"If You Have Savings in Your 20s, You're Doing Something Wrong"

[LDAHL]

I've seen this article mentioned in a few different sites I follow:

http://elitedaily.com/life/savings-20s-something-wrong/1214445/

It sort of takes the "spend money on experiences" thing to an extreme, taking as a premise that you owe it to yourself and others to have the highest quality life possible in your highest quality decade of life.

My thinking was that money doesn't necessarily buy "fun" in anything like an amount proportionate to the expenditure, and that the peak capacity for enjoying life does not necessarily correspond with one's peak physical capabilities. I'm thinking life enjoyment stems more from experience, appreciation and the ability to distinguish between the important and the frivolous that requires most of us some years to develop.

I was never quite like this in my youth, but I would still love the opportunity to set my younger self straight on a number of important points. Not that I would have listened. Is it possible that you need life to punch you in the face a few times before certain lessons sink in?

[ApatheticNoMore]

I think they were maybe trying to live on TOO tight a budget (maybe too little income as well, I don't know) and they rebelled hard. So yea if you live in a cultural center and never enjoy any of it, it does kind of suck. The extra clothes you maybe don't need, but do go out and enjoy some culture or spending time with friends.

She seems very indiscriminate on her spending of money (perhaps again because of the rebellion), spending money = good = living life instead of spending money MAY be living life if it's what you have thoughtfully decided is worth spending on and avoiding it MAY be avoiding life depending .... and at other times spending money may just be a waste of money and rather empty when all is said and done.


This goes back to a piece of advice a very successful friend gave me: “Don’t save money. Make more money,” he nonchalantly stated, pushing me into a taxi.

oh the arrogance or the naivete or the privilege I guess, to assume that is always possible.


When did our 20s start to feel like our 40s?

the youthful assumption that your 40s have to feel this way. :laff:


You’d be surprised at how cautious people get with just a few thousand in the bank. This isn’t the time to safeguard — it’s the time to bet all your chips and hope to make it big.

I suppose this depends on personality, you'd be surprised I'd think at how cautious people get WITHOUT a few thousand in the bank, desperate for that paycheck. Does she have a conscious or subconscious belief that her parents ARE her safety net I wonder? Some (not all!) 20 somethings might. Maybe that is what is REALLY going on. Never to be admitted of course .... She may assume a lot of things like she will marry rich or that her career will always be stratospheric, but I really don't want to make those accusations, but the parental backstop is natural for some people to believe in (me meh I kind of didn't rely on my parents for anything at 5 years old (although yes they took care of me economically then), so never mind at 25 years old!)

See I could get with an argument that we should be less cautious and less comfortable, lessen the need for comfort. But with her it seems not an honest acceptance of risk but a lot of super super rosy projections about the ability to always make more and more boatloads of money whenever one wants to (what's this about? ivy league degree? work on wall street?). I mean maybe she is in a pretty lucky position financially, but for most people assuming nothing could go wrong would be a type of denial. While the super super cautious people protect themselves from the world by counting their stash like scrooge mcduck I guess :), she protects herself by pretending noting bad can ever happen financially.

[kib]

My motto: While it's beneficial to consider the ideas of others, never take advice verbatim from people who haven't actually seen the results yet. The younger they are and the longer the effects could continue, the more likely this gets.

[Chicken lady]

Lol! We had our kids in our early 20's. Dh was in grad school. We lived on half of my $6/hour job for a year before I got pregnant, then while I was pregnant. Then when dd1 was born, I quit - knowing we had "21 months" saved up and dh would be done in 6. 23 months later ds was born, dh was working on his phd, and I had a part time job where I could take the kids along. We had energy! We had enthusiasm! We had student health insurance and immunizations from the public health nurse. We had a community of people who thought kids were adorable and didn't have any. We had flexible schedules so that somebody could always get up with the baby and catch up on sleep later. And now, we're pushing 50, the kids are mostly out of the house and often a lot of help, and we have money and dh has paid vacation time.

Dd1's s.o. Was raised by parents who are 15+ years older than we were. Neither of them went to college, and they did not save any money during those extra 20 kid free years of minimum wage jobs. He complains that dd never wants to spend any money (she banks 30% of every paycheck) and that they should be having fun while they are young. He remembers his parents as always being old and tired.


