The Screwed Generation

[Birdjaguar]

I said this in another thread but I'm an engineer and do not have a 401K. My company has a 401K but no matching whatsoever. It's no different than a 401K I could get on the private market. This is the new normal even though it was unheard of even a decade ago.

And thanks to sky high rent and student loans, I cannot yet afford to open a 401K and begin serious retirement saving. That isn't to say that I don't save; I just can't save for retirement and an emergency fund at the same time. And I'm still paying down the $15k in credit card debt I had to take out just to survive college. That's almost payed off though so it'll be nice to have an extra $700/mo to put into savings.

But I'm one of the most fortunate of my generation. I'm white, male, educated, from a middle class (and upwardly mobile) family and had the luxury of graduating after the recession was over. I'm no longer struggling to make ends meat but I'm still in a precarious position and a lot of possibilities for my life are rapidly closing.

I point to my example and say that if someone of my background and privilege can't afford to save for retirement or have kids, our country's future is ****ed.

Edit: It is really nice to see older people taking responsibility for their generation's actions. It's just too bad there's not enough like you to actually take corrective action.

We shouldn't be financing trillion dollar war machines; we should be cancelling student loans, providing health care and housing for our people. We are an astoundingly rich country with equally astounding spending choices. They say budgets are moral documents and ours show just how morally bankrupt we are as a country.

I graduated from B school in 1984. Our youngest graduated from college in 2008. All those years were challenging and we saved as best we could. We paid for both our kids educations at private colleges. As FB said: "There is only willingness, or unwillingness, to pay". Its all about your expectations. If you expect to live like you make $250,000 on $70,000, you will be disappointed and frustrated. Short term debt is your biggest enemy. Be patient with yourself. Think about how to get pay raises and how to cut the big expenses. Getting married is an excellent way to improve one's financial situation. But it is not free money.

 

[hobbsyoyo]

Hun, who's saving for retirement? I'm going to work until I get the grabber. And I think I know it.

I too expect to work until I die or get the hell off this rock.

Back to the old system of extended families, have the kids look after and support the grand parents
Might as well start now, because I doubt social security or medicare is going to exist much longer

That would be a great idea but it won't work for me. I have no grandparents left that are involved in my life, the in-laws are terrible people and my immediate family live on the other side of the country. They also have two other kids and as soon as they start having their own kids, any help my parents could offer would be split up. And by help I mean money because they aren't going to move across the country to help raise my kids.

 

[Birdjaguar]

I know kids are expensive. That's the not the problem. The problem is that I can't pay $3K in rent, $1K in student loans, $.7K in credit card debt, maintain a comfortable lifestyle, save for retirement and have a kid. Tell me how you make that math work dude. I know my maths, my livelihood depends on it and I can assure you it doesn't add up.

We reduced our lifestyle during the 22 years we were raising and supporting our two kids.

 

[hobbsyoyo]

I graduated from B school in 1984. Our youngest graduated from college in 2008. All those years were challenging and we saved as best we could. We paid for both our kids educations at private colleges. As FB said: "There is only willingness, or unwillingness, to pay". Its all about your expectations. If you expect to live like you make $250,000 on $70,000, you will be disappointed and frustrated. Short term debt is your biggest enemy. Be patient with yourself. Think about how to get pay raises and how to cut the big expenses. Getting married is an excellent way to improve one's financial situation. But it is not free money.

I'm not talking about living a high roller lifestyle. I know I would have to make changes to have a kid. I'd have to move again and cut back on the luxuries. That's not the problem, that's manageable. The problem is that even after all that I'd be back to struggling. Childcare here costs over $15,000 a year. That's not counting all the other expenses a child incurs. The math simply doesn't work.

I will admit a heaping of selfishness. Right now, I'm financially independent for the first time in 30 years. I am comfortable and not struggling. The high school drop-out and college life were not kind to me and I don't want to give up a nice lifestyle yet. The bigger problem is that when I am ready, I'm still fairly certain the money won't be there.

The meta problem is that you cannot expect an entire generation to overcome the hurdles thrown at us and have kids, much less improve the standard of living for their own kids over what their own parents managed.

Also:
Marriage actually had a massive short term financial consequences for us. It disqualified us from all government assistance and of course we had to pay for the wedding out of pocket along with all of our moves to go to college, get jobs, etc.

