Millenials' Finances - (Grumpy Old Man Takes)

[Route246]

I’ve been reflecting on how our generation approached financial independence compared with what I see among younger adults today, and I’d be interested in hearing how others here experienced it.

Speaking for myself, the path to FI was pretty traditional: I kept non‑mortgage debt to a minimum, avoided carrying credit card balances, took relatively few overseas vacations, and treated help from my parents as a true last resort rather than a regular part of my budget. My parents’ generation had modest lifestyle expectations, and that rubbed off on me; spending was something to justify, not assume.

What I observe now in younger colleagues and relatives looks very different. There’s more willingness to lean on credit cards, travel frequently, and draw on parental support for day‑to‑day lifestyle, followed by a lot of frustration around student loans, housing, and general financial stress. Of course, they’re operating in a tougher environment in some respects—higher housing costs relative to income, substantial student debt, and different social norms around experiences and travel—but the comfort with ongoing financial help from parents seems like a notable cultural shift from how many of us were raised.

For those of you here who are FI baby boomers, how much of your success do you attribute to disciplined saving and debt avoidance, and how much to the era we came of age in—things like tuition levels, housing affordability, job stability, and the financial habits we learned at home? Did you, like me, rarely if ever ask your parents for money once you were launched, or was family support a bigger part of your story?

I’m not looking to simply bash younger generations, but rather to compare notes on how our attitudes toward independence, debt, and parental help shaped our retirement outcomes, and whether we think those attitudes still make sense in today’s environment.

 

[Rocky mtn high]

Totally agree, first job paid $700 month, rent was $300, buying cheese was a treat. Today I see all the Starbucks purchases and overseas trips. Obviously no vacation for me. Then when married, lived together in studio apartment and rented a foldout couch for a bed. Just doesn’t compare to what I see now!

 

[pb4uski]

Our FI was a similiar path... principally living below our means, no credit card debt and regular savings for the future. DD and DSIL both work, spend some but also save and have done well. DS is a low wage earner but also LBYM, sometimes to an extreme and has some mid-5-figure savings so bettter than many. No one in our orbit live from paycheck-to-paycheck.

 

[COcheesehead]

I sold my company to 3 people. One was 10 years younger than me. The other two were 30 years younger. Not everyone can steer the ship. Some have to handle the oars. It was likely the same in our generation too. Not everyone can retire early. Some of my high school buds may not retire at all.

 

[Texas Proud]

I will put almost all on my attitude about money... and savings and investing...

There are many baby boomers that do not have any retirement savings so it does not have anything to do with our cohort...

 

[Aerides]

I think there are people who have issues with saving and investing in every generation, and it's very easy to "why these kids today" about those younger. Everyone always has and always will, but these topics almost always end up with judgments based on generalizations that rarely hold much truth.

The world is different for them, like it was for GenX and GenZ and every one before and after.

 

[statsman]

I borrowed the security deposit for my apartment lease from my grandparents upon graduating from college. I had a job that started two weeks after graduation.

A month later during a visit with family, I handed them a check to pay off that debt. They looked stunned and asked if I needed more time. I said "no". I never borrowed from them or anyone else ever again.

 

[jazz4cash]

In my family, other than room and board parental help ended when you graduated HS. I learned by watching to be financially responsible and got onto a great job right out of college. I was super fortunate to have selected engineering as a major.

 

[Route246]

I think there are people who have issues with saving and investing in every generation, and it's very easy to "why these kids today" about those younger. Everyone always has and always will, but these topics almost always end up with judgments based on generalizations that rarely hold much truth.

The world is different for them, like it was for GenX and GenZ and every one before and after.

I made it clear my curiosity was for those of us baby boomers who are FI. Many baby boomers are not FI and they are not the target of my inquiry. Intuitively, I feel like us baby boomers who are FI have certain characteristics, behaviors and beliefs that are consistent through any generation. There are many of our children's generation that are like us, and I feel there is a likelihood that they are more prone to becoming FI than their friends who live a more lavish, entitled lifestyle.

 

[Route246]

Totally agree, first job paid $700 month, rent was $300, buying cheese was a treat. Today I see all the Starbucks purchases and overseas trips. Obviously no vacation for me. Then when married, lived together in studio apartment and rented a foldout couch for a bed. Just doesn’t compare to what I see now!

