Thrifty Twenty-Somethings

Yeah....I'm 25 and I'm watching my parents try and sell their house. Everyone in their cul-de-SAC is trying to sell at the same time so it's a complete shit show. Neighbors scheming and backstabbing to underbid each other. At least one family had to move because the husband was fired. And this is an upper middle class neighborhood.

My parents have 1/4 of their savings sunk into the house, so if they don't get a good price they may not be able to pay for their medical care as they get older.

Seriously, you're saying how terrible it is that my generation isn't dropping benjamins on bottles every weeknight? Where have you been?

I definitely agree with the article. Our generation is much more money conscious because I think money is so much more important than past generations... I am the total opposite of frugal and believe that having a great time requires money. Enjoy your golden years while you're young.

I don't start my BB FT till July. In the meantime I've taken out two no-interest-for-a-year credit cards, am going to Vegas and Europe, and been getting shit-faced 4+ days a week.

Lever up.

at least for me (23 y/o), i've just been raised that way (not overspending) coming from a blue collar background (and having student debt). Don't get me wrong, there are things that I'd really like to buy that are unnecessary (IWC watch, custom clothing), but then i come back down to earth and realize that i'm not really in a position to do that yet.

Don't get me wrong, i'm not cheap by any means, I just don't necessarily ball out or spend all my money (though I do go out to dinner with the gf quite a bit which really chips away at the wallet more than you'd think, esp in nyc)...

one could argue that the boom years are the reason why our generation must live a frugal living now. thanks mom and dad

so what the past generations fucked up this country by debt and we are pure evil because we dont want to make the same mistake?

Some of us value consumption later > consumption now.

Work hard. play hard. decrease SG&A, increase CapEx

Live fast die young.

We don't get warnings before we get laid off now.

MIdas,

Us and many other generations after us will be paying for the superfluous ways of the earlier generations. No doubt about it. The society has been changing starting in the later 80s. This is not to say your generation did anything wrong, it's just the way the cycle runs.

Are we missing out on life? Yes and no. We spend less when we go out and we are watchful of our pockets, but we probably enjoy going out less. We find other things to do.

This isn't true for everyone, but there might be a pretty strong trend here.

My mantra has always been have as much fun as the moment allows. This past weekend, I dropped over a grand in a night. However, I felt it was well worth it. Went out with two of my best friends and 6 models. While that may seem outrageous to some, I know I'll have money later so heavy consumption today doesn't bother me even if it puts me in a temporary squeeze when the cc bill comes at the end of the month.

i believe you can have a good time without spending a lot. I find the nights out when i get drunk off 20 quid are way better than when dropping 200 in a London club, but that is just my opinion.

I have also seen my parents build up a solid amount of wealth with absolutely no debt. Granted their income is associated with a higher level of consumption in America, but I dont see that as necessary.

Considering our generation might be marching off to WWIII we're just trying to save up a little for our orphans and widows.

Yeah, Illini this really pisses me off.

"Oh dear. Henrietta, I'm afraid the plebeians are not spending as much as necessary. Without debt driven consumer spending what will ever happen to the economy?"

"It's absolutely dreadful, Alfred! Why they must all be momma's boys and pantywaists. Or, oh perish the thought, they actually think they'll be able to save enough to be filthy rich like us!"

"Henrietta! That is so rich. Let us have a good chuckle!"

"Yes, Alfred, let's!"

chucklechuckleguffahchortlechucklechuckle*

The complete disconnect from reality of the poster as well as the article makes me feel stabby.

Eat the rich.

I cannot stand all these people that rip generation Y and young people in general. We are the products of the baby boomers terrible decision making! Do you think 20 somethings don't want to be out spending tons of dough at clubs and consuming everything like it's going out of style?! We (young people now) are the first generation that will have a lower standard of living than our parents. The baby boomers had it SOO easy and now they can sit back and call us slackers while we pay for their luxurious 30+ year retirements. Fuck them.

If you haven't noticed I very much resent the baby boomer generation.

I can't speak from the IB group as I havn;t broken into the industry just yet but I can speak from my personal experiences to now. I'm 22, just finished undergrad and can confess I wrapped up my final year like a rockstar. I'm not talking about the typical college kid who pre drinks there brains out prior to hitting the bar 3 nights a week. I'm talking about bottles and young golddiggers in training 5 nights a week. Your sentence about strictly living for the moment and thinking tomorow a light year away, I couldn;t agree with you more if you wrote this a year ago. But I think there comes a point in time when people grow out of their bar star stages and the way the world is today, we have every right to be frugal. Drinkings fun when your young n dumb but if alchohal was invented today i;m certain it would be illegal.