 

[hobbsyoyo]

We reduced our lifestyle during the 22 years we were raising and supporting our two kids.

I get that. I'm arguing that even after reducing our lifestyle the math still doesn't work.

Do any of those numbers I posted for expenses seem reasonable to you? The only thing I could cut back on is rent and even then only so much - and it would incur the penalty of yet another move. We've moved 5 times in 7 years for work and to attend college.

 

[hobbsyoyo]

And to reiterate, I'm not trying to make this about myself although it certainly seems that way. I'm just trying to point out how bad our system is. That you can be born into privelidge and do everything right (well, except dropping out of HS but I rectified that) and still not be able to enjoy the full American dream. And I'm much better off than most of my generation! That should give everyone pause.

I do appreciate the advice and support.

 

[Birdjaguar]

I'm not talking about living a high roller lifestyle. I know I would have to make changes to have a kid. I'd have to move again and cut back on the luxuries. That's not the problem, that's manageable. The problem is that even after all that I'd be back to struggling. Childcare here costs over $15,000 a year. That's not counting all the other expenses a child incurs. The math simply doesn't work.

I will admit a heaping of selfishness. Right now, I'm financially independent for the first time in 30 years. I am comfortable and not struggling. The high school drop-out and college life were not kind to me and I don't want to give up a nice lifestyle yet. The bigger problem is that when I am ready, I'm still fairly certain the money won't be there.

The meta problem is that you cannot expect an entire generation to overcome the hurdles thrown at us and have kids, much less improve the standard of living for their own kids over what their own parents managed.

Also:
Marriage actually had a massive short term financial consequences for us. It disqualified us from all government assistance and of course we had to pay for the wedding out of pocket along with all of our moves to go to college, get jobs, etc.

I get that. I'm arguing that even after reducing our lifestyle the math still doesn't work.

Do any of those numbers I posted for expenses seem reasonable to you? The only thing I could cut back on is rent and even then only so much - and it would incur the penalty of yet another move. We've moved 5 times in 7 years for work and to attend college.

The housing is very high. How old is your wife? (no need to actually answer) Maybe kids can wait a while. Developing a way to increase your income over the next few years is the best path. Unless you are the highest paid engineer in the company, talk to your boss about how to do that.

There is always a meta problem as generations make their way forward. What you know now is that my path and my father's path to financial security probably will not work for you. Your generation is already forging new ways. Saving money in some fashion will need to be part of it. Just how to do that is still murky.

 

[hobbsyoyo]

The Japanese bomb Pearl Harbor, legions enlist. Terrorists take down the twin towers and we completely change our role on the world stage. Harvey dumps a small sea on Houston and the citizens mobilize and governments blitz the area with supplies.

We do fast and obvious crises very well. We take slow moving, non-obvious crises very poorly. This economic crisis is the kind of thing our specific style of government is terrible at dealing with.

It only took a day for the stock market to crash in 1929 but the conditions had been building for that for decades. The 2 year cycle for Representatives was meant to make them more responsive to the people but it has perversely lead to the need for endless fundraising for a never-ending election cycle. These Representatives are quite literally unable to meet with constituents when they have to spend every minute calling wealthy donors. That in turn leads to them being far more responsive to the donors themselves than to the actual people. Finally, things come full circle as the donors use their political influence to carve out a bigger chunk of the pie and ends up hurting everyone. The key thing is that it takes a long time for things to get bad enough for average joe to pick it up - and then he argues about what to do about it or if it really even is a problem.

We've known wages have been stagnant for decades. Everyone knew college prices were on a dramatic climb. Healthcare and housing costs have always been a problem for as long as most alive could remember. Individually, these things would not force a crisis. But taken together, after they have had time to increase in severity, you wind up with a disaster.

The student loan bubble is going to make 2009 seem like a time of plenty.

We need a come to Jesus moment to rethink how we run this country from the top down to better equip ourselves to handle the unknowable future.

Anyways, sorry things got so personal. We've been talking babies and I'm on a hair trigger with the subject.

 

[Virote_Considon]

It's okay - the Boomers are a dying breed now.

Time is cyclical; the damage will be undone.

 

[Farm Boy]

Pressure level that high already, eh Hobbs?

 

[Lexicus]

I don't have enough money to in good conscience acquire a cat, let alone a human child.

 

[hobbsyoyo]

It's okay - the Boomers are a dying breed now.

