View Full Version : Life is so expensive for young adults these days
I have kids in their mid-late 20's. Expenses for them are so much higher than they were for DH and I when we were their ages. Apartments are expensive......unless they are dumps in a bad part of town. Then there's utilities/internet/computers/cell phones/health and auto insurance, etc., etc. Oh.....then there's paying back student loans.
Are your kids in their 20's-30's having trouble making it completely on their own? My kids are working themselves silly......but still, not enough money to cover everything.
Sometimes DD doesn't have much to eat. She does live alone, so that's a bigger expense than if she had a roommate.
I was pretty financially independent in my early 20's.........but back then, a used car was really cheap. I lived in $80/mo apartments. Life was so much simpler and cheaper then!
And it seemed like everywhere I worked, I got incredibly good medical insurance.
It's a struggle today, for sure.
I had very minimal $$ in my 20's and rented a room in a home with a hot plate and shared bathroom. Into my 30's, we were slowly building up our assets bit by bit with a really tight budget and two small children. Actually, my kids had a better time of it in their 20's than I ever did but they are in their 40's now and comment that there are few great jobs to be had. I wonder if the expectations are simply higher.
In our 20s even with two incomes, we lived in a converted garage, a mobile home and a 900 sq foot home. We could not qualify for most home loans even with two incomes and almost zero debt and it took begging to get a credit card with a $200 limit.
How many kids today live in a one or two bedroom apartment instead of the cheapest (safe) studio they can find? Of course, I am from the Midwest and life is cheaper here.
Life was simpler back then I agree.
OP, I don't buy your premise that "expenses for them are so much higher." Sorry, nope.
I rented my first apartment in my first professional job for around $245 /month. I was paid a salary of $15,500 annually.
Today I could rent a similar apartment in Las Cruces, NM (same city) for $450 - $500/ monthly. That job pays easily $33,000 annually.
The rent doubled, the salary doubled. All the rest of it--cars, clothing, phones, I-devices--it's all a choice.
My kids are doing fine, with some reservation..
Three of them are able to live a pretty simple life in Burlington, VT.. none of the three have a car! They zip-drive if they have to. One son was able to buy a home through the fantastic Burlington Land Grant program. None of them make over $33k a year, and they have really rich, balanced lives doing what they love to do.
My NJ son just rented a nice apartment for himself, wife and baby for a rock-bottom for Jersey $1100 a month. He's the one who will struggle a bit until he starts getting a footing with his law career.
I do think it's very difficult to keep a family on one income, but I'm sure it can be done with a decent income from one person, and a lot of good budgeting (a la Amy Dacyzasdkfls (I'm not even going to try to spell her name--you know, Tightwad Gazette lady). Frankly, I don't know if I would fit that category, but I agree with iris lily... it can be done.
awakenedsoul
6-19-14, 7:02pm
When I was 19, I got my first big show: Hello Hollywood, Hello at the MGM Reno, NV. My pay was $440. per week, and I made an extra $100. a week teaching dance. I also worked my night off a lot of the time. My rent was $212.50 per month. I shared a 2 bedroom 2 bathroom with a roommate. My car was a used VW convertible bug. I think I got it for around $2,500. cash. (My great aunt had left me $3,000. in her will.) The job had full medical coverage. I didn't have any student loans or credit cards.
I don't have kids, so I'm just remembering what I spent. Jitterbug phones now are really inexpensive. That's what I use. If I had to cut the Internet, I could bike to the library. For me, when I got into debt is when I had money troubles. Once I got out, I felt comfortable again, financially. The interest and mindset are what really got me. Living beneath your means and having an emergency fund makes a huge difference.
I got married quite young and we struggled very much financially for several years. We had school expenses and rented a studio apt. up on the top floor of a very old house in a small college town. It was charming with the sloped ceilings, basically a nice attic space but tiny, and something that most kids today would probably find beneath them. We didn't own a car for many years and couldn't afford medical insurance either. I remember scraping to buy food. We ate very sparingly. Even after we graduated and found 'good jobs' we still struggled to make ends meet despite being very frugal. We were married 10 years before we were able to buy our first home, a 750 square foot bungalow. We never had any help from our parents either. We did it ALL on our own. I don't see that very often with kids today.
