The first example is a junior level social worker -- that's fine, but come now: we all know that social work is not a high-paying industry.
The second example is a lady with 76k in debt, who has managed to pay down nearly 70% of it. Somehow this doesn't qualify as savings to the author.
The third woman actually makes a lot (they won't say how much) and has "achieved financial stability" (thus undermining the thesis of the article), but sends "the majority" of her paychecks to her family.
Finally, by the fourth example: someone with three jobs, who still manages to save $200 a month! I do feel for her, though. (Note to author: why in the world would you bury this example??)
The fifth example spends on expensive exercise classes and "also likes to go out to dinner with her friends"...but still saves $600 a month.
For the very last example, we have a 28-year-old man, earning well below average in NYC (90k a year), who nonetheless saves $2,000 a month. I'm sensing a bias here.
This is a ridiculous article. It should be titled: "These 20-somethings mostly manage to save despite difficult life choices and low incomes, and so can you."
> The first example is a junior level social worker -- that's fine, but come now: we all know that social work is not a high-paying industry.
This is an unfair dismissal. Most industries are not high paying, therefore most workers are not earning enough to save. You're basically saying "they're not saving because they're not earning more!" Also, what is your proposed solution here? To stop having social workers?
> someone with three jobs, who still manages to save $200 a month!
Saving $200 a month is basically nothing, especially in NYC. It would take multiple years just to save a few months worth of rent.
> Also, what is your proposed solution here? To stop having social workers?
Training for a job that pays below what you need to live comfortably is a choice. You may feel passionate enough about that job that you are willing to accept the consequences of a low salary. If you are not, then you should not train to do that job.
I do sympathize, as it's essentially impossible for a 16- or 17-year-old to fully understand the lifetime ramifications of the profession they're about to choose.
But if people stopped making dangerous financial compromises to take jobs they are passionate about, then those jobs will either have to get funded more such that the salaries go up, or yes, they'll cease to exist.
I think social work is a job that's extremely valuable to society, so I would hope that, in the face of a shortage (due to people not wanting to take the job because of low pay), legislatures and whatnot would vote to fund it more. But that's up to communities to decide.
> Saving $200 a month is basically nothing, especially in NYC.
The woman who saves $200/mo (the article actually says $200-$300/mo, so it's a bit better, even) lives in Bensenville, Illinois.
I'm not dismissing the person. I'm saying: if the author's purpose is to generalize from this example to all 20-somethings, it's obviously biased. Placing this example first was an editorial decision, and it's designed to elicit sympathy. Imagine if the author had led with the 28-year old NYC resident who saves 2k a month.
Also, I just want to add: I'm not engaging you in a debate about whether or not social workers "should" be paid more. I don't run the world.
Someone with the skills to be a social worker, on average, can use those skills for higher paid work.
They are knowingly trading the good feeling they get when helping people for the cash they could get by being a cold capitalist. You can make the argument social workers should be paid more but probably not the argument the person is employed in the highest saving ability profession they could reasonably hope to work in.
This feels a lot like the lectures these people are tired of. "Why didn't you pick a higher-paying career, why did you go to college if you couldn't afford it, why not cut out all unnecessary expenses and stop seeing your friends".
Yes, all these people could probably make different choices to save a bit more money, but a) min-maxing life like that sucks, and b) most people constantly giving this advice didn't do that themselves. Is there a single person in America who:
1. At 17 years old ignored every single adult in their life and wisely chose to go to trade school instead of college because their 30-year projections of their own life showed loans might be too much of a burden
2. Stifled all personal ambition and passion and chose a career with the most objective earning potential
3. Cut off all friendships and moved to the lowest cost-of-living area where they could still find a job
4. Lived like an ascetic hermit until they had a large enough emergency fund in the bank
The answer is no, this person does not exist, if they did they would be miserable, and nobody wants to live in a world where this lifestyle is necessary for an average person to feel financially comfortable.
Edit: Also, when you describe $40,000 as a "low income", are you aware that the median income for a 20-24 year old is less than that?
I am certain that people who want to read an article with this title are convinced that life has dealt them an unfair hand, and are willing to ignore or dismiss every example to the contrary.
...as this author has almost systematically done. It's not really a "lecture" when I'm just re-stating the facts in the story, is it?
