Saving used to be a universal concept. Before they could even count properly parents would introduce their children to the piggybank where they would dutifully deposit spare pennies in hope that one day they’d have inconceivable amounts of money like $50 or even $100!
Usually, before that could be accomplished the moneybox would be smashed open (or just unscrewed) and the contents blown on sweets or a comic. But the lesson was learned – save money and you would reap the benefits.
These kids would go on to save for a bicycle, get a part-time job, leave school and get a full-time job and save for a car. Next-in-line was a house and its important contents, with help of ‘bottom-drawing.’
They didn’t think big and they certainly didn’t entertain getting into huge amounts of debt outside of a mortgage.
Poorer than their Parents
While some of today’s younger generation might still experience the game of pocket money and piggybanks (though this is probably done via an app, making money seem less real and less important), the fact is they’re not saving like previous generations and modern life may be to blame.
For numerous reasons, young people are making less, spending more, and not investing in the traditional home and family lifestyle, which is harder to attain anyway.
Firstly, is the grim reality that economic factors, mostly outside of their control, have made them the first generation that is on average poorer than their parents. They earn less comparatively, it is harder to get a job (and fewer jobs are available), money doesn’t go as far due to inflation, and house prices, in particular, are comparatively much higher.
Prior generations would save because the important things they wanted were attainable. Today’s generation doesn’t save because even if they did, they still wouldn’t have enough for that house. Instead, they go for immediate pleasures, living in the now and not thinking too far into the future. The weekend party culture is a prime example of that.
A Different World
Alongside this, the wants and needs of today’s generation are at times much bigger than previous generations. Everyone wants to travel, everyone wants a decent car by their mid-20s, and fashion and looking good is exacerbated by their narcissist addiction to social media.
But as much as people want to moan about millennials and their younger counterparts wasting money on iPads and Smartphones, the fact is modern life and the workplace functions through this technology. They are expensive necessities.
This is all without mentioning the spiraling cost of student loans to fund university education, which academically minded youngsters are sold as the only way to get a job worth having.
This is true to an extent. Baby Boomers and their parents could lose their job in the morning and find another by the end of the day. Even in a basic unskilled position, they could save enough for a mortgage in a couple of years. That simply isn’t the case now without a professional or at least a skilled job, which requires expensively funded and specific qualifications to obtain.
Easy access to credit and loans further compounds the no-save mentality. We get everything now and think about the consequences later. At the few clicks of a mouse or taps of a screen, you can have a personal loan in your bank account and the car of your dreams in (your parents) driveway.
The average credit card debt of those between 24 and 35 alone, is over $7,300. Student loans add over $30,000 more. Technically you aren’t saving if you’re in debt and most people now are.
Furthermore, because you can still easily get emergency loans online while having existing debt and even bad credit, the point of no return is much further down the line. In many ways we now do saving in reverse, making banks and lenders rich in the process.
Ultimately, modern life is just not conducive to saving. Boomers may have a negative view of millennial lifestyles, but let’s not forget, it was them who created the world millennials now live in. Only time will tell if this will have a significant impact on wellbeing, or if it’s just the new way of doing things.