Most kids today seem to have to have the latest and greatest, and want to live a lifestyle that I wouldn't have dreamed of at their age. Many things are beneath them, not to mention the smart phones/cellphone bills and cable TV that is a must for most. I'm not saying all, but most. A lot have parents funding their lifestyles. But then there are the truly poor young adults who grew up in poverty and will always struggle to get ahead. Some have it worse in these times, but most kids are better off than I could have ever imagined at their age. I definitely don't think they are having a rougher time of it than we did back in the day... Most just need to cut down on their unnecessary expenses and they would be better off. Smart phones, cable TV, manicures and pedicures, abundance of high priced clothes, high priced hair styling, larger high priced apts./houses, and newer cars really aren't necessary. I see my own kids wasting money on these things. *sigh*
ApatheticNoMore
6-19-14, 9:19pm
Costs are higher than they used to be in some parts of the country (especially housing costs and healthcare costs - ok the housing costs being higher may be area specific, healthcare costs more everywhere). I don't think it's all that debatable really.
mschrisgo2
6-19-14, 9:56pm
Well, I think it's all relative. My first full time job was 50 hours a week/$100. My rent for a one bedroom fully furnished nice garden apartment was $135, so a third of my take home pay. I had saved and paid cash for my first car, a 5-year-old hotrod Mustang for $2500; that lasted several years. Gas was only 23 cents a gallon, now the gas Tax is more than that! Groceries were way cheaper. And the semester fees for the state college were $32!! You can't buy even One text book for that price now!! So I was able to work and put myself through school, and live on my own.
I just had the car conversation with my grandsons, who are 15.5, 17 and 19. They don't see themselves ever buying cars-- just too expensive. As we talked, I realized that in the 43 years that I've owned a car, I've only made car payments for 5 years, i.e. most of them I was able to pay cash for, including the one I have now.
So some of it is how one chooses to spend the money, and some is more expensive, but a lot of it is relative, IMHO.
I've seen a number of young folks who have a big SUV, all the gadgets, full cable satellite package at home, constant stream of new clothes, continual eating out/going out with friends. One young person once was very demeaning about my (then) 8 year old car. I simply told him he might eventually find out that the payments and stuff were too heavy a burden.
On the other hand, I know a handful of young folks in their 20s who are doing well, very little school debt, paid for cars, all in all pretty frugal.
OP, I don't buy your premise that "expenses for them are so much higher." Sorry, nope.
I rented my first apartment in my first professional job for around $245 /month. I was paid a salary of $15,500 annually.
Today I could rent a similar apartment in Las Cruces, NM (same city) for $450 - $500/ monthly. That job pays easily $33,000 annually.
The rent doubled, the salary doubled. All the rest of it--cars, clothing, phones, I-devices--it's all a choice.
You didn't mention education. That cost, and the associated student loans have waaaaaay more than doubled since you were young. Long gone are the days of "working one's self through college" with a menial part time job.
iris lilies
6-20-14, 12:24am
You didn't mention education. That cost, and the associated student loans have waaaaaay more than doubled since you were young. Long gone are the days of "working one's self through college" with a menial part time job.
A menial job funding college? Agreed, not if that menial job is supposed to provide a roof, food, gas at the same time as school costs. But even back in my day a menial job didn't provide that. However, my menial job paid tuition and books and I lived with my parents (and it annoyed me and them) while working through the last two years of undergrad school. But near the end they also contributed (probably to get me out of their house sooner, haha.)
When redfox was moaning about the enormous cost of her recent graduate degree I ran the cost of my graduate degree today and posted it here and I'm telling you, it's nothing like the $50,000+ that she borrowed for hers although I'm quite certain that I could rack up the cost to $50,000 if I wanted to do that.
I will repeat that I didn't have I-anything devices or cable/dish back then. The ongoing costs of those things are huge. Hell, I don't have them now (but I DO have a nice stash of cash. ;)) When I went back to college I sold my fun sports car (expensive with payments) and paid cash for a transportation mobile. Good choices eliminate much debt.
A menial job funding college? Agreed, not if that menial job is supposed to provide a roof, food, gas at the same time as school costs. But even back in my day a menial job didn't provide that. However, my menial job paid tuition and books and I lived with my parents (and it annoyed me and them) while working through the last two years of undergrad school. But near the end they also contributed (probably to get me out of their house sooner, haha.)