Different mindset, different culture, with long term goals in play. Thats how i'd like to think of my generation. All of the smart ones at least. If were fortunate enough to see better days, then bet the house that your waitress will have plenty of excellent customers and not just yourself

I think their is another angle that hasn't been considered yet. Our generation (I'm 21) has basically had everything handed to us our entire lives. When we wanted something, whether it be a toy or video game, most of the time, we got it. Now obviously there are anomalies to this, but the fact is, we are collectively the sons and daughters of the wealthiest generation in American history. I think that because money is never really an issue for us means we don't get a kick out of dropping tons of cash at a bar or club. The diminishing marginal utility of money has made it that we really aren't excited about spending a lot.

Note: I grew up in suburban middle-class NJ so my worldview might be a bit parochial

I actually recently ripped on my parents for letting their generation fuck everything up for us.

That said, how is this generation more frugal than others? Maybe people go out and utilize services less often, but that's because you can get the majority of those services at home now. Why should I go out and spend $200 at a bar when I can throw a house party for the same price, have some friends pitch, and have an awesome time? Don't get me wrong, I do both, but there's no point in going out every night of the week.

Also, let's take a look at housing situations. Even as small a period as 20 years ago many college grads were going back and living with their parents to save up some money while starting their first job. 30, 40, 50 years ago the majority of people lived at home post-college or when first starting a career. Nowadays we have our own places, which is a monstrous expense.

Are we more intelligent with our money? Yes and no, but as with everything else, spending habits change.

This hasnt been talked about in the article but Gen Y does a big chunk of their shopping online, before if you were to splurge on a Cart you would go to the dealership and buy it while today, you can go on ebay from your phone compare prices locally with online and make an informed decission.

I really think this opinion mentions the extremes; you either spend every penny you have, or you're cheaper than a Chinese entrepreneur.

There's got to be some sort of middle ground where you can make good money and enjoy the high-life, without coming home broke every night or maxing out every form of personal credit.

That's the hard part about deffering pleasure/fun in the short run for someting in the future (say a yacht).

Those ripping on their parents - i guess they didnt teach you well. Mine taught me to be frugal (i try to be, but hard) and to always always always have some liquid saved for a rainy day.

Also, each generation has been richer than the last. So i too hope to leave my kids with more than my parents are leaving me with.

After reading many writings from Henry David Thoreau, I've realized there really is no reason to spend money and buy into the social manipulation that is consumerism and consumption. The economic and social freedom that is obtained from not buying into social pressures to uphold appearances/please others/look "cool" is a liberating feeling.

I'm probably in the minority though. It seems there is a stigma attached to people that are frugal, cheap, economically efficient, etc and whatever else you want to a general apprehension towards wasteful spending. But why? It's irrationality at its finest engaging in conspicious consumption, no matter the level of income. It's not wrong or right, just irrational. I definitely think it's uplifting to see our generation slowly altering their fiscal views. After experiencing everything over the past 10 years, maybe it will finally sink in to the American culture that, contrary to what television and the government tells us, there is nothing wrong with not spending money instead of delayed gratification

David Brooks had a great article that is related to this discussion in the NYTimes called " The Modesty Manifesto"

Mr Cheese, everyone's perception of themselves in finance is related to material possessions. Otherwise, virtually all of us would do something meaningful with our lives. Possessions and money = scorecard of success. So, I'm just saying. If that's truly how you feel, quit and work at an orphanage. My take is that building a nice house when I'm 35 > spending $10,000 per year for a decade drinking myself under the table.

I had a pretty rhetorically neutral tone. Touche!

I just noticed the rainy day comment and thought of the what's going on in Japan right now. Things like that could happen anytime, anywhere.

I have seen many people who have spent huge and let me give some good advice: Drinking and going out really dont add up to much of an expense, especially relative to what a successful person in this business can make. Also, "toys" like cars and big, high-rent apartments are usually not where people get into trouble....those are 1-time, or at least short-term, expenses that end quickly. The can create some "what was i thinking?" type of regret, but I have never seen somebody really kill themselves with this type of spending. I have however, seen a few very successful people destroy their quality of life after a good run on wall st and it is always the same story...they get married and have a bunch of kids at a very young age, then for whatever reason their career takes a down-turn and their marriage blows-up (which cuts their wealth in half). The wife's settlement usually ends up being calibrated to the time when the guy was killing it and the kids cost like 100k/year in perpetuity. This scenario can take you from being very rich to being very middle-class (and feeling poor) very quickly.

So basically, drink all you want and buy whatever crap you think will make you happy, but do not ever get married or have kids at a young age unless you are really 100% sure....and absolutely make sure you have a pre-nup when you get married.

