36% of all Americans have less than $1,000 saved for retirement

[crisi]

I think finance in general is an area our schools should focus more attention on.

Hopefully it's better now but when I got out of HS and went to college I didn't have a clue how compound interest worked. Not only was I not saving but I racked up nearly $10,000 in credit card debt by the time I turned 21, I was almost 30 when I finally paid that off.

When I started saving it was because my work offered a 401k seminar and we were shown historical charts showing how saved money doubles every 7 years on average. The example given was putting $5,000 in savings at 30 years old would be worth around $160,000 35 years later at retirement. I signed up that day (about 10 years ago) and have been saving 10% ever since, my goal is to have a minimum of $1.5 million saved when I retire. Even if I never put another penny into my 401k I'll have over a half million at retirement simply from the money I've already saved continuing to compound. That's not a lot when factoring in inflation but it's still a very comforting feeling.

My kids math textbooks have so many compound interest word problems it isn't funny. Their Home Econ included consumerism. They require Micro and Macro Econ to graduate.

But some people are ready to hear this from the time they put their first quarters in a piggy bank, and some hear it their whole lives and turn around at 68 with "why didn't I listen!?" (or even "why didn't anyone tell me?")

We had it in my high school as well - I remember doing this 30 years ago - compound interest, balancing a checkbook, budgeting, investing. And I know some of my fellow alumni didn't hear it. And will tell you they never got it. "Really, I was sitting right next to you when we played the Stock Market Game"

 

[MrsPete]

Add to it the "market correction" that wiped out 60% of our 401k, and we are back under $200k towards retirement . . .

For anyone banking on a pension, time to face the reality that the odds are high it won't be there when you retire.

So you're saying we're all screwed either way? You're right that money can be lost either way. The real key is not to put all your money in any one place; it's unlikely that multiple sources will disappear.

Keep in mind that not all pensions are as outrageous as the ones you hear about in places like California. I've heard stories about places where a person could put in as little as 5 or 10 years and draw a pension for life. Someone on this thread mentioned something about pensioners drawing $200,000 per year. No one ever talks about my state pension, which pretty much offers, "Work 30 years, get a pension of about 2K/month after taxes for life". That's moderate, and moderate isn't newsworthy. Most pension plans are much more modest; thus, less likely to be unable to fulfill their obligations. I'm not saying that something tragic couldn't happen anywhere, but I do read the information that comes in the mail periodically about the strength of my state pension, and it doesn't share the problems that exist in Detroit and New Jersey.

Rather than a person's pension disappearing altogether, it's more likely that it'd be adjusted. For example, in my state teachers must work twice as many years to become "vested" in the pension program. In a state near us, I've heard that they're upping the total number of years that a teacher must work to draw a pension, and that regardless of years served no one can draw a pension 'til age 60 (?). I've heard several other possibilities about cuts that may become necessary to keep pensions solvent.

And regardless, if you've saved in multiple places, a pension cut won't be devastating. I'm counting on my pension. If it were to be cut (or even disappear), it would hurt my retirement lifestyle, but it would not mean I'd be forced to live on cat food. Someone else commented that pension money should just be extra money, slush money. Not many of us can afford to put in 30 years work for fun money.

That is true. I only make $38K as a 7th year teacher (and $150 a week in pocket after my pension is taken out and childcare costs) so it doesn't feel exceptionally high, but you are right, we are fortunate and my husband did a good job of saving before we met and had kids in our late 20's.

Sounds pretty high to me! I'm in my 23rd year of teaching, and I'm only making about 5K more than you.

I wouldn't turn down a pension, but I'd save my own money as well. The issue is that a lot of public jobs pay less - and often the justification for that included the sweet pension deals - often including medical as someone upthread talked about. So that is less in your paycheck, which means saving on your own for retirement has a burden.

But if someone were to pay me my non-pension salary - or even come close, and put a pension on top of it, I wouldn't say no......

Yes, it only makes sense to save money on top of a pension. Any one "pot of money" may dry up.

Yes, public jobs are pretty much the only ones that offer pensions. The trade-off has always been that you'll receive a low paycheck, but you'll have a decent pension at the end of a career.[/QUOTE]Yes, I agree. The problem isn't dumb/selfish, but it is ignorance of how money works. It doesn't take a great deal of sacrifice, if you start early, and you can never get that time back.