When redfox was crying about the enormous cost of her recent graduate degree I ran the cost of my graduate degree today and I'm telling you, it's nothing like the $50,000+ that she borrowed for hers. Just sayin'.
I will repeat that I didn't have I-anything devices, no cable/dish nuttin', and etc etc. That chit piles up in cost very quickly.
The reality is that education cost inflation has gone up much faster than most other costs and that financial aid is much more loan based then grant based as it once was. If you weren't aware let me know and I'll be happy to find some statistics...
I won't argue with you that the middle class life style has gone up. I-this and that simply didn't exist back in the dark ages when I got out of college. (1990). However, that argument is really a cypher. The middle class life style has been steadily going up since the industrial revolution. I can hear my mom (who grew up poor in rural KS during the dust bowl) now "we lived just fine without electricity on our farm when I was a kid. It was a luxury when we got a generator. The only nuisance was that the fluorescent lights daddy installed didn't draw enough power to make it come on." Or, I can imagine a generation earlier, "central heat? Is it really that hard to put wood on the fire?" Or, "indoor plumbing? How hard is it to walk out to the outhouse?"
It's true that young folks have it tough today in certain respects, particularly with regard to education, which has gotten very expensive. On the other hand, it's also true that too many people today, young people included, view wants as needs. Needs are food, clothing, shelter, medical care and some form of social life. Wants are $100-plus per month smartphones, $100-plus per month cable packages, late-model cars, frequent restaurant meals, etc., etc., etc.
I can see two scenarios for a young person or a young couple starting out in life. One involves mourning over the fact that they can't have the consumerist lifestyle that the daily barrage of advertising tells them they should have, and remaining in perpetual debt to strive for that lifestyle. The other involves thriving on the challenge of living a sane, frugal life.
This isn't to make judgments about specific cases like CathyA's kids. There's not enough info for that. It's just a general observation based on the young people I see around me.
I also agree with Iris Lily that costs now are not that different from when we (50 somethings) were young. If you adjust for inflation, you'll likely find that costs were pretty similar. What is different are the kinds of "necessities" described above.
Working around grad students, I see so many variations on this theme. Many get by sharing apartments and not owning cars. Lots more bicycle riders every year as the expense of owning a car becomes evident. Others are driving Range Rovers, etc so who knows where that income comes from. DD would be doing well if not for her college loans. She was able to co-buy a house at age 27 and just paid off her car. She asks frequently for investment advice so I am glad she is interested in saving for the future. However, I must agree that among she and her friends, lifestyle is very elevated compared to when I was that age. Lots of eating out, parties, spontaneous spending, etc. All the new apartments going up for young professionals have exercise rooms, granite countertops, wood floors, pools, etc and start at $1200 a month for a small 1 BR. I was glad recently to have the chance to visit with my mil with DD and let her hear tales of growing up during the Depression. Beans and cornbread day after day. Such a stark difference in lifestyles and expectations.
IrisLily.........I think it might factor in that you do not have children. It's easy to think it's no more expensive, or that young people can do without certain things today if you aren't in the thick of it.
True, my children could do without certain things. (It's doubly hard when DH never challenges them or questions how they spend their money, pay back VISA, etc.) I'm doing it constantly.
But if they didn't have cars, they would have no job (and even though they both have several degrees, they aren't making that much money). And what person today (even really poor people) doesn't have a cell phone or internet?
Our culture keeps cranking out more and more things to buy and convinces everyone they "need" them. Not only that, but we have a society that has been constructed to really need these things in many instances.
Even though the "poor" are still out there, I'll be they aren't in the same category as "poor" 40 years ago.
I remember having a couple hundred dollars to pay back on a student loan. DD has $60,000. She makes something like $18,000/yr.....and has several jobs.
Seems like we're creating more poverty because we keep building on what we need to have and buy.
