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

[FairestOfThemAll37]

Glad I did it wrong, then. In my 20's I saved like mad and said no to a lot of "fun" but you know what? By the time I was 33 I had enough saved to essentially retire and do whatever I wanted for the rest of my life. Which is exactly what I've proceeded to do. I've had nearly 14 years now of all the "fun" I want without being tied to a corporate job. Had I blown it all in my 20's, I'd be working now and probably for at least another ten years. So thank heavens I did a lot of something wrong!

I'm going to go ahead and say that your situation is highly unusual. Most people cannot possibly save enough in their 20s to retire by 33. Nor can most people retire 14years into a job.

Hitting it big on an investment (unless you happened to be in a position of making and saving millions at a very young age) and banking millions in your twenties isn't exactly what the article was about.

Assuming a normal life, most people don't have enough to live on for 40-50years by the end of their 20s.

 

[gottalovepluto]

I think they're just using it as an excuse. I'm going out on a limb here but it sounds like life has never hit the fan for them. They have never been unable to get a job is basically what they are saying. They must have some sort of safety net in place, or now that I'm thinking it through it might be more likely their friend has a mommy-daddy safety type net in place and has convinced their friend safety nets are unimportant to people in their 20s. As someone in their 20s I've heard my peers say the same as is posted above. It works out fine as long as jobs are easy to get (so far that has only held true for my friends in Silicon Valley) and nothing bad happens. And even one of my friends in Silicon Valley had a long lag between jobs and had to eat through some savings, she was so grateful she had it.

 

[Disneefun]

I'm going to go ahead and say that your situation is highly unusual. Most people cannot possibly save enough in their 20s to retire by 33. Nor can most people retire 14years into a job.

Hitting it big on an investment (unless you happened to be in a position of making and saving millions at a very young age) and banking millions in your twenties isn't exactly what the article was about.

Assuming a normal life, most people don't have enough to live on for 40-50years by the end of their 20s.

I never said I hit it big on an investment. I said I worked. And I did. I went into a STEM field, got paid quite well, lived on about 20K a year and banked the rest. I also had a couple of part time jobs that I took mostly for fun reasons, but I banked that money, too. After 12 years (I graduated college at 21) I'd banked/invested over a million dollars (not counting investment gains) just by living frugally and working my butt off. No inheritance, no investment, no stock options. I still live very low to the ground, except for traveling, so my nest egg continues to grow. I withdraw at a rate lower than the growth, adjusting my spending for down market times.

Had I had a bunch of "fun" in my 20's, as the author does, and not saved, I'd be in the reverse boat, having to work into my old age. So saying that saving in your 20's is doing it wrong is ridiculous. You can save a ton in your 20's because it's one of the last times in your life that you aren't encumbered by family, college savings, kids expenses, mortgages, etc. You can either use your 20's as party time, as the author is doing, or you can knuckle down and build a solid future for yourself that will give you more options at a younger age than you could otherwise have.

People do it every day and on a lot less money than I was making. MrMoneyMustache has a whole website devoted to the topic. I just did it long before he made it into a "thing." I knew I didn't want to work the rest of my life, thought, "How do I make that happen?" and did it. Nothing special, other than avoiding debt, avoiding unnecessary spending, and having a valued and well paid skill set.

 

[barkley]

Let me give an example of one way I found a balance in my 20's. I used to go out with friends and/or coworkers 4-5 nights a week & typically down 2-3 cocktails a night. I was spending $50-75 a week on alcohol, and not getting even the slightest buzz on any of those nights. So, I started drinking water instead. Still went out, had just as much fun, banked the cash & used it for other fun stuff. You don't always have to spend money to "live life to the fullest". And sometimes the money we spend today doesn't hurt savings later so much as it blows our chances to spend it "later today" on something better.