> This feels a lot like the lectures these people are tired of.
How do you figure? The person you're replying to is pointing out that the majority of people profiled for the article seem to be doing just fine: they are saving at a decent (some at a more-than-decent) rate, and are living fairly comfortably. Lecturing them about something they're already doing seems pointless.
Only two of the people profiled in the article seem to actually be struggling, and might get lectures they're tired of. If the others are getting these lectures, then whoever is doing the lecturing clearly doesn't know how well they're actually doing!
You are replying to something that the grandparent did not actually write.
> when you describe $40,000 as a "low income", are you aware that the median income for a 20-24 year old is less than that?
Are you aware that something can be low even when there are other things that are even lower? Also I don't see where the parent mentioned "$40,000" at all, so maybe you clicked the reply button on the wrong post?
I think you laid out nicely why I stopped paying attention to both NYT and WaPo. They might be the best newspapers in the country and the "paper of record" but there's way too much of this shaping the story to a desired narrative rather than the facts that happens. It's sad, because there are so many stories out there in the world that need to be told. Each of the examples you gave has way more interesting subject matter - how many young people are supporting family? How did a young person attain financial stability so quickly? How does a young man making well below average manage to save so much? And on and on. But it likely caters to their demographics and/or people buying newspapers (or - whoever paid to submarine this story) to spin that young people today are lazy and not saving. Yawn.
Not sure about average in NYC, we have a lot of millionaires that will drag that up, but he’s well above median household income, which is something like $70k.
I mean, sure. But my point remains: 90k is not even remotely a lot of money in NYC, even if it's above the median.
Anyone who manages to save 24k a year on a 90k salary in NYC -- where the median studio apartment will set you back more than 2k a month and coffee and lunch out can easily exceed $20 -- is doing a good job.
> For the very last example, we have a 28-year-old man, earning well below average in NYC (90k a year), who nonetheless saves $2,000 a month. I'm sensing a bias here.
$90k a year is definitely not "well below average in NYC" - median household income is only $70k a year! (1)
> The second example is a lady with 76k in debt, who has managed to pay down nearly 70% of it. Somehow this doesn't qualify as savings to the author.
> The third woman actually makes a lot (they won't say how much) and has "achieved financial stability" (thus undermining the thesis of the article), but sends "the majority" of her paychecks to her family.
I’m simultaneously thrilled that I could pay 13k in medical bills in a recent family medical crisis, and very well aware that every time I’m able to do that kind of thing I have exactly the same savings of basically fuckall as I’ve always had. I’m similarly thrilled that I was able to pay off all of my outstanding debt after a few months not really recovering from burnout, again with approximately dick in savings. Neither of these achievements I feel bad about, but neither of them give me any kind of security in the sense people mean by “savings”.
Granted I’m 40, so I’m just resigned to probably making do until I don’t. So at least I don’t have 20 more years of that understanding to make do with people telling me I’m better off than I am.
The whole premise of the article is beyond ridiculous - you are not supposed to be saving in your 20s (which first half is spent on studies for many) but enjoying the life, whatever that means for you! Once responsibilities like parenting and career ladders come into play its too late, there is no going back to that sweet careless freedom.
If I had a dollar for every person telling me 'I should have traveled the world more when I was young', that would be quite a sum. Backpacking can be done extremely cheaply in places like India or Nepal, in 2010 I spent roughly 500$/month all costs included there. Was it fancy snobbish type of trip? Heck no, riding on top of buses or cramped inside in fetal position for 12 hours straight next to chickens, eating in local dhabas, and still those were the best moments of my life, 3 months felt like 2-3 decades there. As a bonus such an experience will make you a better person overall, certainly it worked for me.
You simply can't get this kind of exposure to the real world in any other way, expensive organized trips certainly don't do same magic.
Alternate view: Early life is the best time to save because of compounding interest. A dollar saved in your 20s has far more lifetime value than a dollar saved in your 30s, 40s or 50s. A year spent horsing around in Nepal "finding yourself" could easily mean having to delay retirement 5 years. I'd rather goof off and enjoy 20 carefree years when I'm old than 4 years when I'm young and have to work until I die.
The title has two parts, both of which you've provided ample commentary on, but only one explicitly. In Their 20s, Struggling to Save... and Tired of Being Lectured About It. "Ridiculous" and "and so can you" come down on one side of the question of, how should we morally judge people about their savings?