I think finance in general is an area our schools should focus more attention on.

It's taught in our schools. In fact, I just picked up a piece of lost paper from my classroom floor a couple days ago, and it was a worksheet about wise use of credit cards -- I think it was from a 10th grade Civics class.

The thing is, kids don't internalize the lessons on money and finance because it doesn't seem real to them. They figure it's all going to just work out, or they figure that they're going to make so much money that it'll be easy to live comfortably.

What DOES stick with kids is real-life lessons that their parents provide at home: Involving them with household finances, giving them an allowance and requiring them to buy certain things with that money, etc.

My kids math textbooks have so many compound interest word problems it isn't funny. Their Home Econ included consumerism. They require Micro and Macro Econ to graduate.

But some people are ready to hear this from the time they put their first quarters in a piggy bank, and some hear it their whole lives and turn around at 68 with "why didn't I listen!?" (or even "why didn't anyone tell me?")

We had it in my high school as well - I remember doing this 30 years ago - compound interest, balancing a checkbook, budgeting, investing. And I know some of my fellow alumni didn't hear it. And will tell you they never got it. "Really, I was sitting right next to you when we played the Stock Market Game"

Yeah, I can say the same type of thing. I've seen this material in my own daughters' high school work, and it's prompted conversations at home. I specifically remember my own algebra teacher making us repeat over and over, "I want a simple interest, no pre-payment penalty loan."

 

[katyjeka]

My dh and I have 1 credit card although we only use it once a year to keep it activated. We drive our cars until we have enough money saved to buy a new, it takes years!! We have retirement accounts set up and continue to save. This being said, I know no matter how much we save it will never be enough. Our neighbors were extremely frugal and saved, saved, saved. Wife gets sick, enters nursing home, insurance allowed 21 days, then their nursing home insurance kicked in. Well, they've depleted their savings, and have a reverse mortgage on their home. For them, saving every penny bought them very little time when the crisis hit. Sad but true fact, her roommate has nothing, very little social security, and her nursing home is covered. When we visit and I listen to them, I can't help but feel as if they are being penalized for being responsible their entire life, as they have nothing left. Our economy is not the only thing a mess in the US. I feel for those effected by job insecurity, and other issues that can effect saving for ones future. It can happen to anyone, so I choose not to judge those who can't save as they struggle from day to day. And to the twenty something crowd with no responsibilities, I'll listen to you in twenty years, when you've had children, mortgage, health insurance costs for more than one, house taxes, insurance, feeding a family of more than one, unexpected home repairs, braces, fundraisers, daycare, babysitters, college cost(as u return to school to keep up with young kids graduating), prescriptions copays for kids that get ear infections every other month, diapers, formula, laundry detergent for six, and the list goes on and on!!! At twenty, you should be able to save a TON, good thing, as when it's time for you to buy a house, they should cost a small fortune.

 

[crisi]

What DOES stick with kids is real-life lessons that their parents provide at home: Involving them with household finances, giving them an allowance and requiring them to buy certain things with that money, etc.

Maybe it sticks - it has a better chance of sticking if they get real home life experience AND reinforcement in school. But anyone who has raised more than one kid knows you can raise them the same way and have one where it sticks and the other where it doesn't - "we only eat healthy food in our house and model that" can mean you end up with one young adult who models the behavior they learned, and one who NEEDS to test it out for themselves with a diet of Doritos and Coke - and takes a few years to discover they weigh too much and don't feel good.

My baby sister was the second kind of kid - my middle sister and I pretty much internalized the lessons our parents gave us - financial, health, spiritual, etc. The baby HAD to test - on all fronts - and spent a few years as a trainwreck while she found her own path to the same information. Would have been a heck of a lot easier to have learned from others.

 

[Gumbo4x4]

Us too. I was making about the same salary as DH when I left the workforce to be home with the kids and move to a better school district. DH made up about half the loss over the first 5 years I was home and then lost that much and more to the housing meltdown (he's in construction). Our 2009 income was less than half our 2000 income, and while his business has rebounded some and I've picked up some odds-and-ends income from home we're still not back to where we were 15 years ago income wise. And of course in that time gas and health insurance have both doubled so the money isn't going nearly as far either.