my dd is learning this right now. she's 21 and since we live near the university she attends we offered that she could live at home w/free room and board so she could have some extra financial freedom with but also save some of her scholarship money. this lasted for freshman year when she decided she wanted to 'be independent' so she moved in with a pile of roommates. we forewarned her that she would have less expendable income b/c of the expenses-but what do mom and dad know????? we helped her make a budget to ensure her necessities were paid and she had a set monthly amount left over for food/entertainment. well, she did the typical college kid thing-still bought video games and went out to eat like crazy but shocker-she would run out of money before the end of the month so she would have to rely on the minimal food she had bought to get through. so she somewhat learns from that and kind of backs off the video game purchases (just puts a crap load on her yearly letter to 'santa')-but still is eating out like mad. same situation......for months on end the last 2 weeks of the month are largely ramen. the only thing that happened that finally got her to realize what she was doing was when summer break hit and all her dining out buddies left for the summer back to their parents homes. she ended up not wanting to go out alone so she started learning to cook a bit more and fixing her own food. after the first month she calls to share w/us her new earth shattering revelation (that she's sure no one has ever realized before) "IT'S SO MUCH CHEAPER TO MAKE THE SAME FOOD YOU PAY TONS FOR EATING OUT"rotfl2. (me) "really, um nice to know-i'll keep that in mind". so now the dd has a george foreman grill, a rice cooker and a crockpot, reads the newspaper ads, is REALY looking forward to the yearly canned goods case sale coming up, goes to Costco to get meat (that dad packages up in small packages) and actually has enough left over to still go out with her friends (though not for food-'it's a rip off mom'). her new goal is to move into her own place next summer. she knows it will cost allot more than what she's paying now but she's looking at how much she's saving by virtue of just choosing activities that don't entail spending allot (karaoke and trivia night at the local pub are very popular-she's not a drinker and she can get an unlimited refillable soda for a couple of bucks, and nosh on the free chips and nuts).


it's all about choices.

 

[amcnj]

Definitely agree with the "it's a balance" remarks. Some people wait for retirement to do things like travel, and then don't make it to retirement or find their health at that time won't permit it. So fi you can afford it, go for it while young. But it is also nice to be able to be able to retire when you decide it is time, and not instead be wishing you had saved more earlier.

Also those early years are a good time to invest in yourself so that your earning potential is enhanced for the rest of your career.

And a lot is very dependent on your own situation. Some may be able to do it all. Others have more financial constraints and the early decisions can greatly impact the rest of their lives.

 

[ZephyrHawk]

I'm going to go on a limb and guess that the author is not yet out of their 20's. Not so much from their perspectives on money, but from the way they seem to view their 40's as a time when "all is lost". The author keeps talking about what he or she will feel looking backwards when they hit that age, as if that's the ultimate end of their life. Obviously, anyone who lives to their 50's is way past being able to enjoy any aspect of their lives.

What a crock of hooey.

Look, it's nice and all that you want to adopt a "You can't take it with you" view on life. I tend to have that myself. But you know what else I have? The expectation that I'm going to live into my 90's. No, I can't take it with me, but gosh darnit, I am going to spend as much as I can before I kick it, and that means I have to save NOW so that I have the money to enjoy my retired life. My parents are in their late 60's and they spend almost all their time traveling. I basically don't know where they are for half the year. They aren't dead, they're living high off of what they saved during their youth.

So yeah, author, you can worry about how you'll feel in your 40's. Or you can worry about how you'll feel for the 50 years AFTER you hit 40.

 

[kamik86]

I am in my 20s (my signature is behind I'm now 28).

I have some savings but I also have some debt. I could have more savings but I do also like to go out to eat and live and take nice vacations. So I'm somewhat in the middle.

I own my home, have retirement savings, own my car outright (no loans)
I do have student loans though and a mortgage. I also own DVC.

I have two vacations planed next year. I took two this year.
I also know when to wait on something I cant afford.

 

[wilkeliza]

Article is totally wrong. If you are living so far out of your means that you can't even put aside $20 each month in your 20s then you are doing something wrong. All of my friends and I are in our late 20s and we can save up to 200 a month if we need to (planning for trips etc) but most of us put stuff away from our checks for a 401K or savings account. It is called responsibility.