Also: Why would you already want to start saving in your twenties? If you have to pay debts etc, of course, there's nothing left for saving, but it'll work out in the future when the debts are paid.
The article may suck but every dataset I've seen supports the notion that average-net-worth-at-same-age took a sharp dive with Gen X, was even worse for Millennials, and is yet worse than that for Gen Z. IOW each generation has saved less than the Boomers when they were the same age, and the effect's gotten worse with each new generation.
Perhaps unsurprisingly—and, maybe even explaining most of the effect—home ownership rates at-same-age, by generation, look pretty similar. More 25-year-old Boomers owned their home, than Gen Xers, than Millennials, than Zers, and there's no later-in-life sharp uptick for those generations that makes up the gap. Worse with each generation.
And every attempt to fix this buy making housing affordable for younger people is met by extremely angry accusations of entitlement by the generation with the easiest access to wealth and good salaries in history, and spent their entire time on this earth making things shittier for next generations by making homes a for profit endeavor instead of a thing most people need, ignoring global warming and green energy for the enrichment of very few, removing and kneecapping what few social safety nets this country had, and treating people self medicating with drugs as criminals instead of people desperately trying to avoid burnout.
So yeah, any advice or claim from these people rings stupidly hollow, especially since they regularly seem to have no fucking clue what these young people are experiencing, because in their time, the minimum wage was enough to buy a medium size house, a small car, and have a family.
I actually agree with you. The problem is that you're doing a better job of making the case than the NY Times writer, who resorted to citing anecdotes that mostly contradicted the lede and tried to hide that fact.
> But saving is especially difficult right now because on top of student debt, housing and food costs remain high even as inflation has started to cool.
Statements like this are weird to me, because "cooling inflation" doesn't mean "prices are dropping", and suggests that the author doesn't really understand basic economic concepts. When inflation raises the price of something, that's it: that's the new price. Absent other innovations to make it cheaper (more efficient production or logistics, etc.), the price will not go back down. The hope, of course, is that once inflation is under control, wages will rise to counteract its effects.
> Theresa Fairless [...] said paying off student loans was her priority. Ms. Fairless graduated from college in 2018 with about $25,900 in government loans and $50,000 in personal loans.
Now I don't know the details of her loans, but this was a mistake I made in my 20s: if your interest rate is low, your priority should be saving and investing, not paying off the loans. Obviously you still need to make the minimum payments.
Granted, investing has not been great over the past year, so it probably has been a good idea to pay down debt more aggressively than in prior years.
I had a government college loan at 3.5% that I absolutely should not have paid off early. I had a private loan as well that was variable, and I think when I paid it off it was a little over 4%. Still questionable; maybe should have put the extra cash toward investments rather than the loan. But at the time I didn't really know what I was doing, and was also worried about the variable rate rising too much.
(Her loan amounts are also in line with what I had... well, I guess technically lower than mine, considering inflation over the past 20 years.)
A couple paragraphs down it talks about how she is saving and investing, has a $10k emergency fund, and is still able to give her mom some money to help her out. So... it seems like she's doing just fine? Seems better off than a ton of people, anyway.
Yes it is called inflation. That 3.5% loan principle and payment has become 2% less valuable most years, and recently it has become 9% less valuable. So if that money was put into buying assets that the OP needed, that would be risk free gain.
Also the tax deduction you point out is nullified by paying off the loan. The deduction is on student loan interest. So now that is lost every year. If someone qualifies for that deduction and inflation is normal/high it is pretty hard for 3.5% to be worth paying off early.
If you have subsequent expenses that require credit card debt, or a car loan, it's better to have cash savings available to reduce that. You can't unpay a 3.5% loan to get back money to pay off a 20% loan.
On the "cooling inflation" part, there's a different interpretation of what she's saying that I think is actually true and meaningful. Even though the rate of broad increase of the price of services and goods has declined recently (inflation has started to cool), the ratio between housing + food costs and income is still elevated (housing and food costs remain high).
The alternative is possible, that housing and food costs would remain steady or even decline while other prices increased, bringing the ratios back to more historic levels. But, this doesn't seem to be happening.