Yup, I'm in the lighting business, so we took a big hit with the construction bust. Timing couldn't have been worse. Was right after DW took the lower paying job

 

[ellie05]

My dh and I have 1 credit card although we only use it once a year to keep it activated. We drive our cars until we have enough money saved to buy a new, it takes years!! We have retirement accounts set up and continue to save. This being said, I know no matter how much we save it will never be enough. Our neighbors were extremely frugal and saved, saved, saved. Wife gets sick, enters nursing home, insurance allowed 21 days, then their nursing home insurance kicked in. Well, they've depleted their savings, and have a reverse mortgage on their home. For them, saving every penny bought them very little time when the crisis hit. Sad but true fact, her roommate has nothing, very little social security, and her nursing home is covered. When we visit and I listen to them, I can't help but feel as if they are being penalized for being responsible their entire life, as they have nothing left. Our economy is not the only thing a mess in the US. I feel for those effected by job insecurity, and other issues that can effect saving for ones future. It can happen to anyone, so I choose not to judge those who can't save as they struggle from day to day. And to the twenty something crowd with no responsibilities, I'll listen to you in twenty years, when you've had children, mortgage, health insurance costs for more than one, house taxes, insurance, feeding a family of more than one, unexpected home repairs, braces, fundraisers, daycare, babysitters, college cost(as u return to school to keep up with young kids graduating), prescriptions copays for kids that get ear infections every other month, diapers, formula, laundry detergent for six, and the list goes on and on!!! At twenty, you should be able to save a TON, good thing, as when it's time for you to buy a house, they should cost a small fortune.

I disagree with you about saving a ton in your twenties. While you might not have formula or dippers, but you have student loans, you are just starting "real" jobs, trying to get a reliable car, etc. The job market has changed drastically even college graduates get pay very little, yet more debt from college. We are in our mid twenties and while yes we have been able put a good amount (for our age) in retirement we still not putting the 15% we should be putting for the past 2 years. And as you said sometimes no matter if you were financially responsible things happen that drain your savings this is what happen to us. We literally had everything that could have gone wrong all at once. Car trouble (both cars), A/C problems, dog 1 needed surgery on ACL, dog 2 gets rare cancer, Grandparents on both sides got really ill so 2 emergency trips (thankfully they both made it), and the list goes on and on. Literally the smallest bill we got form all the issue in the past 2 years was $1500 . we had 6 months of savings and another savings for the dogs, but that drained so quickly. We cut expenses but we still got into some debt. We are almost done paying it off thankfully we haven't paid interest because we got a credit card with 0 interest for the first 18 months. But we had to cut the 15% going into retirement to be able to take care of life happening right now.

We have friends and sibling in their twenties now and they are in similar situations not one is putting 15% into retirement not because they are spending money in martini bars, but truly because they just can't afford it.

 

[MrsPete]

I disagree with you about saving a ton in your twenties. While you might not have formula or dippers, but you have student loans, you are just starting "real" jobs, trying to get a reliable car, etc. The job market has changed drastically even college graduates get pay very little, yet more debt from college. We are in our mid twenties and while yes we have been able put a good amount (for our age) in retirement we still not putting the 15% we should be putting for the past 2 years. And as you said sometimes no matter if you were financially responsible things happen that drain your savings this is what happen to us. We literally had everything that could have gone wrong all at once. Car trouble (both cars), A/C problems, dog 1 needed surgery on ACL, dog 2 gets rare cancer, Grandparents on both sides got really ill so 2 emergency trips (thankfully they both made it), and the list goes on and on. Literally the smallest bill we got form all the issue in the past 2 years was $1500 . we had 6 months of savings and another savings for the dogs, but that drained so quickly. We cut expenses but we still got into some debt. We are almost done paying it off thankfully we haven't paid interest because we got a credit card with 0 interest for the first 18 months. But we had to cut the 15% going into retirement to be able to take care of life happening right now.

We have friends and sibling in their twenties now and they are in similar situations not one is putting 15% into retirement not because they are spending money in martini bars, but truly because they just can't afford it.

Thing is, today's 20-something have the idea that this is something new -- that those of us who are older had it easier when we were first out on our own, that jobs were easy to find, that saving was easy. Your generation does face some different challenges, but others have disappeared.

