. It was so easy for them that they think there must be something wrong with us if we can't just go on auto pilot and have it go as well. Cest la vie.

The best idea is do both. Pay yourself first into your retirement then play with the leftovers.