It's an intentionally vague description that lets the NYTs writer off the hook for not having to be more specific about something which is more complicated and doesn't understand that well.
> Ms. German-Tanner said 20-somethings were often encouraged to take financial steps like build emergency funds, save for retirement and pay off debt. They’re advised to invest when the market is down and to start thinking about their futures as early as possible.
"Build an emergency fund" is basically impossible for a lot of people. I remember hearing that advice. The problem was that food, housing, my car, and related necessary expenses ate up most of my paycheck. Getting rid of cable would have saved a tiny bit of money, made life miserable for me inside my small apartment, and contributed approximately nothing to an emergency fund equal to even one month of income. I knew it would be nice to have more money in savings before anyone told me.
> I feel like the older generation is constantly pushing you to do stuff like they did when they were in their 20s, but it’s not even comparable to when they were in their 20s
Anyone that says this does not understand what it was like for the older generation. Most of the time if someone is pushing financial advice, they're either trying to sell you something, or they're trying to help you avoid the problems they faced. It was never easy.
I'd even say that it was harder since nowadays there are various social programs, not to mention "helicopter money". Until around after WW2 if you didn't work, you got nothing.
The woman who is not thinking about retirement savings but is doing Barry’s, yoga, and ClassPass feels like she has the opportunity to make better financial choices, unlike some of the others that are just clearly in poverty. Those class-based gyms are stupendously expensive, $30 or more per workout. Compares unfavorably with a regular gym membership or buying running shoes or a bike, depending on what you’re into. Lots of outdoors opportunities in Colorado too.
I work at FAANG and just generally see so much lifestyle inflation from coworkers, even at high incomes. Taking Ubers everywhere instead of the subway or bikes, $20 cocktails, fancy restaurants that aren’t really that much better, those high price fitness classes… I interact with a lot of people at high levels who have been there for a while, and often wonder why they aren’t retired yet.
I work at FAANG and just generally see so much lifestyle inflation from coworkers, even at high incomes. Taking Ubers everywhere instead of the subway or bikes, $20 cocktails, fancy restaurants that aren’t really that much better, those high price fitness classes… I interact with a lot of people at high levels who have been there for a while, and often wonder why they aren’t retired yet.
The salaries are so much, especially with stock, perks, bonusses, raises, etc. that they still probably are doing well. The biggest cost is having kids, cause then you have wife, healthcare, college, etc. (assuming single income household).
This is such a stupid take. Guess what, those little expenses DON'T add up. It turns out pretty much no small transactions you avoid to save five bucks here and there can't actually compete with costs of rent going up 80% over the course of five years.
I live so frugally I have an entire years worth of cash in my bank, despite only making $65k (underpaid even for an area that has low SWE pay and a company that openly targets low SWE pay) and spending over $1600 a month in rent and utilities. But I still can't afford a house anywhere within 100 miles. I can't have a hobby that requires any extra space. Rent has gone up by $15000 a year, everywhere.
Why the hell should we get advice from the generation that lived through the easist access to well paying jobs and investments pretty much in history? They literally have no idea what this is like. They lived through a time where you could walk into a place just out of highschool and get a job that you could almost afford a brand new house with. They lived through a time where employers would train you, pay for you to learn new things, and expect to move you up through the ranks so you could be more useful and make more money. They lived through a time where fretting over a hundred dollars difference in a living expense was a common thing. They lived through all this and STILL didn't plan for retirement or save money for emergencies.
So yeah, they have no good advice to offer us, because they genuinely don't even understand how hard it is to spend literally half your income on a roof over your head.
They do add up. No, you're not going to be able to afford a house simply by dropping the $8 lattes, but your chances improve greatly if you avoid the overall lifestyle inflation and always-be-spending mentality. A major symptom of lifestyle inflation is paying people to do things you can DIY. I work with perpetually broke people who pay a nanny/housekeeper, pay people to fix their car, pay plumbers, and so on. The unnecessary cost of always defaulting to "pay someone" really does add up. Plus all the eating out, streaming subscriptions, gym memberships, and so on add up to a significant chunk of savings.
At least two of the women (the 2nd and 3rd profiled in the story) are pretty much killing it. One has an emergency fund over $10K, is regularly saving additional money, all on a $65K income at age 25. That's got to put her in the top 10% of 25-year olds. The third is absolutely crushing it by any reasonable guessing at her financial flows.