Dd has a college degree and a professional job. He also has a college degree but is currently "under-employed.". She thinks $10 "young adult" tickets to the symphony and a $15 bottle of wine are plenty of fun and excellent returns on outlay. Gas and food for a weekend of hiking and camping in her brother's borrowed tent. The kind of things that they can't or might not be able to do at 50 or 60. Free art museums, public parks. He wanted her to put off getting a job and fly to Europe and travel around on a rail pass sleeping in hostels or on trains. She told him she didn't want to do that, she wanted to work now, save money, and see Europe from comfortable hotels and excellent restaurants on her paid vacation time later. Maybe visit some of the friends in other countries she had made through work. (dh has)

He talks about grad school. She told him " if you go to grad school, I get to have a baby." he said " are you insane?" she said "no, it's the perfect schedule."

I'm kind of going to enjoy watching this play out.

[freshstart]

Dd has a college degree and a professional job. He also has a college degree but is currently "under-employed.". She thinks $10 "young adult" tickets to the symphony and a $15 bottle of wine are plenty of fun and excellent returns on outlay. Gas and food for a weekend of hiking and camping in her brother's borrowed tent. The kind of things that they can't or might not be able to do at 50 or 60. Free art museums, public parks. He wanted her to put off getting a job and fly to Europe and travel around on a rail pass sleeping in hostels or on trains. She told him she didn't want to do that, she wanted to work now, save money, and see Europe from comfortable hotels and excellent restaurants on her paid vacation time later. Maybe visit some of the friends in other countries she had made through work. (dh has)

.

DD has a good head on her shoulders, well done, mama!

[ApatheticNoMore]

The girl in the article's lifestyle is fine. If she likes nightclubs or likes cultural events so be it. I'm assuming she lives in NYC, and so the going out to eat a lot to socialize is much the lifestyle there, to a degree it isn't really *ANYWHERE* else in the entire country. Free culture attractions? LOL. I don't think most cultural attractions are free and in fact the costs of doing many leisure activates (like even seeing a ball game which used to be something joe blow could take his kid to) have pushed through the stratosphere far beyond a middle class income (though my preference is nature so much of that is free). I don't think she needs to settle down if she doesn't want to. Just even if she can't throw 10% in the 401k, 5% in a 401k may not be "enough", but it's something and will hardly be missed given the tax savings of deferred tax plans. IF her income is too low it might not allow it but isn't there some kind of happy medium? Oh a happy medium may be neither "enough" savings (according to Fidelity :)) or going out every night, but it would allow some of both. And what about a rainy day? How thoughtful is she about spending and about risk taking (risk taking is fine but better if it's honestly acknowledged as such - quitting a job or going for a lower paid career or going free lance etc. - being out of the workforce a long time to raise kids is also risky of course).


and see Europe from comfortable hotels and excellent restaurants on her paid vacation time later.

all two weeks a year of it .... for many of us, of course you can accumulate it over several years - 4 weeks if you save it up 2 years. 2 weeks is not even worth going to Europe for IMO.

I'd go to grad school and make hubby have the baby. Oh wait .... too bad it doesn't work that way.

[Chicken lady]

She has an excellent professional job - when she hits her 1 year in december, she'll have a week of paid vacation. Career possibility of 5.

We sent her to Austria with family friends when she was 12 and she fit plenty into 16 days. The key is not trying to "do Europe" on one trip.

[lessisbest]

My motto: While it's beneficial to consider the ideas of others, never take advice verbatim from people who haven't actually seen the results yet. The younger they are and the longer the effects could continue, the more likely this gets.

Kib - Your motto just made my "Book of Odd Knowledge". :thankyou:

[Teacher Terry]

WE have been to Europe 4x's for 2 weeks at a time & it was definitely worth going for. After 2 weeks I miss home, my doggies, etc so run out of steam to travel. We pick one area of 1 country & see it in-depth. I agree that if you are trying to see 6 countries in 2 weeks that would be crazy.

[jp1]

I didn't consciously make a decision to live like her when I was in my 20's but in hindsight I largely did. Being a young single gay man in NYC was a LOT of fun. Traveling all over and staying in hostels, meeting people and seeing new places and doing different things was a lot of fun. I don't regret it for a moment. And I expected life to continue in that upward, fun, trajectory forever. It didn't. The dot com crash happened and I had to stop spending money, start a new career at the bottom of the ladder, etc. And after 9/11 I became much more aware of the bigger world around me. So my life started going in a new direction. More "serious". More focused on saving and worrying about the future. SO came along about that time and I decided that he was good enough to settle down with. Since then I still do things I enjoy, but I'm not out in clubs at 3am on work nights and I save a good chunk of my income for the future. I'm still happy with life, but I am definitely not carefree anymore.