Pretty good article in the NY Times today about young people and their attempts to fledge and why they are boomeranging. I am amazed at the loan amounts some have. I suppose that's why I never finished college - I couldn't afford it and had to get a job as so many did back in the 70s. I don't recall there even being student loans. Everything has changed for sure:
http://www.nytimes.com/2014/06/22/magazine/its-official-the-boomerang-kids-wont-leave.html
I guess I'm old school but I don't understand why kids can't live at home and go to a community college for 2 years before enrolling in a state school close to home. And work while in school too? Seemed the common way to do things to remain debt-free, or at least lower school loan debt, while in college if you couldn't afford to pay much towards it. Then, after college, they would live in shared inexpensive apts and eat rice and beans and beans and rice until their work and income improved. Seems too many kids and younger adults have a big list of "wants" and high expectation of things they should have even if they can't afford them. How many young people drive older clunker cars? Or shop at thrift store or discount places? How many have Smart phones (with constantly upgrading), cable TV, or expensive coffee and dining, etc... Seems that, to me, that young adults have a much higher lifestyle then as people over 40 or 50 had at the same age.
I think it an excellent thing to be poor in your twenties. It gives you motivation to get up and do something with your life and an appreciation for the things you work for. It can also teach you how to budget and save for what is really important.
I lived in a series of tents, cabins, VW buses, and finally a converted school bus in my twenties. I married my wife when I was 29. That was the end of the inexpensive period of my life, during which time I had planned to save money to buy land to build a house, but instead spent 6 - 8 weeks a year backpacking and river rafting.
I could have been much more frugal, but I wouldn't trade that decade for any amount of money in the world.
I checked, and the cost of tuition, fees, and books at my alma mater is about $10,000 a year (state school), minus dorm costs which bring the total to about $20,000). When I went there it was about $500. I don't know how anyone of modest means can afford college today without incurring staggering debt, which they will have to pay off at usurious rates across their lifetime. I put myself through, working part time, and incurred no debt whatsoever. My sibling did the two years at community college, two years at a private university while working full time, with part of the tuition employer-paid--also debt-free.
This is in Calif but doesn't seem that much higher then when I went to a Cal state university more than 20 years ago. Community college is $46/unit.
All students enrolling at the CSU pay the systemwide Tuition Fee which is currently $5,472 per academic year for undergraduate students enrolling in more than 6 units per term and $3,174 for undergraduates enrolling in 6 or fewer units. The 2013-14 Tuition Fee for students enrolled in postbaccalaureate teacher preparations programs for a Multiple Subject, Single Subject, or Special Education credential is $6,348 for students enrolled in more than 6 units and $3,684 for students taking 6 units or less. Students enrolled in graduate programs and other postbaccalaureate students pay a Tuition Fee of $6,738 for more than 6 units and $3,906 for those enrolling in 6 or fewer units.
iris lilies
6-21-14, 1:01am
The reality is that education cost inflation has gone up much faster than most other costs and that financial aid is much more loan based then grant based as it once was. If you weren't aware let me know and I'll be happy to find some statistics...
Sure, tuition is higher now as then. But I don't understand how people end up with graduate degrees that are not in the sciences with debts of $50,000 and $60,000 and more, and more importantly, why?
To rehash the subject from just a couple of months ago:
Cost of my Graduate Degree today
Given all of the other chat on the other thread about college costs, I was curious to know how much my graduate degree would cost today. Here it is:
Cost of My Graduate Degree Today: requires 42 semester hours
Tuition $15,564
Books ? $2,500 ?
_________________
Total $18,064
This is the cost of my degree at today’s rates at in-state university, which I did. My estimate for books may be low.
This seems reasonable to me, it's less than a car.
And to also rehash, DH got his graduate degree owing nothing, they paid him to be a TA. And the entire time he lived in a NICE apartment (had a roommate who was never there) and drove a nice, newish car. But these living arrangements were possible because he had lived with his parents on their farm, saved craploads of money while working, so he could afford a paid-for car.
I have four nephews belonging to DH's sister who is good in math; 3 of her 4 boys are scientists and engineers. Somehow this family sent all of these boys through school and none have debt including the mom and dad.
I have another nephew who put himself through school including a graduate degree and he had no debt. His wife has a Ph.d and she's got no debt. They both got real jobs in corporate America and are racking in the dough.
There is a recent NYT article about boomerang kids n high college debt. Their ennui and lack of focus is typical of a lot of good kids. Early 20's is a time to explore life and self, to try out boundaries, to experience the world. I do not for a moment think that everyone should become little learner drones, marching toward the degree, and then slip right into corporate life. But neither do I think anyone does them a favor in encouraging them to think of a career in film direction, cartooning, etc as mentioned in this article. All those things are hobbies, that's not real life and real work.