You mention student loans. I chose a specific school because it was close to home and inexpensive. It wasn't my first choice school, but it was the one I could afford. And I worked during school. LOTS. One semester I worked 3rd shift and then went straight to class without sleep, then I'd nap in the afternoons; it wasn't a good semester, but it allowed me to begin my adult life without debt. Today students seem to have accepted student loans as inevitable, which is a mistake. Other choices exist. Maybe not attractive choices, but they do exist.

My standard of living dropped in my first two years out of college. I lived in a rented house with a couple girlfriends. We didn't have a full-sized refrigerator in the kitchen; rather, we relied upon the little dorm fridges that we already owned. We ate less well than we had in the college cafeteria; that is, fewer vegetables and more ramen noodles. The place we lived was definitely less safe than the college campus.

As for jobs, when I completed my first degree, it took me a year and a half to find a job in my field. In the meantime, I did clerical work, which I hated.

You mentioned both cars breaking down at once -- I got married a year out of college, and the first thing my husband and I did was to sell one of our cars. Even with two degrees and both of us working (him in a professional job, me in that aforementioned clerical job), we couldn't afford two cars. No, it wasn't convenient. We lived way out in the country, and we had to coordinate our lives to fit the one-car thing, but we did it specifically because if we'd had two cars we wouldn't have been able to save. When we did add two cars (and convenience) to our lives, the difference in our budget was very, very noticeable.

Sick dog. We didn't have any pets at that point in our lives because we couldn't afford them.

Air conditioning. That is a luxury; yes, I'd cut out a bunch of other things before I'd give it up, but it is a luxury. We never had ours go out, but our heat did stop working once in March, and we had to tough it out for the little bit of remaining winter.

Similarly, we didn't have cable TV for years and years and years.
Internet didn't exist yet.
Cell phones didn't exist yet, but we had a limited house phone service program because it was cheaper; we'd purposefully make all our phone calls during our lunch breaks at work to avoid using our limited number of calls from the house.

But throughout it all, I saved. I saved because I understood that compound interest only works in your favor if you begin early.

 

[crisi]

My husband (college graduate 1988) poured coffee part time and did other odd sorts of jobs for almost five years before he ended up in a full time job with an ad agency as a copywriter. For most of that time, he and two other guys lived in a one bedroom apartment where their neighbors were either the worlds slowest drug dealers or the world's fastest prostitutes. There were multiple shootings in the half mile radius near their apartment. He didn't have a car, he took a bus or caught a ride with friends. No cable (that's funny!), no airconditioning, and the heat goes on November 1 and off March 1 - if its really cold in April or October, you wear a sweater (Minnesota). He ended up declaring bankruptcy to get a hold on his student loans (he did pay them, but under a trustee). No pets (who can afford to feed them). No health insurance.

Now, he wasn't putting any money towards retirement either during these years (its why despite him having out earned me now for almost 15 years, I still am wealthier than he is in terms of 401k assets) But when he did get that first copywriting job, he immediately started contributing at least to get the match - even before he bought a car (he didn't buy a car for another year) or moved out of his crappy apartment.

 

[pryncess527]

My standard of living dropped in my first two years out of college. I lived in a rented house with a couple girlfriends. We didn't have a full-sized refrigerator in the kitchen; rather, we relied upon the little dorm fridges that we already owned. We ate less well than we had in the college cafeteria; that is, fewer vegetables and more ramen noodles. The place we lived was definitely less safe than the college campus.

This reminds me of a conversation I had with one of our Deans the other day -- she was commenting that students and families are complaining about the cost of education going up, but that one of the primary things driving cost is that they also demand a middle-class standard of living while in college. Shared rooms and bathrooms down the hall aren't cutting it. So the college spends a fortune on expensive apartment style housing and fancy libraries and a huge student center with a theatre -- all of which has nothing to do with an education -- because students value those things when selecting colleges the complain about how the price has gone up.

I LOVED my freshman dorm experience -- shared shoebox bedroom, shower shoes and all. And it sure made those early years of poor married life seem extravagent by comparison :lol

But throughout it all, I saved. I saved because I understood that compound interest only works in your favor if you begin early.

Exactly!