[iris lilies]

This article:

http://stephaniesynclair.com/8-investments-that-changed-me-as-a-woman/

was discussed on another website, and the author continues to fascinate me in figuring out what, exactly, she does to earn the $1 million she rakes in each year, or claims to rake in. Buying expensive handbags and flying first class is, apparently, how one achieves the lifestyle one wishes. Spend the money to live as though you have the money and then you will have the money. It's a "Law of Attraction" philosophy.

I've now listened to several of her podcasts and in one of them she claims to bring in $1 million, and her "team" of employees numbers ten. I will say in her favor that Stephie urges everyone to travel a lot and to work minimal hours in the day. hmmm. I think I'll sign up for one of her packages, they come in various price ranges--$1500 to $10,000--but as I learned from her most recent podcast, no one gets private one-on-one meetings with her, she is that special.

So isn't that just what these 20 year olds are doing? They are living As If.

[Chicken lady]

People who live "as if", go broke, and file or bankruptcy don't make money talking about it. It's like the lottery - somebody's going to win. Odds are it won't be you. (definitely won't be me because I spent my dollar on broccoli. But the broccoli is a sure thing.)

[ApatheticNoMore]

I didn't save in my 20s either, I distrusted credit cards and carefully stewarded rather than blew through, a small amount of money I inherited, that's all. Sometimes society actually IS changing so fast that older people aren't able to give advice to younger people (but that 20 something takes it too far). How could my parents generation with their pensions have known and advised me about things like 401ks or even known to tell me to invest in them even if I would have listened? Of course not. They never even thought for one minute about such things to advise me. They had pensions and savings in a bank and assumed the interest would take care of them, it seemed like a good idea at the time ....

The person with all the things worth "investing" in. I will grant her lingerie just because I have heard how painful it can be to be busty (back pain), so I won't judge what might help a problem I've never had. And I will grant quality clothing, professional appearance actually is of some importance in the workplace and business world, even if the hippy in one thinks it really shouldn't be. Massages are nice but only if they can be fit in the budget.

[bekkilyn]

I really had no idea what a 401K was until I was in my 30's. I'd heard of it in my 20's but no one was ever able to tell me why it was useful because they didn't really know what it was either and didn't consider it very important. Fortunately, I've always been good about keeping some money in the bank for emergencies, so I've never been awful with money, but still. If only I knew then what I know now.

[freshstart]

If only I knew then what I know now.

that's what I want my kids to learn from, stupid assumptions I made. I want so bad for them to do it "right" that I know when the time comes, I can offer advice once and really then only when asked. I will have to sit on my hands, lol. DS has a low paying job in a nursing home because he chose to take a year off between high school and college. Amazingly, he has a 403B and is putting money in it! I want so badly to look at his choices and try to help him choose wise investments but nope, he insists he can do it (with no books, internet info, no knowledge of what a mutual fund even is) and that has to be fine and it's money saved at 18 at a temporary job so that he is saving is good enough

[Alan]

I was in my mid 20's before there was such a thing as a 401K. Not that it would have done me any good as I didn't begin considering savings until several years later.

[mschrisgo2]

Well, a slightly different perspective... I had savings in my 20's; that was a lot of years ago. I was going to college AND working full time. I made $100. a week, with twice yearly bonuses. (That was twice the amount of minimum wage, $1.35) Pretty good money for a young woman in those days.
And I was enjoying life, too. Pizza and beer on Friday nights, one day a week day-tripping around California, 2 weeks a year pure vacation- that didn't cost much, but was wonderful.

I saved $2500. to buy my first car, then paid for a year's car insurance, which was really high because I didn't get my license until I left home at not quite 20. I rebuilt my savings to $8000.

Then I got married. Big mistake. I was naive enough to think my then husband and I would share beliefs and ideas about money, but we did not. Initially, when he came home from Viet Nam, he said we were "celebrating" then we were planning for our wedding, etc. always an excuse to spend. But as time went on, he wanted to continue to spend every penny, and had no problems "borrowing" from his mom every week, which I found humiliating.

Unfortunately, I had no idea that I could have kept my money separate. After I graduated, I went on to a much better salary. He had a decent salary, too, and it was frustrating to see it slip away. I had never spent money casually, but he did routinely: cigarettes, candy, soda, magazines, a hamburger, often as much as $10 a day- and again, that was a lot in those days.