I still remember when Kraft Macaroni and Cheese would go on sale for US$0.39/box at the local store and how I would stock up. There was this lunch meat called Carl Buddig that would also go on sale for very cheap and I would also stock up on that and add it to the Kraft Mac and Cheese. I look fondly on these times when I was first starting out and I never felt deprived but I did not splurge on much in those days. For me, a splurge might be to take a date up to SF for a nice meal. My real life was much different than eating at that fancy restaurant but I would have never thought about financing a vacation on credit card debt, or worse yet, asking my parents for money to improve my lifestyle. I think it i was my mother who drilled it into us to be independent, to live smart and below our means and we were always welcome to come back home to my parents if we couldn't make it. That motivated me to never, ever have to go to my mother and ask for anything, except for perhaps some of her cooked meals which I could not replicate.

 

[tulak]

The kids are alright.

 

[GrayHare]

There's a higher standard of living now than 50 years ago, which is A Good Thing. Something I suspect that hasn't changed is that only a small percentage young workers are savers. That was true 50 years ago, too.

 

[Koolau]

My experience is similar to Route246. I did get some help from my parents in that I lived at home during my years at university - though I covered my school expenses.

I do think expectations are much higher now than they were when I was in my early 20s. Young people today are "upset" that they can't buy a house yet and/or have the latest car or phone, etc. Those were expectations that were simply not an issue when I was young. Housing was a cheap apartment (if possible) and a car was (thankfully, in my case) a hand me down from my parents. Phone? Heh, heh, we had a 4 party line! I could go on.

 

[RetiredHappy]

My father instilled in us to save and LBYM. I saved and while I was careful with money, I was not frugal. It helped that I was always paid well which helped built up my savings and retirement account. On looking back I don't think I had a firm target as to when I would retire because I had always enjoyed working. I had thought that I would be retired by 62. I retired at 53 unexpectedly (sold business within 2 months of when we decided that we were "done") and it turned out that it worked out financially.

 

[jollystomper]

...

For those of you here who are FI baby boomers, how much of your success do you attribute to disciplined saving and debt avoidance, and how much to the era we came of age in—things like tuition levels, housing affordability, job stability, and the financial habits we learned at home? Did you, like me, rarely if ever ask your parents for money once you were launched, or was family support a bigger part of your story?

Comparing my out of college startup in the late 70s with what they would be today, applying inflation:

- First job (math/computer science degree, going into the then "Data Processing" industry): $16.5K (today: $76.5K). I was happy to get a job, especially since I locked it up before my senior year. At that time the unemployment rate was close to 10%.

-First apartment monthly rent: (MCOL area at the time, about 700 square feet, 1 bedroom, 1 bath, living room, kitchen, dining area, and separate walk-in closet): $325 (today: $1.5K)

- First car (used Pinto, aka "The Bomb Mobile", 25k miles): $3K (today: $14K)
Student Loans: $4k, $35/month monthly payment (today: $18.5K, $154)

For those items I think I had it better off than most young people today, as things like tuition costs and related student loans have far outpaced inflation. My salary was probably average at the time, and it has stayed flat. The same size apartment in the same area today starts are $2.3K/month. You be hard-pressed to find a used car with 25K miles for $14K (though one might come close).

I did not ask my parents for help. They certainly supported us as best as possible before college. With 7 kids and barely "middle class" they definitely taught us LBYM, and squeezing value out of many things. They knew nothing about investing but started training us on saving at a young age, starting with "Christmas Clubs". My siblings and I grew up feeling that we were not truly adults until we could pay for everything ourselves. For example, I felt very proud telling my parents they did not have to pay anything towards my senior college year tuition, I made enough to cover what their contribution was going to be. I never needed money from them after that.

Seeing that my parents did not have much, I did not expect them to support me much (if at all). Heck, my starting salary above was almost what my father was making at the time. But if one sees parents are being well off, then maybe the temptation to expect some type of support from them is greater. I know that was the case with at least one of our children (who fortunately has since grown out of that).