> That's got to put her in the top 10% of 25-year olds.
I think that supports the article. That someone with two-months of income saved up would be in the top 10% of her age group isn't a great sign about the state of her age group.
Looking back, our retirement saving really started in the mid-late 30’s. No kids, two incomes and finally above entry level salaries. Continued through our 50’s. Only out of school mid 20’s and married a few years after than. No chance to really accumulate then.
Yeah, it's interesting that this is getting treatment that sounds like it's a new phenomenon.
I was born in 1981, my family was comfortably middle class. I left college in the early 00s with a decent chunk of debt, and couldn't really start saving until I was nearly 30.
Yes, I get that many college graduates today are saddled with more debt than I had, and inflation and rising housing costs aren't helping, but is it really that different? It seems like the severity is worse, but the tune is the same.
Same here, by mid 30s savings started becoming meaningful.
I always interpreted the "always save some" mantra (which was a mantra as long as I can remember) as a way to form habits, not to really accumulate any large amounts of retirement funds.
Saving is good. Getting the 401k match is good. Have no experience with the cash flow requirement of kids or of hitting the startup lottery. But find the balance between today and tomorrow because too much of either isn’t a win. And things might not be quite what you’d like tomorrow.
Yes, enough of the "stop spending so much on {coffee, toast, Netflix} " advice. Or the lectures about saving. Even though I don't usually agree with the NYTs politically, I have to admit this is not helpful. The issue is costs keep rising faster than inflation, wages. Insurance, healthcare, childcare, tuition, etc.
I am currently in my mid/late 20s and living in Latvia (Eastern Europe). After getting my Bachelor's and Master's degrees from a local university, working for about 5 years with gradually increasing salaries/hours (started while studying), saving and/or investing on average around 50% of what I make, I have about 50'000 Euros saved up.
It's better than some of my peers, worse than people in the more wealthy countries, but still feels both like a necessity and something that's also not enough at the same time. In the last year, I've seen my investments (bank managed funds) go from being +10'000 Euros over the value at which I got in, to being in the red, to slowly recovering now. The inflation isn't all that good, either.
I'm taking a short break from working altogether to upskill myself and work on some personal projects, so it's nice to have savings for cases like these (as well as things like unforseen medical expenses, though most are manageable here), but something tells me that I'll need to keep living a somewhat spartan lifestyle, getting some limited peace of mind in exchange for that, saving similarly wherever I work next.
To be honest, I feel bad for people in high cost of living areas, especially those who have cars and families to take care of, as well as debt - the economy should probably be in a better spot, and certain groups of services should be more affordable than they are now.
I am overjoyed to hear that you are able to take sabbatical to upskill. That is a dream of mine… unfortunately I’m burned out from the slog of living paycheck to paycheck.
28 y/o. Worked three jobs prior to COVID. All three jobs evaporated in the same week. Moved from Midwest to California seeking opportunity. Now I’m serving a low-tier IT role making 55K in SoCal and it’s… really depressing honestly. I feel like I’m stuck here.
The following might sound a ridiculous suggestion but is the kind of thing I did in my 20s at times. Could you drastically cut your cost of living for a temporary period, in order to, while working, pay off bills / get some savings, and/or, when not working, do a sabbatical and up-skill? I mean by doing something radical like, live in a tent for the summer, house-sit, work a few hours at a backpackers hostel in return for somewhere to sleep, live in an old bus or trailer somewhere - some rather basic accommodation that only a young-ish person can really cope with that is super cheap. Maybe somewhere connected to a farm where there's some free or cheap food. Maybe live on rice, beans, tortillas, pasta and basic fruit and veg for a bit? Or if that all sounds too wild or unrealistic, how are your qualifications? Could you study part-time for a decent university qualification if you haven't already got one, via a state uni possibly distance or possibly local? Or merely a shorter bootcamp and make sure you shine at it? Might be a slog but it'd pay off in time. I don't think you are stuck actually because you are gainfully employed in the tech sector , you've got the crucial foot in the door, its a matter really of getting capability of programming and then demonstrating that to the right people. Being poorly paid but in the right industry I think has a definite light at the end of the tunnel. Good luck :)
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The second example is a lady with 76k in debt, who has managed to pay down nearly 70% of it. Somehow this doesn't qualify as savings to the author.