Finally, I said if we were going to spend all our money, some of it had to be on a house payment, instead of just rent, so I emptied my savings for the 20% down on the first house. That was the last time I had "savings" for 20 years.

By the time we got divorced 3 years later, we had a baby. And, no big surprise, the guy who spent all his money couldn't get around to paying his child support. He still owes me $16,000.

So I guess the moral of the story is that if you're combining money with someone, be sure that you have agreements first. And, it's not that hard to live well and save when you're young, but you have to have a goal.

[freshstart]

Well, a slightly different perspective... I had savings in my 20's; that was a lot of years ago. I was going to college AND working full time. I made $100. a week, with twice yearly bonuses. (That was twice the amount of minimum wage, $1.35) Pretty good money for a young woman in those days.
And I was enjoying life, too. Pizza and beer on Friday nights, one day a week day-tripping around California, 2 weeks a year pure vacation- that didn't cost much, but was wonderful.

I saved $2500. to buy my first car, then paid for a year's car insurance, which was really high because I didn't get my license until I left home at not quite 20. I rebuilt my savings to $8000.

Then I got married. Big mistake. I was naive enough to think my then husband and I would share beliefs and ideas about money, but we did not.
By the time we got divorced 3 years later, we had a baby. And, no big surprise, the guy who spent all his money couldn't get around to paying his child support. He still owes me $16,000.

So I guess the moral of the story is that if you're combining money with someone, be sure that you have agreements first. And, it's not that hard to live well and save when you're young, but you have to have a goal.

wow, you did fantastic when you were on your own, ahead of your time. 8k!

It's so sad that women didn't have resources like we do now to know how to keep money separate or how to get out of a marriage like that without so much damage. Will he continue to be monitored about paying the 16k back? Or does he age out at some point and you get nothing? I hope they garnish his SS.

[jp1]

that's what I want my kids to learn from, stupid assumptions I made. I want so bad for them to do it "right" that I know when the time comes, I can offer advice once and really then only when asked. I will have to sit on my hands, lol. DS has a low paying job in a nursing home because he chose to take a year off between high school and college. Amazingly, he has a 403B and is putting money in it! I want so badly to look at his choices and try to help him choose wise investments but nope, he insists he can do it (with no books, internet info, no knowledge of what a mutual fund even is) and that has to be fine and it's money saved at 18 at a temporary job so that he is saving is good enough

At least your DS is saving. That's awesome. Especially if he gets some sort of match from his employer. That's one thing I did do in my 20's. I never got into credit card debt beyond a month or two once in a while and I always put at least as much into my 401k as the employer match. I couldn't really fathom getting old enough to ever use that money, but it just seemed like such a logical thing to do, taking advantage of the match. That money, now about $50k, is now sitting in a rollover IRA and will hopefully keep growing until I'm ready to retire in the next 14 years or so. I doubt I had more than $10k deducted from those paychecks...

[freshstart]

At least your DS is saving.

That money, now about $50k, is now sitting in a rollover IRA and will hopefully keep growing until I'm ready to retire in the next 14 years or so. I doubt I had more than $10k deducted from those paychecks...

I'm glad, too, because that is not the direction he went after working last summer

Good for you, it's funny how you can do something small, kind of wonder why you are bothering and you end up with 50k!

[JaneV2.0]

If I hadn't saved money in my twenties, I wouldn't have been able to buy my first place, or pay off a car in six months. That's one good habit I've maintained over the years. But I wasted a lot of money too.

[LDAHL]

For each of the four years I was stationed in L.A., I put $2K in a mutual fund account that I never gave much thought to (In those days, I was very good at not giving thought to things.). For the next thirty-odd years, I continued not thinking. Today, it's worth just about enough net of capital gains taxes plus available credits to send my kid to an in-state university for four years.

I am not bragging. I did many imbecilic things in my twenties. I delayed starting my "real" career by seven years or so to serve in the military because I wanted to thumb my nose at both Soviet Communism and the prevailing cultural norms at the time. I gambled in both the Las Vegas and Wall Street arenas, assuming I was quite a bit smarter than I now know myself to be. But at least in one case a potent combination of laziness, thoughtlessness, compounding and a long bull market outweighed youthful stupidity.

[rodeosweetheart]

I think you could find many folks in their 50's who would be happy to blog about why they should have saved money in their20's, but it's depressing, both to read and write.
My guess is she will be sidling up to her parents and asking or money in the next 5 years.