You never know when your job could be gone or you face a hardship even in your 20s. My cousin is battling cancer. Her savings is all that is keeping her money situation afloat as she faces the idea of crazy medical bills. Did she not travel or see the world to have that savings? No, she tooks one or two small trips a year. What she didn't do was blow money on alcohol and unnecessary technology and phone upgrade. I can't tell you how many people we know who complain that they are broke but drink at bars like their life depends on it and have a new phone and laptop every year. Seems silly to live life that way.

 

[RitaE]

Oh pfffffftttttt.. I'm all for work life balance but rolling my eyes so far back in my head hurts

I’ve recently figured it out: This pressure, this third-party stress, is ingrained within us. It’s this looming doom our parents carved into our unconscious, only to come out anytime we make an impulse purchase or have to spend the night without Netflix.

Oh the poor dear. Her parents have burdened her with an unconscious doom and she might have to spend a night without Netflix. I weep in sympathy.

Just another person with a keyboard and internet connection who wants to declare -- anybody different than me is wrong.

 

[eliza61]

I'm going to go on a limb and guess that the author is not yet out of their 20's. Not so much from their perspectives on money, but from the way they seem to view their 40's as a time when "all is lost". The author keeps talking about what he or she will feel looking backwards when they hit that age, as if that's the ultimate end of their life. Obviously, anyone who lives to their 50's is way past being able to enjoy any aspect of their lives.

What a crock of hooey.

Look, it's nice and all that you want to adopt a "You can't take it with you" view on life. I tend to have that myself. But you know what else I have? The expectation that I'm going to live into my 90's. No, I can't take it with me, but gosh darnit, I am going to spend as much as I can before I kick it, and that means I have to save NOW so that I have the money to enjoy my retired life. My parents are in their late 60's and they spend almost all their time traveling. I basically don't know where they are for half the year. They aren't dead, they're living high off of what they saved during their youth.

So yeah, author, you can worry about how you'll feel in your 40's. Or you can worry about how you'll feel for the 50 years AFTER you hit 40.

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.

I don't have long term health insurance, have no plans on purchasing it nor to I lose sleep that at 90 I will need it. I'm no longer contributing to my 401K except the minimum to get the match. I plan on retiring in October and spending a month in Portugal and then throwing a month long party in WDW for families and friends. My goal... lol dying with 2.00 left in the bank.

That's why I have the tag that I have. Americans are so anxious about their future, they don't enjoy the present.

 

[PSUTraveler]

I couldn't even finish that article, and I don't agree with it at all.

I am in my early thirties, hoping to retire by 40-45. DH and I are lucky; we weren't saddled with student loans. DH lived at home after he graduated from college and before we got married. The last few years we've been watching our spending and trying to avoid unnecessary purchases. Do I feel like we're holding off on living? Not. at. all.

It's a matter of choices and priorities for us - getting the latest "tech" or eating at the best restaurants in town is not a high priority. We want to eat well and do so by cooking and eating at home. For fun we enjoy hiking and swimming. I'm a runner so I do end up spending a decent amount of money on new shoes and race entry fees. We love to vacation and have been to some incredible places in the last few years. I don't know if we'll be able to retire early, but I think we've struck a wonderful balance between saving for the future and making sure we are still able to live life now.

People do it every day and on a lot less money than I was making. MrMoneyMustache has a whole website devoted to the topic. I just did it long before he made it into a "thing." I knew I didn't want to work the rest of my life, thought, "How do I make that happen?" and did it. Nothing special, other than avoiding debt, avoiding unnecessary spending, and having a valued and well paid skill set.

DH is a huge fan of Mr Money Mustache!

 

[eliza61]

Also remember, this is written while he's 20. My life philosophy changed alot each decade

 

[Ladyhawke]

I think the author is both mentally and emotionally immature. She has a perceeption of what it's like to be over 40, that the young have. "When did our 20s start to feel like our 40s?"

Like life is dead after 40.

"When did we get weighed down with the same pressure and stresses as a woman with four kids and a second mortgage?"