The third woman actually makes a lot (they won't say how much) and has "achieved financial stability" (thus undermining the thesis of the article), but sends "the majority" of her paychecks to her family.
Finally, by the fourth example: someone with three jobs, who still manages to save $200 a month! I do feel for her, though. (Note to author: why in the world would you bury this example??)
The fifth example spends on expensive exercise classes and "also likes to go out to dinner with her friends"...but still saves $600 a month.
For the very last example, we have a 28-year-old man, earning well below average in NYC (90k a year), who nonetheless saves $2,000 a month. I'm sensing a bias here.
This is a ridiculous article. It should be titled: "These 20-somethings mostly manage to save despite difficult life choices and low incomes, and so can you."
This is an unfair dismissal. Most industries are not high paying, therefore most workers are not earning enough to save. You're basically saying "they're not saving because they're not earning more!" Also, what is your proposed solution here? To stop having social workers?
> someone with three jobs, who still manages to save $200 a month!
Saving $200 a month is basically nothing, especially in NYC. It would take multiple years just to save a few months worth of rent.
Training for a job that pays below what you need to live comfortably is a choice. You may feel passionate enough about that job that you are willing to accept the consequences of a low salary. If you are not, then you should not train to do that job.
I do sympathize, as it's essentially impossible for a 16- or 17-year-old to fully understand the lifetime ramifications of the profession they're about to choose.
But if people stopped making dangerous financial compromises to take jobs they are passionate about, then those jobs will either have to get funded more such that the salaries go up, or yes, they'll cease to exist.
I think social work is a job that's extremely valuable to society, so I would hope that, in the face of a shortage (due to people not wanting to take the job because of low pay), legislatures and whatnot would vote to fund it more. But that's up to communities to decide.
> Saving $200 a month is basically nothing, especially in NYC.
The woman who saves $200/mo (the article actually says $200-$300/mo, so it's a bit better, even) lives in Bensenville, Illinois.
Also, I just want to add: I'm not engaging you in a debate about whether or not social workers "should" be paid more. I don't run the world.
Reduce expenses to live within your means, or figure out how to earn more money. The plight of... every person on earth
[EDIT] Assuming you don't have more than ~2 such urgent expenses per year, that is. And none worse than that.
They are knowingly trading the good feeling they get when helping people for the cash they could get by being a cold capitalist. You can make the argument social workers should be paid more but probably not the argument the person is employed in the highest saving ability profession they could reasonably hope to work in.
Dead Comment
Yes, all these people could probably make different choices to save a bit more money, but a) min-maxing life like that sucks, and b) most people constantly giving this advice didn't do that themselves. Is there a single person in America who:
1. At 17 years old ignored every single adult in their life and wisely chose to go to trade school instead of college because their 30-year projections of their own life showed loans might be too much of a burden
2. Stifled all personal ambition and passion and chose a career with the most objective earning potential
3. Cut off all friendships and moved to the lowest cost-of-living area where they could still find a job
4. Lived like an ascetic hermit until they had a large enough emergency fund in the bank
The answer is no, this person does not exist, if they did they would be miserable, and nobody wants to live in a world where this lifestyle is necessary for an average person to feel financially comfortable.
Edit: Also, when you describe $40,000 as a "low income", are you aware that the median income for a 20-24 year old is less than that?
...as this author has almost systematically done. It's not really a "lecture" when I'm just re-stating the facts in the story, is it?
How do you figure? The person you're replying to is pointing out that the majority of people profiled for the article seem to be doing just fine: they are saving at a decent (some at a more-than-decent) rate, and are living fairly comfortably. Lecturing them about something they're already doing seems pointless.
Only two of the people profiled in the article seem to actually be struggling, and might get lectures they're tired of. If the others are getting these lectures, then whoever is doing the lecturing clearly doesn't know how well they're actually doing!
You are replying to something that the grandparent did not actually write.
> when you describe $40,000 as a "low income", are you aware that the median income for a 20-24 year old is less than that?
Are you aware that something can be low even when there are other things that are even lower? Also I don't see where the parent mentioned "$40,000" at all, so maybe you clicked the reply button on the wrong post?
