Ive noticed a trend that millenials/gen z are spending more of their money on travels/luxury items/dining than previous generations. I understand that housing is expensive and its not easy to get ahead now a days but this will have serious long term affects down the line. Social Security age will likely be pushed back and decreased as people live longer, combine that with inflation and lack of savings the country will have a massive borderline homeless population 50 years from now.

https://fortune.com/well/article/genz-millennials-doom-spending-stress/

Dicer said:

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Ive noticed a trend that millenials/gen z are spending more of their money on travels/luxury items/dining than previous generations. I understand that housing is expensive and its not easy to get ahead now a days but this will have serious long term affects down the line. Social Security age will likely be pushed back and decreased as people live longer, combine that with inflation and lack of savings the country will have a massive borderline homeless population 50 years from now.

https://fortune.com/well/article/genz-millennials-doom-spending-stress/

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Nothing wrong in traveling etc. Just do it on your own money, not someone else's. Borrowing money to enjoy fancy vacations is just stupid.

Why don't Americans have any savings? I am amazed with some who say they have a 6 figure job (let's say $100,000 a year) and still are in penury. Are these people that dumb? I made less than that at some point and still managed to save and invest and do grad school that I paid for myself.

The issue is they are traveling on credit.

With APR at 20%+ seems like an easy way to get into crippling debt if you dont have the means to pay it off

I think some of this is just a product of YOLO.

Maybe there is a sense of I'll never be able to afford X so I'll just spend it. Or I don't need to repay that loans so I'll just spend it. Maybe we just "see" more of it because of social media.

Edit... Like the previous poster mentioned, there's still a lot of crippling revolving and long term debt building. Dave Ramsey didn't just rise to prominence. Even members of generations previous got into debt above their eyeballs.

Well they think their student death will magically disappear so they can take that debt and plow it into debt for tings like "life experiences"

Maybe they will return to a culture of normal sized houses and/or multiple generations at the same location. Could be worse things.

Pendulum swinging back towards experiences vs material things in my view

I don't know that it's surprising that people raised in an instant gratification environment have a short term perspective on life.

Delayed gratification is a pretty difficult thing for the human animal to learn and subsequently put into practice.

We are a nation in decline.

If it was 1928, and you knew that you were going to lose your house in a mortgage anyways, why fight for it?

The calculus is different if you don't believe the US will recover. Time preference speeds way, way up.

I'm not saying they are right, but that is the psychological and emotional rational.

I think that if we get a little distance between us and COVID, attitudes might change.

Dicer said:

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The issue is they are traveling on credit.

With APR at 20%+ seems like an easy way to get into crippling debt if you dont have the means to pay it off

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Yes, but I am trying to understand the mindset. Do they know that they have to pay for it some day? Do they know about interest? Or do they think it is someone else's problem to pay it off? Or do they have a "let's not look, maybe it will go away" attitude?

I was a lolpoor when I just started my career after A&M and I never went on fancy vacations, heck I didn't go on any vacations. Bargain shopped, used coupons, cooked myself, no takeout (late 90s, early 00s).

I don't think they care

There is no question that it is in fact a cultural shift in wants and values. When I was in my 20's and 30's I was obsessed with channeling everything I made in to my home, investments, and the bank account. Wife and I made very few "luxury" purchases. We took very reasonable trips/travel, and cooked the majority of our meals. It wasn't until our early 40's that we started buying more high end vehicles, going to Europe, staying in higher end resorts, etc.

We still cook the vast majority of our meals, don't need a bunch a luxury stuff, get our clothes at the outlet mall, and take reasonably priced trips/travel even if we can "afford" to do otherwise.

My kids laugh at my hand me down I-phone 10. I couldn't give a sh**.

Dicer said:

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The issue is they are traveling on credit.

With APR at 20%+ seems like an easy way to get into crippling debt if you dont have the means to pay it off

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They think the world will end before they need to pay it off.... And they may be right.