 

[pryncess527]

LOL, they understand. Look, my job matches dollar for dollar the first 6% in your 401K AND for every year that you put in the full 6% the company gives you an additional 3% bonus on 4/15.

If the idea of 9% free money isn't moving them, compound interest especially with interest rates so low isn't going to sway anyone.

well, it swayed me. Looking at a table of projected account balance if I started at 18 vs starting at 40 was very convincing. Even at 18 I had dreams of retirement.

And it was a 19 year old who convinced me. So apparently SOME young people are swayed by the power of compound interest.

I do think high school is going to be too young for many of them to get this, it's something parents and financial advisors should speak to young adults about. Learning the math of compound interest is not the same as having someone help you think about how that can impact your future. That's what I mean by "really understanding" -- not just getting the formulas, but applying the concepts.

 

[eliza61]

This reminds me of a conversation I had with one of our Deans the other day -- she was commenting that students and families are complaining about the cost of education going up, but that one of the primary things driving cost is that they also demand a middle-class standard of living while in college. Shared rooms and bathrooms down the hall aren't cutting it. So the college spends a fortune on expensive apartment style housing and fancy libraries and a huge student center with a theatre -- all of which has nothing to do with an education -- because students value those things when selecting colleges the complain about how the price has gone up.

I LOVED my freshman dorm experience -- shared shoebox bedroom, shower shoes and all. And it sure made those early years of poor married life seem extravagent by comparison :lol


!

So your saying the average 10% increase in tuition since 1980 is due to dorms with single beds? Seriously

Couple that with an average 10% decline in student aid? I guess that's due to students wanting wifi.

2013 was the first year since 1980 according to US world news and report that college tuition did not rise almost 9% (and it still rose about 3%).

I went to the University of Pittsburgh, ain't that many buildings in the world to justify an increase of almost triple since the 70's.

Oh and my dorm (the towers) are pretty much the same.
Tuition and health care rates are rising exponentially.

Now my kid is at the University of Cincinnati. I missed the tour with the fancy dorms because he's in a building, no elevator, cinder block walls, teeny tiny with a roommate, showers in the central bathroom shared with 100 other guys.

Tuition went up 5% September of 2013.

 

[crisi]

There is a lot of reasons college gets more expensive faster. One is Baumol's Cost Disease, inflation hits harder against services - and education is primarily a service. There aren't a lot of productivity gains to be made in services. There are others - many colleges find their buildings all aging at the same time - suddenly it seems every building on campus needs major repairs or to be torn down. Another is the investment in technology schools have had to make. But one is that students coming in don't want to stay in a triple with shared bathroom shower for the entire floor in a dorm 100 years old that has no airconditioning and inadequate heat (my own dorm experience).

 

[eliza61]

Maybe it sticks - it has a better chance of sticking if they get real home life experience AND reinforcement in school. But anyone who has raised more than one kid knows you can raise them the same way and have one where it sticks and the other where it doesn't - "we only eat healthy food in our house and model that" can mean you end up with one young adult who models the behavior they learned, and one who NEEDS to test it out for themselves with a diet of Doritos and Coke - and takes a few years to discover they weigh too much and don't feel good.

My baby sister was the second kind of kid - my middle sister and I pretty much internalized the lessons our parents gave us - financial, health, spiritual, etc. The baby HAD to test - on all fronts - and spent a few years as a trainwreck while she found her own path to the same information. Would have been a heck of a lot easier to have learned from others.

and some just go the other way.

My youngest is a great saver but he;s 20 and he has all the compound interest talks, seminars and examples he's just choosing differently.

His goal is to spend 6 weeks on every continent on the planet (except Antartica, lol I nixed that one) by the time he's 30. I actually admire his goals as I think travel is a wonderful life experience.

So far he's done North and south America and Europe. Next year he's planning on Africa although he did want to do Russia. I nixed that one too. all on money he saved. So I'm probably the bad mom because I'm sort of happy he's having these experiences instead of shopping for long term health care.lol (I actually attended a Bar mitzvah where in lieu of college saving bonds they wanted donations to the kids life insurance policy.)
It does help that he's attending college without loans so he won't have that monkey on his back.

He's a smart kid so I'm pretty confident he won't end up under a bridge at 60.