Deleted Comment
Anyone who manages to save 24k a year on a 90k salary in NYC -- where the median studio apartment will set you back more than 2k a month and coffee and lunch out can easily exceed $20 -- is doing a good job.
Not only that, but she manages to maintain an emergency fund of $10k. I... think she's doing just fine?
$90k a year is definitely not "well below average in NYC" - median household income is only $70k a year! (1)
1 - https://www.census.gov/quickfacts/fact/table/newyorkcitynewy...
> The third woman actually makes a lot (they won't say how much) and has "achieved financial stability" (thus undermining the thesis of the article), but sends "the majority" of her paychecks to her family.
I’m simultaneously thrilled that I could pay 13k in medical bills in a recent family medical crisis, and very well aware that every time I’m able to do that kind of thing I have exactly the same savings of basically fuckall as I’ve always had. I’m similarly thrilled that I was able to pay off all of my outstanding debt after a few months not really recovering from burnout, again with approximately dick in savings. Neither of these achievements I feel bad about, but neither of them give me any kind of security in the sense people mean by “savings”.
Granted I’m 40, so I’m just resigned to probably making do until I don’t. So at least I don’t have 20 more years of that understanding to make do with people telling me I’m better off than I am.
If I had a dollar for every person telling me 'I should have traveled the world more when I was young', that would be quite a sum. Backpacking can be done extremely cheaply in places like India or Nepal, in 2010 I spent roughly 500$/month all costs included there. Was it fancy snobbish type of trip? Heck no, riding on top of buses or cramped inside in fetal position for 12 hours straight next to chickens, eating in local dhabas, and still those were the best moments of my life, 3 months felt like 2-3 decades there. As a bonus such an experience will make you a better person overall, certainly it worked for me.
You simply can't get this kind of exposure to the real world in any other way, expensive organized trips certainly don't do same magic.
Perhaps unsurprisingly—and, maybe even explaining most of the effect—home ownership rates at-same-age, by generation, look pretty similar. More 25-year-old Boomers owned their home, than Gen Xers, than Millennials, than Zers, and there's no later-in-life sharp uptick for those generations that makes up the gap. Worse with each generation.
So yeah, any advice or claim from these people rings stupidly hollow, especially since they regularly seem to have no fucking clue what these young people are experiencing, because in their time, the minimum wage was enough to buy a medium size house, a small car, and have a family.
Statements like this are weird to me, because "cooling inflation" doesn't mean "prices are dropping", and suggests that the author doesn't really understand basic economic concepts. When inflation raises the price of something, that's it: that's the new price. Absent other innovations to make it cheaper (more efficient production or logistics, etc.), the price will not go back down. The hope, of course, is that once inflation is under control, wages will rise to counteract its effects.
> Theresa Fairless [...] said paying off student loans was her priority. Ms. Fairless graduated from college in 2018 with about $25,900 in government loans and $50,000 in personal loans.
Now I don't know the details of her loans, but this was a mistake I made in my 20s: if your interest rate is low, your priority should be saving and investing, not paying off the loans. Obviously you still need to make the minimum payments.
Granted, investing has not been great over the past year, so it probably has been a good idea to pay down debt more aggressively than in prior years.
I had a government college loan at 3.5% that I absolutely should not have paid off early. I had a private loan as well that was variable, and I think when I paid it off it was a little over 4%. Still questionable; maybe should have put the extra cash toward investments rather than the loan. But at the time I didn't really know what I was doing, and was also worried about the variable rate rising too much.
(Her loan amounts are also in line with what I had... well, I guess technically lower than mine, considering inflation over the past 20 years.)
A couple paragraphs down it talks about how she is saving and investing, has a $10k emergency fund, and is still able to give her mom some money to help her out. So... it seems like she's doing just fine? Seems better off than a ton of people, anyway.
Why? You knew of a better opportunity to make a risk-free 3.5% (less any tax deduction)?
Also the tax deduction you point out is nullified by paying off the loan. The deduction is on student loan interest. So now that is lost every year. If someone qualifies for that deduction and inflation is normal/high it is pretty hard for 3.5% to be worth paying off early.
“Risk free” is too high a bar for any investment, compare the expected outcome instead.