Dill-Ag13 said:

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Pendulum swinging back towards experiences vs material things in my view

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Agreed.

The younger generations live more for Instagram moments in their lives as opposed to status symbol things, especially when you can do more in life when you're not spending the majority of your money on a house you can't really afford in the first place.

I think that part of the issue is that fewer people are having children. If you don't have other people depending on your income, and don't know who will inherit your wealth when you die, it just doesn't seem as important to save.

Plus death taxes have somewhat disincentivized the middle class to try and provide generational wealth.

doubledog said:

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Dicer said:

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The issue is they are traveling on credit.

With APR at 20%+ seems like an easy way to get into crippling debt if you dont have the means to pay it off

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They think the world will end before they need to pay it off.... And they may be right.

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Doesn't help that the older millenials had their hands smashed as soon as they reached in to the cookie jar of the workforce, and the outlook hasn't improved that much in the intervening years. The younger crew just got the same treatment around covid.

Now the job market is gone, and the generations ahead of the millenials/gen z seem to be rejoicing in the imminent demise of said jobs market( take a look around things being posted here for an example) and the "struggles" that will somehow "harden" people.

Dicer said:

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Ive noticed a trend that millenials/gen z are spending more of their money on travels/luxury items/dining than previous generations. I understand that housing is expensive and its not easy to get ahead now a days but this will have serious long term affects down the line. Social Security age will likely be pushed back and decreased as people live longer, combine that with inflation and lack of savings the country will have a massive borderline homeless population 50 years from now.

https://fortune.com/well/article/genz-millennials-doom-spending-stress/

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Definitely Not A Cop said:

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Plus death taxes have somewhat disincentivized the middle class to try and provide generational wealth.

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Isn't the threshold on death/estate tax somewhere around 10 million??? Other than capital gains on inherited basis that's generally not a big issue.

If you're inheriting even a couple hundred thousand there's nothing to worry about.

Urban Ag said:

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There is no question that it is in fact a cultural shift in wants and values. When I was in my 20's and 30's I was obsessed with channeling everything I made in to my home, investments, and the bank account. Wife and I made very few "luxury" purchases. We took very reasonable trips/travel, and cooked the majority of our meals. It wasn't until our early 40's that we started buying more high end vehicles, going to Europe, staying in higher end resorts, etc.

We still cook the vast majority of our meals, don't need a bunch a luxury stuff, get our clothes at the outlet mall, and take reasonably priced trips/travel even if we can "afford" to do otherwise.

My kids laugh at my hand me down I-phone 10. I couldn't give a sh**.

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If you saw who is handling your food in the restaurants you'd eat out less. Felons can get jobs cooking, cleaning and CDL driving.

I think a lot of it is driven by a mentality that they should have everything at 25 that it took their parents until 55 to get. House, cars, vacations. All of it. Not sure exactly how we got here but there seems to be zero appetite to downgrade from what mommy and daddy provided growing up.

I don't have a problem with people who spend on experiences instead of material goods; I think that A&M season tickets (an experience) are a waste of money but others value the time spent back on campus regardless of the product on the field and I respect that. Same with concerts, travel, etc., spend your money on what makes you happy.

Both of my of my parents died before I graduated high school at the ages of 48 and 56. My wife's mom died a year after we graduated college at 50. I have a congenital heart condition on top of my dad's family history of heart disease. There's a not small part of me that thinks I might as well enjoy my money in case I die early. I'd rather trade 10 European vacations or 20 ski trips for $50k in the bank. And if I live long enough that I wish I had a savings, at least I lived to be old. Sorta like betting against A&M sports.

The only real reason I do work on savings is because I know my wife and kids will need it should I expire early. But if I had no kids and certainly if I had no wife, I might not save a dime and probably wouldn't be in a hurry to pay back student loans. So I don't really fault anyone without children for having the same mindset even if I don't follow it myself.