I believe, for every generation, if one sees their parents as being well off, one *might* be more likely to expect some level of "launch" support. But I also have seen friends who grew up in wealthy families live very frugally with no intent (and even pushing back on) parental financial assistance, and others who grew up in in poorer families who still expect their parents to cover the "gap" for them to live the lifestyle they desire. So personality and peer influence ("show me your friends and I'll show you your future") also come into play.

 

[audreyh1]

I had many contemporaries using credit cards, racking up debt buying houses and cars. So did my parents even though they themselves were very careful with money.

 

[Route246]

<snip>
My siblings and I grew up feeling that we were not truly adults until we could pay for everything ourselves. For example, I felt very proud telling my parents they did not have to pay anything towards my senior college year tuition, I made enough to cover what their contribution was going to be. I never needed money from them after that.
<snip>

I was raised with this sentiment. It wasn't spoken and it was not even hinted at. For those who are entitled I feel like they never get this feeling and as far as they are concerned they become adults when they reach 18 or 21 but are still entitled to handouts.

 

[jim584672]

These youngsters spend like drunken sailors and think they are retiring early. Attitude is what will kill their plans. I'm thinking they have a hand up from parents.

 

[joesxm3]

I suppose I am a combination of both situations.

I got a full scholarship to a state school (about $12,000/yr), but I could barely get a job after graduating in 1978 and was paid minimum wage $3.25/hr. I first went to auto mechanic school for a while and ran up about $6000 student loan and later went to computer programmer school and paid $6500 out of pocket.

In 1980, I got a programmer trainee job and was paid $13,000 which was about what I was then making in the auto parts department including overtime. The week I started that job I had to borrow the down payment for my Volkswagen Rabbit from the dealership where I used to work, but I paid it back from my first paycheck.

I shared various rented houses with four or five other guys until age 31 when I bought a house. By that time I had switched to contract programming after 4 years at the first company and was making an above average amount of money.

I still kept a pretty frugal life style and diverted all my extra to paying off the car and then to paying off the house in 7.5 years (although about half of that came from money I got as a share of the sale of a company I helped start).

After that about half of every paycheck went into "Hotel Fidelity" never to check out until I retired at 59.

 

[Flieger]

These youngsters spend like drunken sailors and think they are retiring early. Attitude is what will kill their plans. I'm thinking they have a hand up from parents.

I know some from my last job that stated their retirement plan is inheritance from their "Boomer" parents who screwed up the economy so they owe them.

I told my DD's that they should not plan that way as my plan is the last check I write on this earth will bounce!

Luckily, both of them have good financial sense and are doing well in their planning.

Flieger

 

[JoeWras]

There's no doubt about it: spending on exotic or even semi-exotic travel is completely different today than 30 to 50 years ago. I'm actually kind of jealous because brutal overseas travel would be a lot easier as a 20 something.

 

[frank05]

There are millions of people of retirement age with little or no retirement savings. I carried credit card debt when younger mainly because it was tax deductible. Did international travel on the cheap in my younger days. The younger generation is not much different then us retirees but the job market has changed since many jobs are temporary.

 

[aja8888]

At 82, and my GF at 79, we look at our grown kids ( 2 me, 4 her) and see visions of each other in some respects, struggling and finally making it on their own, but their (and our) paths took different routes to get there. Those who want to make it will find a way, and those that don't will limp along.

 

[Gumby]

My path through life has been unusual even among my own age cohort, so I hesitate to compare myself to young people today. I do suspect that in every generation there will be those who can pass the marshmallow test and those who cannot. We don't see many of the latter here.

 

[Aerides]

The younger generation is not much different then us retirees but the job market has changed since many jobs are temporary.

In 1990, I had my pick of entry level jobs at Fortune 500 cos paying $8 an hour, with no degree. That's $20 starting today. Almost all of those jobs have since been reduced/outsourced/offshored to where they barely exist today. I know, I worked on the tech that helped it along.

All of those jobs came with a promise of....work hard, move up, stay for decades if you like. You could and did start a job with a true living wage, get raises each year, and make it into a career with a good company - I did!

I just don't think it's the same anymore. Maybe for some it is better, some worse, but it's not the same, so to compare what worked for boomers to what should work for millenials isn't fair math.

PS, arent most of those millenials the kids of middle/late boomers?