She hasn't seemed to learn that life is about making CHOICES. That if she doesn't want 4 kids or Second mortgage and the stress of either of those, to not make decisions in her 30's that will lead her to those situations.

And the way she burns through money, she might wish she was dead than STILL be eating ramein noodles at 45, when that $60,000 pay raise never appeared and she didn't prepare for the longer journey.

Her generation is expected to live over 100. While at only a quarter of her way into her life, I get that she wants to have several experiences, she doesn't seem to have learned the value of being discriminating about what she chooses to spend her money on. She seems to be a Carrie Bradshaw (from Sex &The City,) wannabe. She's living in a big city, is a relationship blogger, and wants to go club hopping, living some fancy life, expecting to network and meet that person who will get her that $60,000 pay raise.

There is a difference in being financially irresponsible, spending money on impulses and splurges just to "live fully", versus calculated risktaking. Thoughtfully thinking through choices. Not EVERYTHING is worth spending money on.

There is also the concept of delayed gratification. Instead of spending in the now, for those expensive club drinks or a taxi, that she considers so important, think about a BETTER purchase to save the money for - for a BETTER class of experience.

I remember reading a different blog article that helped me. It was by Paul Graham called, " Stuff." He said, "The really painful thing to recall is not just that I accumulated all this useless stuff, but that I often spent money I desperately needed on stuff that I didn't."

You can read his article here:
http://www.paulgraham.com/stuff.html

 

[lovemygoofy]

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.

I don't have long term health insurance, have no plans on purchasing it nor to I lose sleep that at 90 I will need it. I'm no longer contributing to my 401K except the minimum to get the match. I plan on retiring in October and spending a month in Portugal and then throwing a month long party in WDW for families and friends. My goal... lol dying with 2.00 left in the bank.

That's why I have the tag that I have. Americans are so anxious about their future, they don't enjoy the present.

Eliza, I know your experiences have colored the way you see things but frankly things are a million ways different than when you were in your 20s.

If you hadn't done the right things, you wouldn't be able to retire early and spend how you intend to spend. That is part of planning for the future. Planning for the kind of future we want instead of "settling" for what we get.

I'm guessing due to your profession and your late husband's profession, you were probably grandfathered in with benefits and good health insurance. I know your family struggled with your husband's illness for a long time. It's the planning your family did that helped ease that burden of being able to take off time to spend with your husband and then grieve with your family. Was that the reason you planned and saved? Nope but thank goodness you all had the sense to do some planning.

I say all this because no one is saying don't enjoy life now but it has to be pounded in people's heads to save and prepare because things are just different. There are very few great benefit/retirement jobs and even less that have cadillac health plans that don't require people to stay up at night wondering how to pay the bills. I think unfortunate that your life didn't happen the way it was planned and it's not fair and just sucks but in the end you're still getting a lifestyle you planned and saved for for years. That is all that people are saying around here. No one is advocating giving up everything.

 

[RitaE]

I think the author is both mentally and emotionally immature. She has a perceeption of what it's like to be over 40, that the young have. "When did our 20s start to feel like our 40s?"

Well that and she seems to be under the really immature assumption that anybody that isn't her, probably wants to be her and is jealous.

I have a 22 year old. He's been a saver since grade school. We never really even had to try hard with him. He's a natural budgeter and money manager. One of his prize possessions when he was a little kid was that three chambered Save, Spend, Give bank. His hobbies are things like building his own computer, reading, and he likes to invest in the Stock Market and hang out on some of the Finance sites. He spends money, but he's never going to be the type that dreams of some life club hopping and buying $10 drinks and having "memorable nights" which to that author seems to be bar hopping and clothes shopping. That's not who he is, he's happy in his $25 blue jeans and south park t-shirts. He's happier at the used book store than he'll ever be in a night club. He's been talking lately about co-buying a small house with a friend, fixing it up, and selling it. And yeah, he has a bank account and if he does it, it'll be because he chose to put money into a bank account instead of live for the moment nightlife.