It is 100% Instagram culture. They scroll through all day every day pictures of their friends and people they follow going on vacation and pictures of their food and they have to post pictures of vacations and their food too.

Sounds like my experience. We still don't take extravagant vacations or spend on new cars.
We do like good wine but the spend is nowhere near what it was in our 40's. I guess we'll just leave it for legacy.

Real annual median income is only up $7,000 since the year 2000
https://fred.stlouisfed.org/series/MEPAINUSA672N

While real housing prices have almost doubled in the same time frame
https://fred.stlouisfed.org/series/QUSR628BIS

Used car prices are coming down since the 2022 peak but are still up far more than real income increases over the same time period:
https://fred.stlouisfed.org/series/CUSR0000SETA02

Inflation-adjusted in-state university tuition is up 45% over the last 20 years (133% non-inflation adjusted). That's nationwide average. IIRC it is worse in Texas.
https://www.usnews.com/education/best-colleges/paying-for-college/articles/see-20-years-of-tuition-growth-at-national-universities

Younger generations are spending for "experiences" because many have given up on the idea of owning a home or being out of debt anytime soon.

Ag CPA said:

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I don't have a problem with people who spend on experiences instead of material goods; I think that A&M season tickets (an experience) are a waste of money but others value the time spent back on campus regardless of the product on the field and I respect that. Same with concerts, travel, etc., spend your money on what makes you happy.

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Yeah, the ROI on A&M football tickets are the worst in the nation.

That's why I didn't go to the t.u. game. I looked on StubHub but the cheapest tickets were $600 each.

Urban Ag said:

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My kids laugh at my hand me down I-phone 10. I couldn't give a sh**.

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I'm on an iPhone 8. But my kids are too young to know to make fun of me.

I want someone to explain how buying a home that has 2-3x in value over the past 10- 20 years is suddenly a fantastic investment. Interesting rates are high and Job security is likely at all time lows.

I should add that I have a friend from high school who enlisted right after graduation. He's single, childless, and about 8 years from retirement now. He spends money like it's going out of style, especially when it comes to bars, strip clubs, hunting, and fishing. His argument is that no one depends on him and if he dies with $1 in the bank, that's $1 of fun he missed out on.

Not certain how that'll hold up if he doesn't die early or if he winds up settling down with someone but at least he'll have his Army retirement to lean on.

texagbeliever said:

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I want someone to explain how buying a home that has 2-3x in value over the past 10- 20 years is suddenly a fantastic investment. Interesting rates are high and Job security is likely at all time lows.

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It's a caveat at best. You have to live somewhere. An apartment, a condo, a townhouse, an RV at the local campground, a tent on the beach, or a cardboard box under the bridge. So while real estate in general can be an investment, I don't view your primary residence as an investment. It comes down to your desired cost of living. If that place where you live appreciates then that is a bonus.

chickencoupe16 said:

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The only real reason I do work on savings is because I know my wife and kids will need it should I expire early. But if I had no kids and certainly if I had no wife, I might not save a dime and probably wouldn't be in a hurry to pay back student loans. So I don't really fault anyone without children for having the same mindset even if I don't follow it myself.

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I'm single and childless too, but I've saved up nearly half a million dollars (including my 401(k)). Just in case I ever actually need the money. But mostly because I'm an introvert without expensive hobbies.

Age?

BonfireNerd04 said:

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chickencoupe16 said:

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The only real reason I do work on savings is because I know my wife and kids will need it should I expire early. But if I had no kids and certainly if I had no wife, I might not save a dime and probably wouldn't be in a hurry to pay back student loans. So I don't really fault anyone without children for having the same mindset even if I don't follow it myself.

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I'm single and childless too, but I've saved up nearly half a million dollars (including my 401(k)). Just in case I ever actually need the money. But mostly because I'm an introvert without expensive hobbies.

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My friend would highly advise you to immediately go have half a million dollars of fun.