Not all colleges/universities have the degrees that all kids want.
flowerseverywhere
6-21-14, 7:31am
Anyone been to a young person's wedding lately? Much more elaborate affair than ever. Destination weddings, fancy restaurant or destination showers, exotic honeymoons.
How about looking in a young lady's closet at her shoes? The cars in high schools and college parking lots. Lines of people waiting to get into Olive Garden. Cars that cost over $50,000 dollars. Packaged meals in the grocery store. The rise of gym memberships. Starbucks coffee. Drive through overpriced fast food. Paying for tv and Internet and smartphones.
it is a change in our whole culture, mainly through the advertising we are bombarded with of what we have to have. What at one time was considered a luxury is now normal. Yes, college can be very expensive. Student loans are ridiculous in their current form. Quality food is expensive. Rents can be very expensive. It is all about making do with what you have or figuring out how to do it differently.
Many college loans were/are used for living expenses and not just tuition. That is one of the reasons they get so high. Colleges hand them out like they used to peddle credit cards before being reigned in. After all, how many students would attend without loans? It also allows them to raise tuition year after year.
frugal-one
6-21-14, 9:23am
IrisLily.........I think it might factor in that you do not have children. It's easy to think it's no more expensive, or that young people can do without certain things today if you aren't in the thick of it.
True, my children could do without certain things. (It's doubly hard when DH never challenges them or questions how they spend their money, pay back VISA, etc.) I'm doing it constantly.
But if they didn't have cars, they would have no job (and even though they both have several degrees, they aren't making that much money). And what person today (even really poor people) doesn't have a cell phone or internet?
Our culture keeps cranking out more and more things to buy and convinces everyone they "need" them. Not only that, but we have a society that has been constructed to really need these things in many instances.
Even though the "poor" are still out there, I'll be they aren't in the same category as "poor" 40 years ago.
I remember having a couple hundred dollars to pay back on a student loan. DD has $60,000. She makes something like $18,000/yr.....and has several jobs.
Seems like we're creating more poverty because we keep building on what we need to have and buy.
My son and SO are in their mid-30s and have no cell phone or cable (albeit they do have internet...free wireless). They live a very frugal lifestyle... are professionals.... So NOT everyone NEEDS these things. I agree with others here... these are WANTS not needs. BTW... son and SO have a paid for house and no debt. The house is around 100 years old and they have fixed it beautifully. They also shop thrift stores, garage sales, etc. They don't care or need the latest and the greatest. I am VERY proud of them for not caving into societal pressures.
Arizona is No. 1 in college tuition increases:
http://azstarnet.com/news/local/education/arizona-saw-largest-tuition-increase-over-five-years/article_6e966160-bd7e-5cf7-905d-d08847df424f.html
State funding has been reduced by hundreds of millions of dollars, pushing the cost onto students. The AZ state constitution states that university should be free, or as nearly free as possible.
We're way beyond that.
I'm happy for your kids Frugal-one, but mine have to do alot of traveling in their jobs, and I wouldn't want them without a cell phone. And they also do alot of their work online. So should I expect them to give up their professions? I, personally am able to live differently.
Unfortunately, my kids would have to give up their professions to live more frugally. It's pretty hard to live life in the U.S. today, without some of these things.
And I guess my kids are at that age where they're just starting up their professional lives, and are accruing debt in order to better their jobs, while not earning as much as they will in the future.
What I am saying is that it is a very hard job to stay simple, in a very un-simple/expensive country.
frugal-one
6-21-14, 8:40pm
I think there are always simpler ways. Cell phones could be trac phones or a lesser model to be used only for emergency. I see people using their iPads as phones to save. These would work and not cost as much. Albeit they would not be as "cool".
