I was reading this article on the "Millenials" generation of people and having not reading it, I came to the conclusion that people my age (that is 18 – 31 year olds) are not forward thinking and are financially illiterate; because yes – it’s easy for me to judge.
Firstly, multiple factors were key to these rises in ‘stay-at-homes’ like employment, college/university enrolment and declining marriage is a factor.
But I note that people who work that are my age (and all my commentary is purely observational), work to live a life of luxury. I mean people I ask oh I’m out of money, yet they drink alcohol, eat out, and are probably carrying a Galaxy III or an iPhone. (I’ll get back to this later).
Similarly, uni enrolment I think is a good excuse – but why live at home? Well it’s creature comforts, and the cost. But I also think there’s an element of laziness – I mean food that’s cooked, sometimes the cleaning done fore you; bam. This actually opens up one of my fears later down the track about people losing good food skills – and this obesity epidemic in the US and here in Australia.
In fact, that takes me to the point of going to a gym. People go to the gym (which costs a ton) primarily to be fit, but I find it’s largely a weight management thing. Even myself. We could all eat less, ride a bike to work and reduce carbon emission – our lifestyles are inherently wasteful.
Similarly, I think because of college culture, people will be on meal plans for the rest of their life, living communally (although this could be a good thing).
Declining marriage is an interesting point. Social norms I found interesting, because in the US I know of at least three good friends from exchange that are engaged or married! (Congrats to them – hope they moved outta house!) Heck, I probably would have popped the question – if it were legal (that’s another issue).
But I came down to what prevents somebody putting down a $20K deposit down for a house loan (although that’s really not enough, but a fair chunk!).
It was the Internet.
We live in a technological ecosystem which costs us money, that wasn’t needed fifty years ago. Every year, the cost increases (because the capabilities also increase). I mean, the true cost of technology actually decreases I’m pretty sure running on the technological power of a decade ago would leave you in the stone age.
But wait, there’s more! Let’s take a hypothetical look over a ten-year period.
Did you spend less than this?
I think I was fairly conservative. I know so many people spending more than what I’ve proposed. It assumes you buy your phone outright, however the numbers actually work out fairly well averaged out.
Now if you saved the same amount as the years went on, you’d be able to probably achieve an extra 3.50% growth (loose average on the cash rate in Australia during the time.
It’s a lot of money.
Solution? Well firstly, it’s good fiscal management. Save! Save! Save!
Now I’m guilty of this as well, but you might be worse.
People think, oh “$2” burger at Macca’s is nothing, or a $3 coffee won’t hurt the bottom line. But this thinking is exactly the problem. Say you do it once a week, that’s easily two hundred dollars over a year you could be saving, and over the ten years – a lot!
So think forward.
That is all.