Interesting article on the Atlantic's website.
Has Being a Young Adult Always Been a Financial Nightmare?
Scary charts! The one below kind of made me glad I'm getting old! I shudder to think what the addition of a 2000-2010 date range would look like.
"Young people have never had it easy, but they (probably) have had it better. By the turn of the century, 20- and 30-somethings were much far likely to experience a stint in poverty than they had been in the 1970s. Rank's newest research implies it's become even more common today.It is hard to compare. I was in my 20s in the 1990s, and in my first few years of work, my net worth was negative by several thousand dollars due to student loan debt, and my earnings went from $5.75 an hour, to $19,000 a year, to $30,000 a year, to somewhere around $50,000 by the end of the decade. I was lucky enough to be able to live with my parents for a couple of years, and of course their help left me with a much lower debt burden than I might otherwise have had if I'd had to pay for all of my education myself. When I look back at that time, I remember feeling the stress in those early years when I had my first apartment and struggled to pay all my bills while doing at least a little bit of the fun stuff a young adult wants to do.
That said, I think we should be cautious about simple comparisons across time. The truth is, poverty in 2000 was not quite like poverty in 1973. Consumer goods that make life more bearable (think air conditions and decent televisions) have become cheaper and more commonplace over time. We have cell phones and Internet. And some changes in the safety net, though certainly not all of them, have made life near or right above the poverty line a bit less harsh. You don't necessarily have agree that the poor are far better off today than at the start of the Reagan era, as some conservatives will argue. But their standard of living has improved in ways that make it hard to say definitively whether Gen Xers or boomers really had a rougher time when they were young.... "
My career advanced quickly enough to help me get past that stressful time fairly quickly, but the other thing that made the biggest difference was that I didn't procrastinate about saving. I was always aware that I needed to start saving money, and from my first job, I started contributing to a 401k. It might have only been 5% or 10% or 15% of my income at first, but pretty early on, I pushed that contribution as high as I could, knowing that it would be less painful if I learned to live without that money from the get-go. And somehow, as I saw that retirement account balance growing, it made me feel more inspired to save money. For some people, having savings might make them feel like it's ok to spend all the other money they've got coming in. But for me, I saw that having money makes more money, so I kept thinking about ways to cut expenses and debt. I paid off my student loans, and had become a homeowner rather than a renter by my late 20s. Seeing myself succeed in saving money made me feel great-- and when you know you're doing well at something, you want to do it more. It's a snowball effect.
For so many people, it's just the opposite. They start out with debt. They can't get ahead and fall deeper into debt. They live paycheck to paycheck, unable to invest in things that will pay off long term. Thinking about the situation is too depressing, so they put it off til another day. All that lost time is lost interest, lost investment gains, lost appreciation of a home's value. By the time they're 30 or 40, they may be making more money, but without the foundations laid in those early years, they're still in debt, maybe-- or even if they start to get ahead, they realize they'll never save enough money by the age at which they'd want to retire.
And of course none of this takes into account the curveballs life throws at you-- illness, injury, accidents, loss of a job, dependents to care for. I am so lucky to have had none of these to deal with yet, knock on wood. I am always so conscious that my life could easily have gone in a different direction...