Time is cyclical; the damage will be undone.

I still have faith in this. My worry is how much needless damage will be inflicted before we get better. My next worry is that if we don't fix this fast enough, we'll overlap this crisis with the bigger potential crisis that AI poses and collapse.

Pressure level that high already, eh?

Not pressure. Just hyper-awareness of the issue.

 

[Farm Boy]

Back to the old system of extended families, have the kids look after and support the grand parents
Might as well start now, because I doubt social security or medicare is going to exist much longer

Did we ever really have the luxury to stop?

As in, not having those things, has it ever not been a misfortune? Not having that makes things harder, not easier. It's not always possible, and sometimes it's a blessing to be free of certain people, but it still certainly doesn't seem like that makes things run more smoothly, overall. It's a principle cost of local communities degrading, when they degrade. There are always going to be people without immediate family available. And they'll usually need some of the things that family tend to provide, at various points in their lives - churches, community groups, fraternal groups, etc.

 

[FriendlyFire]

I too expect to work until I die or get the hell off this rock.

That is like most Asian countries that dont have or very limited social security.
Iam slightly better off as I got help from the parents purchasing my own home which will be used as my retirement income.

Someone is going have to have to pay for those taxs cuts they pay for themselves, a Wall that mexico will pay for and Climate change that is a hoax by China
Thats our lot and the next generations lot.

 

[Yeekim]

Great article.
But whoever designed those awful, annoying graphics deserves to suffer three days of constipation.

 

[Cheetah]

And I'm still paying down the $15k in credit card debt I had to take out just to survive college. That's almost payed off though so it'll be nice to have an extra $700/mo to put into savings.

$15k in credit card debt!?

How is that even possible? Not why you'd need the money -- I managed to get in-state tuition in Minnesota and that still cost almost $6000 a semester!! -- but could you get credit cards with that amount of limits as a poor college student??

 

[hobbsyoyo]

$15k in credit card debt!?

How is that even possible? Not why you'd need the money -- I managed to get in-state tuition in Minnesota and that still cost almost $6000 a semester!! -- but could you get credit cards with that amount of limits as a poor college student??

Yes. They kept increasing the limits because I always paid on time.

 

[Lexicus]

I find myself going the opposite direction of the old proverb that there are no old progressives; that everyone gets more conservative as they age. I find myself inching closer and closer to outright communist views on a lot of things. I already call myself a socialist.

I've been arguing to some degree for a redefinition of socialism from the common understandings of it. The revolutionary transformation of society into something completely different is just not a good concept to tie socialism up with, for a variety of reasons. One because it's not reflective of how real history works, and two because if you're a socialist who wants to see more socialism, it's far better politically to tie socialism to things that people can readily understand and see in their own lives than to turn it into some abstract Promised Land that has never been seen before in history.

I still have faith in this. My worry is how much needless damage will be inflicted before we get better. My next worry is that if we don't fix this fast enough, we'll overlap this crisis with the bigger potential crisis that AI poses and collapse.

My big worry is climate change. Clearly destroying the political power of capitalists is a precondition to addressing climate change in any serious way but we're running out of time. We may have already run out.

 

[metalhead]

I graduated from B school in 1984.

What was your tuition? How different would your life have been if you graduated from B school having to pay $1,000 a month (or more!) in loans?

The barriers to starting a family with children are staggering these days. Many people have to choose at age 18 whether to accrue a massive pile of debt in the hopes of obtaining a reasonably good paying job, or forego the debt but limit their lifetime earning potential. Obviously, there are other ways, but if one ends up working and going to school at the same time, they're either living at home and delaying their social development, or still accruing debt while delaying any meaningful advancement to a place where they can realistically afford to start a family.

If you want this to change, don't lecture people on how they can make different life choices. Those choices don't exist. We need to drastically reduce the financial burden people face at the beginning of adulthood. We also need to drastically reduce the financial burdens people now in their 60s face too, because you know why? "Free" child care with a family member doesn't exist any more either, because grandma and grandpa and great Aunt and great Uncle also have to work until they die, because they stopped earning a pension 30 years ago and Social Security will barely pay enough to feed and medicate them if they stop.

 

[Lexicus]

If you want this to change, don't lecture people on how they can make different life choices.

Unless you're saying they should make the life choice of getting involved in a political movement to overturn all this