See, this is where I disagree with you, Bondarb, on the partying thing. See, I think certain levels of extraversion are good. But the type of person who is going out and drinking 3-6 nights a week is not doing some very important things--thinking and building his reputation. Sounds moronic for me to re-read that statement, but it's true. My now former co-worker (former because I am no longer with the company) is definitely smarter than me and was better at his job than me. I, however, have much greater upside. While this guy goes out and spends literally his annual bonus (which sucks, frankly, at our level in our business) on alcohol, partying and traveling with a bunch of his loser friends, I'm quietly working on my projects, making a ton of money, and I've been able to impress the hell out of a lot of people in my industry in my submarket (they think I'm a deliberate person, a very hard working person, and a person who has developed a reputation for loyalty and maturity, a reputation for showing up on time and for doing what I say I'm going to do).

Basically, I've cultivated a lot of respect within my industry while my co-worker is out boozing it up with unimportant people. The guy has few important contacts and is on the fast track to middle management (much faster than me or the average person), but a place where he will basically remain at permanently.

In sum, it's not just about the money. It's about the opportunity cost. Do you know the kind of time it consumes for one to constantly plan out when, where, and with whom one should drink, dance, party and travel? It's a total waste of talent. Talent I wish I had. But to him, he is living. I told him that we'll see how he feels when his metabolism finally catches up with his lifestyle and when he's making $150k/year at the age of 40 with no savings to show for it.

That's true. What do they say? It costs $1 million to raise a kid in America?

we are frugal as shit because of the ridiculous rise in tuition prices and student loan debt

Clubs in Los Angeles, New York, Vegas, &Miami these days have fixed portion of gratuities... basically 80 dollars per bottle of Belvedere, 150+ or so per bottle for a bottle of Dom or Cristal. And usually you can only let 4 - 5 people in with one bottle. And table minimum would be 2-3 bottles. So usually at those places, waitresses make good money. For the past few years, I partied 2-3 times a week at Hollywood. Now I am over it.

My parents were/are quite wealthy, both from an income and savings perspective, but also lived below their means and always taught me to do the same. Never financed cars (or any depreciating asset) or had consumer debt of any kind.

Even a person of relatively modest means can retire with a sizable nest egg if they exercise fiscal discipline in their working years. I would challenge bondarbs assumption about the causes of financial distress. While divorce and terrible investments may sink the affluent, I think for the average American it is exactly the little things that kill them. Too many trips to target, financing cars, too big of a house payment, etc.

Regardless of your income, live like no one else and later you can live like no one else.

At least among the people I know, we will have much more fun at a dive bar or unpretentious club than places packed with douchebags blowing their paychecks in a single unmemorable night at a club. I don't know how anyone beyond the obscenely rich can justify spending that much money on bottle service. It is delusional to think that not spending hundreds of dollars in single night at a single nightclub = not living life to the fullest. You can have an amazing night out for less than $20.

I've gotta say I've done both, while i was in college I was spending a lot, enjoying myself. But the amount of money you spend and how much fun you're having really aren't that correlated. I've probably had as much fun hanging out with the guys at the local bar/fishing as when I go to Vegas/Scores and blow $600 on a bottle. I'm much more frugal now more because I don't have time to spend that money, or don't see anything that I want in particular.

Basically I don't think you need to be blowing money to be having the time of your life. It's nice not to have to worry about it and go for a good steak or get a nice bottle of champagne now and then, but if you want to keep doing that you gotta work and plan for it.

Anyway, going out often and getting bottles every time got really old after awhile. Great experience and lots of fun, but really not necessary.

North American's are CHEAP.

Coming for Europe I noticed in university espacilly, I would go out with 80 dollars and have a blast of night in my books, measuring how fun a night was, was not correlated to how drunk I got. Which seems to be very important for North American, the more "shittered" you get the more fun you have.....false.

Biggest pet peeve - when some one says " Hey let go grab a drink" you get to the bar and they say I'll have one bud light and he will have one as well... how much is that each? WTF bro, don't invite me for a drink and then tell me to pay for it, at that point I just pay for both, really show's to me what kind of person they are, they nickel and dime everything.

OBVIOUSLY this judgment can't be made for all people living in North America, its just a majority of the people I have run into behave like this. I am sure there's a nice people that have good night life etiquette especially in NYC, Chicago, LA etc

Women on the other hand, like everywhere else in the world are just drink whore's.. that's when a young rookie starts to learn how to play there game. All of us went through this (I hope) when a female approaches, chat's you up, and in the first 5min you offer her a drink.... FAIL. She grabs her vodka cranberry and bounces. You probably got a fake name, maybe a number, and your out $10... its a learning process now you know better.

Anyways long story short..... don't nickel and dime... if your out with your friends, it will all work it self out at the end of the day,and for those d-bags who you buy a drink for and then disappears when it's there round, speaks volumes about the persons character and personality. Just an observation I've made over the years that hasn't proven me wrong...yet

Only average frustrated chumps pays for women's drinks at bars. The second you offer to buy a woman a drink, her chump sensors go off like crazy and she knows she can milk you for at least 2 cherry vodka sours. They know how to play the game, and play it well they do

^^^Casually ignoring hot chicks is the best. I have this attractive friend (fucked her a few times, but she's just a friend) who loves me. I don't shower her with compliments like most every other guy she meets, which drives her crazy.