 

[eliza61]

There is a lot of reasons college gets more expensive faster. One is Baumol's Cost Disease, inflation hits harder against services - and education is primarily a service. There aren't a lot of productivity gains to be made in services. There are others - many colleges find their buildings all aging at the same time - suddenly it seems every building on campus needs major repairs or to be torn down. Another is the investment in technology schools have had to make. But one is that students coming in don't want to stay in a triple with shared bathroom shower for the entire floor in a dorm 100 years old that has no airconditioning and inadequate heat (my own dorm experience).

don't the kids have to pay for those luxuries. Like I said I've got two, both away in dorms. If you wanted a private shower, your room and board cost most definitely skyrocketed.

Both are in dorms with roommates, communal showers, they do have air but it's not central and the heat is totally iffie. Believe me I got plenty of phone calls and texts because it was brutal in Cincinnati and the dorms were freezing.

They shut the school down a number of days due to excessive cold.

So if he wanted a single in a new building, cincy was all too happy to provide it, at a fee of a couple of thousand extra bucks

 

[pryncess527]

^^ Not always --ALL our dorms have private bathrooms now. You still pay for a single, but some of the luxuries have been extended to everyone in an effort to stay competitive.

So your saying the average 10% increase in tuition since 1980 is due to dorms with single beds? Seriously
.

No, I am not attributing all increase in tuition to dorms with single beds. Way to be hyperbolic . . . I was merely sharing a comment from someone with decades of experience in higher education who shared with me that students expectations of what is an acceptable standard of living have drastically changed in just the last 20 years. Based on my observations, I think she was on to something.

 

[dpswift]

I just wish I could have continued to save the way I used to. At 26, I set aside 17% with a 6.33% match. Now at 46, I set aside 5% with a 2.5% match. I make triple what I made then, but now I have a family and the astronomical increases in not only health insurance, but the things insurance no longer covers.
Stuff that used to cost me $75 OOP now run $2-3,000. And now I need them more frequently

Exactly! Not only have everyday expenses outpaced raises (3% is a common raise) But figure in recessions and unemployment. The big reason DH and I are lagging in retirement funding is that back 20 years ago you had to be on a job for a year before you could start contributing and then be up to 5 years for vestment. When you are in a job with many layoffs it hurts.

 

[pryncess527]

and some just go the other way.

My youngest is a great saver but he;s 20 and he has all the compound interest talks, seminars and examples he's just choosing differently.

His goal is to spend 6 weeks on every continent on the planet (except Antartica, lol I nixed that one) by the time he's 30. I actually admire his goals as I think travel is a wonderful life experience.

So far he's done North and south America and Europe. Next year he's planning on Africa although he did want to do Russia. I nixed that one too. all on money he saved. So I'm probably the bad mom because I'm sort of happy he's having these experiences instead of shopping for long term health care.lol (I actually attended a Bar mitzvah where in lieu of college saving bonds they wanted donations to the kids life insurance policy.)
It does help that he's attending college without loans so he won't have that monkey on his back.

He's a smart kid so I'm pretty confident he won't end up under a bridge at 60.

I fail to see how setting aside $20 a week would seriously jeopardize those goals. I'm not suggesting he'll end up under a bridge at 60, but I think the point many in this thread are trying to make is that even a small amount when you are young can make a HUGE difference later, without a significant impact on life now. Why do we have to pretend that the choice is to EITHER plan for the future OR to have fun? Can't people do a little of both?

 

[ellie05]

Thing is, today's 20-something have the idea that this is something new -- that those of us who are older had it easier when we were first out on our own, that jobs were easy to find, that saving was easy. Your generation does face some different challenges, but others have disappeared.

You mention student loans. I chose a specific school because it was close to home and inexpensive. It wasn't my first choice school, but it was the one I could afford. And I worked during school. LOTS. One semester I worked 3rd shift and then went straight to class without sleep, then I'd nap in the afternoons; it wasn't a good semester, but it allowed me to begin my adult life without debt. Today students seem to have accepted student loans as inevitable, which is a mistake. Other choices exist. Maybe not attractive choices, but they do exist.

My standard of living dropped in my first two years out of college. I lived in a rented house with a couple girlfriends. We didn't have a full-sized refrigerator in the kitchen; rather, we relied upon the little dorm fridges that we already owned. We ate less well than we had in the college cafeteria; that is, fewer vegetables and more ramen noodles. The place we lived was definitely less safe than the college campus.