I see where you're going with your statement but I believe the wage-price spiral being a major cause of _this_ inflation is not a fact. :)
The alternative is possible, that housing and food costs would remain steady or even decline while other prices increased, bringing the ratios back to more historic levels. But, this doesn't seem to be happening.
It's an intentionally vague description that lets the NYTs writer off the hook for not having to be more specific about something which is more complicated and doesn't understand that well.
"Build an emergency fund" is basically impossible for a lot of people. I remember hearing that advice. The problem was that food, housing, my car, and related necessary expenses ate up most of my paycheck. Getting rid of cable would have saved a tiny bit of money, made life miserable for me inside my small apartment, and contributed approximately nothing to an emergency fund equal to even one month of income. I knew it would be nice to have more money in savings before anyone told me.
> I feel like the older generation is constantly pushing you to do stuff like they did when they were in their 20s, but it’s not even comparable to when they were in their 20s
Anyone that says this does not understand what it was like for the older generation. Most of the time if someone is pushing financial advice, they're either trying to sell you something, or they're trying to help you avoid the problems they faced. It was never easy.
I'd even say that it was harder since nowadays there are various social programs, not to mention "helicopter money". Until around after WW2 if you didn't work, you got nothing.
I work at FAANG and just generally see so much lifestyle inflation from coworkers, even at high incomes. Taking Ubers everywhere instead of the subway or bikes, $20 cocktails, fancy restaurants that aren’t really that much better, those high price fitness classes… I interact with a lot of people at high levels who have been there for a while, and often wonder why they aren’t retired yet.
The salaries are so much, especially with stock, perks, bonusses, raises, etc. that they still probably are doing well. The biggest cost is having kids, cause then you have wife, healthcare, college, etc. (assuming single income household).
I live so frugally I have an entire years worth of cash in my bank, despite only making $65k (underpaid even for an area that has low SWE pay and a company that openly targets low SWE pay) and spending over $1600 a month in rent and utilities. But I still can't afford a house anywhere within 100 miles. I can't have a hobby that requires any extra space. Rent has gone up by $15000 a year, everywhere.
Why the hell should we get advice from the generation that lived through the easist access to well paying jobs and investments pretty much in history? They literally have no idea what this is like. They lived through a time where you could walk into a place just out of highschool and get a job that you could almost afford a brand new house with. They lived through a time where employers would train you, pay for you to learn new things, and expect to move you up through the ranks so you could be more useful and make more money. They lived through a time where fretting over a hundred dollars difference in a living expense was a common thing. They lived through all this and STILL didn't plan for retirement or save money for emergencies.
So yeah, they have no good advice to offer us, because they genuinely don't even understand how hard it is to spend literally half your income on a roof over your head.
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I think that supports the article. That someone with two-months of income saved up would be in the top 10% of her age group isn't a great sign about the state of her age group.
I was born in 1981, my family was comfortably middle class. I left college in the early 00s with a decent chunk of debt, and couldn't really start saving until I was nearly 30.
Yes, I get that many college graduates today are saddled with more debt than I had, and inflation and rising housing costs aren't helping, but is it really that different? It seems like the severity is worse, but the tune is the same.
I always interpreted the "always save some" mantra (which was a mantra as long as I can remember) as a way to form habits, not to really accumulate any large amounts of retirement funds.
It's better than some of my peers, worse than people in the more wealthy countries, but still feels both like a necessity and something that's also not enough at the same time. In the last year, I've seen my investments (bank managed funds) go from being +10'000 Euros over the value at which I got in, to being in the red, to slowly recovering now. The inflation isn't all that good, either.
I'm taking a short break from working altogether to upskill myself and work on some personal projects, so it's nice to have savings for cases like these (as well as things like unforseen medical expenses, though most are manageable here), but something tells me that I'll need to keep living a somewhat spartan lifestyle, getting some limited peace of mind in exchange for that, saving similarly wherever I work next.
To be honest, I feel bad for people in high cost of living areas, especially those who have cars and families to take care of, as well as debt - the economy should probably be in a better spot, and certain groups of services should be more affordable than they are now.
28 y/o. Worked three jobs prior to COVID. All three jobs evaporated in the same week. Moved from Midwest to California seeking opportunity. Now I’m serving a low-tier IT role making 55K in SoCal and it’s… really depressing honestly. I feel like I’m stuck here.
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