I'm somewhat against having hard set rules, like never buy a girl a drink. If a girl knows you're loaded (by where you are, how you're dressed, etc) and you've been having good conversation with them for a while, buying them a drink is fine. On the other hand, going up to a girl and asking to get her a drink within 10 minutes is not ok.

I'm a proponent of natural game; all these rules and tricks are for amateurs...

All you people saying "I spend a ton now because I'll make a ton later" are idiots.

I know this from personal experience. First off, nothing is guaranteed and your desires might change. When I was in PE I would blow large sums on clubs and going out, living in a really nice condo, and having a nice car; but I quit that job to start my own business, and although I'm confident that this will pay off handsomely in the long-run, in the short-run money is tight. Looking back, I wish I had been a lot more frugal and will carry this lesson for the rest of my life. The truth is, you don't need to spend a lot money to have fun.

At the end of the day, you guys do what you want, but if there's one thing I've learned, it's wayyyyyyy better to have money work for you than you working for it.

I work in energy, and just like Enron/Duke bastards that destroyed for all of us young folk, being greedy to death. There is so many rules in this industry now and CFTC is coming with lots more.

Would say for any young person in finance to not be frugal right now is stupid simply due to "Frank-Dodd". The MBS/CDO/extra excess, not boom flipping excess we saw over the last 5-10 years is gone. The rules that may make this game way harder in the future one needs to see plus trade desks and banks have lowered bonuses in the last little while no? Year-over-Year bonuses are not growing at the same pace.

Add to it, taxes are going up. Main strreet wants politicians that bring higher taxes to young people making $$$. Heck you cant even offshore your shit anymore because those laws/paths (UBS) have been cracked down too.

I remember in 2007 when I went out with guys in structured sales who friends of friends, they were rockstars flippin superman, 2 years later many of them were not in the industry even. This game has gotten a whole lot harder these days.

You can't even put your savings into the stock-market or bonds these days and know you will get a good return for 1-2 years out. You have legendary investors fighting over what is a new standard for normal.

Would compare to the guys who used to smuggle coke through Miami and make big $$$ and no one cared. I bet the young drugdealer works 100x harder than those dudes to get the goods.

Spending money on booze is my biggest problem. When I'm out on the town, the last thing I'm thinking about is my personal finances. I wouldn't consider myself a big spender, but on a typical night in NYC I'll spend around $200. Titty bars and casinos is much worse, but they can be hard to say no to (casinos especially).

I'm 26 and yes that's absolutely true. My parents are upper-middle class, I have/had an Amex Gold since HS and was able to charge it as needed throughout HS and college for big bar tabs, no biggie. I continued this after college, bottle service, etc, and then it became almost tacky to continue to blow money fast. There was also the fear factor of seeing how quickly this meltdown wiped out a lot of peoples net worth, and how the majority of America was living beyond their means. I'm by no means wealthy but the meltdown has def changed my lifestyle. Before if I was going out on a Friday night I'd just buy a shirt after work on Fri, I wouldn't go to my closet. I was planning on buying a 3-series, but with gas prices going over $4 before I bought a Civic. We've def learned to become frugal unless your'e in your 20's making well into the 6-figures. But like everything, things come and go...it won't be long until Gen-Y is living the way they were living before. Just like the Baby Boomers learned how to be savers, we've seen the 2nd Great Depression, it's going to take a while to "shake it off."

Get housed before you go out (if possible).

A few words of advice from someone who knows better:

1) Make a budget and stick to it. 2) Save 20% of your income every year. 3) Find enjoyable activities that fit within your budget, and make sure to have a good time.

As long as you stay within a budget, you can go crazy at the bars. Or whatever. I just don't understand the need to pretend you are a 'baller'. Smart people save money. Don't let anyone tell you different. Trust me on this - life lasts a long time and I think a long term outlook is best.

OP you suck. $100 now is nothing compared to some decades ago. I cant buy shit wiht that today. You old mothafuckas making 1k+ a week for bartending 2h a night 30 years ago can go stick it up your ass. My dad was able to pay his monthly rent by being a weighter for 2 nights/month. + buying a car as a student no problem etc etc etc.

actually, i dont know why im replying to this idiot post. so im going to stop here. fuck you OP

Anyone how has had a family member or close friend pass away before the age of 50 I'm sure will speak different about this. You can't spend your whole life not doing things for monetary reasons, you might find out you have terminal cancer tomorrow and have a month left. Then what does all that money you saved to "live a comfortable life when I'm 35, build a house with a nice car" get you. Nothing, nada, zilch.