As for jobs, when I completed my first degree, it took me a year and a half to find a job in my field. In the meantime, I did clerical work, which I hated.

You mentioned both cars breaking down at once -- I got married a year out of college, and the first thing my husband and I did was to sell one of our cars. Even with two degrees and both of us working (him in a professional job, me in that aforementioned clerical job), we couldn't afford two cars. No, it wasn't convenient. We lived way out in the country, and we had to coordinate our lives to fit the one-car thing, but we did it specifically because if we'd had two cars we wouldn't have been able to save. When we did add two cars (and convenience) to our lives, the difference in our budget was very, very noticeable.

Sick dog. We didn't have any pets at that point in our lives because we couldn't afford them.

Air conditioning. That is a luxury; yes, I'd cut out a bunch of other things before I'd give it up, but it is a luxury. We never had ours go out, but our heat did stop working once in March, and we had to tough it out for the little bit of remaining winter.

Similarly, we didn't have cable TV for years and years and years.
Internet didn't exist yet.
Cell phones didn't exist yet, but we had a limited house phone service program because it was cheaper; we'd purposefully make all our phone calls during our lunch breaks at work to avoid using our limited number of calls from the house.

But throughout it all, I saved. I saved because I understood that compound interest only works in your favor if you begin early.

No one said you had it easier I said things are very different. College tuition has gone up and student aid has gone down. My sister didn't go to her first choice she went to the cheapest choice, she also worked and had scholarship money. She still graduated with debt there was no way around it for her. DH instead decided to join the military and has managed to go to college too He is only 4 classes away from getting his associate. He will try to finish his bachelors before he retires without debt, or touching his GI bill (so we can pass it to our kids). But we had made lots of sacrifices for it. So I do understand that other choices exist.

Every single one of our friends that have gone to college and graduated are not working on their field they are working on whatever job they can get.

And the bolded was what I was trying to say is that life happens. We could afford both cars, we were saving what we should for retirement and had a savings at the time. Great that it worked for you to share a car with your husband. DH is in the military with his MOS there is just no way we could share a car.

When we got our pets we could afford it, heck we had money in savings for just that, but life happens things change. Circumstances change would I get rid of my dogs because of that? No never I made a commitment for life and we just have to deal with it.

And we are saving because we DO understand how compound interest change but that doesn't change the fact that we are not saving the 15% we should. The reason we don't have children now because it will be very difficult to save. Many people in DH rank have 4 children already.

As Eliza had pointed out most of the people she talked in her 20's can't put the 15-20% they should be putting for retirement for a number of reasons. As far as our friends and family in their 20's no one is putting 15-20% in retirement because they can't afford to not because they don't understand.

Edit:
By the way everyone I know including my sister had to share communal bathrooms in college st least for the first year, in my sister case it was cheaper for her to live off campus after the first year.

 

[katyjeka]

I don't want to argue, but I know many adults that have had to return to college to compete with the young crowd leaving college. So on top of everything else, they too have college bills. I don't want to sound like a complainer, I chose to have a family and wouldn't change a thing, however, I stand by my comments. At twenty, life is just beginning and saving does get harder as you get older.

 

[crisi]

I don't want to argue, but I know many adults that have had to return to college to compete with the young crowd leaving college. So on top of everything else, they too have college bills. I don't want to sound like a complainer, I chose to have a family and wouldn't change a thing, however, I stand by my comments. At twenty, life is just beginning and saving does get harder as you get older.

Which is part of the point - if you can't set aside something - not 15% or 10% but 3% or $20 a week or SOMETHING when you first get out of school, it DOESN'T get easier. Maybe you make more after a few years, but your expenses tend to escalate. Early marriage - two incomes, no kids - can be a sweet spot for a lot of people - but they often increase their expenses. Once kids come, its those kid expenses, and then you find yourself going to grad school at night to finish your MBA to compete - more bills. At some point, student loan bills get paid off, but they are often simply replaced with other bills.

AND its why you want to be careful about letting your kids take on the student loan monster. It decreases their opportunity to save when they get out of school - or do a lot of other things - buy a house, start a family.