To just proclaim he's "really missing out" because he's doing the things that make him happy rather than the things that make that author happy is just really limited in viewpoint.

Now his older brother……would probably like to date that author.

 

[barkley]

Also remember, this is written while he's 20. My life philosophy changed alot each decade

unless the author started college at the age of 10 and then moved to new York at the ripe old age of 14-she's misrepresenting herself as 20-

"...They were getting married at 20 while we’re just getting our first apartments."

according to her bio on the site she's a 2009 grad of PSU who moved to nyc after graduation. me thinks that puts her true age much closer to about 28.


my life philosophy also changed allot as I aged up, but god knows when I was pushing 30 I sure wasn't self identifying with/as someone 20. if this article was actually written by a 20 year old I would continue to dismiss it but consider the source and think 'she'll gain maturity and insight w/life experiences as she gets older', but when I realize the author is likely close to 30 I just think that maybe the reason her parents are bugging her about her spending habits is because they are likely sick of having had to help financially support/safety net her for close to 12 years AFTER she became an adult yet she is still under the adolescent impression/habit that when you have little or no money that choosing to go out for fast food is some great personal sacrifice.

 

[aprincessatlast]

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!

 

[wilkeliza]

unless the author started college at the age of 10 and then moved to new York at the ripe old age of 14-she's misrepresenting herself as 20-

"...They were getting married at 20 while we’re just getting our first apartments."

according to her bio on the site she's a 2009 grad of PSU who moved to nyc after graduation. me thinks that puts her true age much closer to about 28.


my life philosophy also changed allot as I aged up, but god knows when I was pushing 30 I sure wasn't self identifying with/as someone 20. if this article was actually written by a 20 year old I would continue to dismiss it but consider the source and think 'she'll gain maturity and insight w/life experiences as she gets older', but when I realize the author is likely close to 30 I just think that maybe the reason her parents are bugging her about her spending habits is because they are likely sick of having had to help financially support/safety net her for close to 12 years AFTER she became an adult yet she is still under the adolescent impression/habit that when you have little or no money that choosing to go out for fast food is some great personal sacrifice.

28 is still in her 20s so not really misrepresentation on age. I agree though she is being bugged about it because she is 28 not because she is 21-22 acting like this. I started getting it this year as well since I just got engaged at 27. There was a lot of how much are you putting away talks for the fiance and I. IT was more that the family was worried we weren't going to be able to get a house or start a family as soon as we would like but once we broke down our savings and 401K and stuff they were all good with the trips we go on etc.

 

[Gumbo4x4]

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.

I don't have long term health insurance, have no plans on purchasing it nor to I lose sleep that at 90 I will need it. I'm no longer contributing to my 401K except the minimum to get the match. I plan on retiring in October and spending a month in Portugal and then throwing a month long party in WDW for families and friends. My goal... lol dying with 2.00 left in the bank.

That's why I have the tag that I have. Americans are so anxious about their future, they don't enjoy the present.

I don't think there's a thing wrong with partying in your 20's. I think partying to such an extent that you escape your twenties without a nickel to your name is irresponsible.

The thing about being 25 & single is that splitting a $10 pizza & a pitcher of margaritas with your friends is every bit as satisfying as a $60 steak - and probably a lot more fun. In my 20's, I didn't mind sleeping in a tent, half lost in grizzly country, with rain in the forecast. At 48, not gonna happen.

I mentioned on the community board that what I'll spend this year in medical & dental expenses (and insurance premiums) exceeds what I made in salary at 25. And that's with a healthy family. There's no way I'd be in position to do that had I spent like a drunken sailor in my 20's. Those kinds of habits are hard to break, and the realities of supporting a family & mortgage don't jive with such habits.

So yeah, have fun. But, don't blow it ALL. I didn't make much in my 20's, started saving late, but what I did sock away before my 30th birthday is over $100k today. It could have easily been twice that if I'd been more aggressive. Maybe that missing $100k is the price of fun. But, it WAS fun, and at least I have SOMETHING to show for it.

 

[Gumbo4x4]

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.