I agree that life can be expensive for people in their 20s and 30s today. I'm only 30 now, but in my early 20s, when I was a university student, I regularly ended up with nothing in my bank account at the end of the month despite working part-time all the way through my studies, receiving a student loan and always living with other people. However, I had a very different mindset then (until I was maybe 22): I had very low self-confidence and was looking for fulfilment in THINGS and how I appeared on the outside. I amassed about £16,000 ($27,000) in student loan debt, but the repayment system is very different here... you don't repay your student loan until you are earning at least £15,000 ($25,000) per year, and then it comes out of your salary automatically. I HAD NEVER EARNED THIS MUCH MONEY until I started working full-time hours just last month - 7 years after graduating (I had always worked 4 days per week before). So now I'm repaying the debt at a rate of something like £3 ($5) per month, which is far lower than the rate of interest on the loan... BUT, this debt will be cancelled if I don't manage to pay it off before I'm 65, ahahahha! So, to me, it's not REAL debt.
I have not struggled for money since I managed to find regular, steady employment about 5 years ago, despite always earning a pittance compared to other people with my education level and skills. I live with my husband, who has also always worked 4-5 days per week for a comparatively low salary as well. Sometimes I really think salary levels matter less than we think: what's more important are your values and making a conscious effort to align them to your finances. We were very lucky to be able to find a small apartment with low rent in a beautiful area of the city. We don't own a car. We do own cell phones but pay for the most basic package with basic handsets (approx. $20 a month each). We make a dinner plan for the week and buy food accordingly, cooking from scratch. We don't regularly buy things like magazines, CDs or DVDs. We get the majority of our books from the library (I'm a librarian so this is crucial to me!). We do eat out or get take out every so often but we use discount coupons or go for the cheap set menus. We don't own a clothes dryer (this is normal here anyway). We don't subscribe to the drinking culture of the city we live in. We are highly skeptical of advertising claims and nutritional claims on food, etc etc.
All of these little conscious decisions and preferences really add up. I have friends with higher incomes and similar expenses proportionally who struggle for money at the end of each month. They don't stop to think that they don't need to buy five gallons of soda to drink when there's free water in the tap, or that you can get 90% of your books for free at the library down the street (no matter how much I try and push it!), or that you don't need to be paying for 1GB of data on your cell phone plan when you have free Wi-Fi at home, or that it's less stressful and much cheaper to plan your meals in advance rather than racing to do it every night at 6pm and taking an unnecessary trip to the supermarket then coming home with more than you need, etc. Sometimes I want to slap them to try and get them to snap out of it, but I can't initiate this change. It's something they have to realise on their own, I guess. I just don't want to keep hearing about how little money they've got, especially when they know I've never earned a fraction of what they do...
In many cases, I think people just need to become more conscious of WHY they're spending and then really examine it... is it out of convenience? To keep up with their friends? Because they think they SHOULD have X because everyone else seems to? I think these sorts of questions get lost or buried in our very consumer-led society and anyone who chooses not to subscribe to a consumer lifestyle is viewed with a critical eye. It's all a little backwards.
flowerseverywhere
6-22-14, 8:08am
Very nice post, Mira
I am in the process of trying to encourage the boys to choose less expensive colleges or at least to prepare themselves for years of debt and less choices later. They will have to take on some school loans. The $25,000 they each have in savings can either really help or be a drop in the bucket.
Miss Cellane
6-22-14, 9:28am
One difference between now and when I graduated from college in 1981 is the things. The things that simply didn't exist 30-odd years ago.
No cellphones. Certainly no smart phones with the high monthly fees.
No cable TV. Cable existed, but was not yet in my city. I didn't have a tv for the first two years out of college, until I saved up my pennies and bought a $99 13 inch black and white tv. I don't think they make black and white TVs any more.
No internet.
Microwaves were still a luxury item. Most apartments I looked at had no dishwashers.
Cassette tapes were the big deal. No CDs, no DVDs, no need for things to play them on. Walkmen were coming into fashion. No iPods.
Very few people had their own home computers. Sure, you could buy one at Radio Shack. But most people simply did not see the need for one. Lots of people still owned typewriters.
The concept of owning a TV show or movie on videotape was brand new.
My friends and I didn't have cars. We lived in a big city with decent public transportation.
There are whole new categories of things that did not exist 30 years ago. Many, if not most, of today's 20-somethings have always had iPods and and computers and smart phones and internet access at home and microwaves and dishwashers. They don't see these things as luxuries that it is possible to live without. These things are part and parcel of their normal, everyday lives and are more or less necessities. Having your own car is taken for granted by a lot of them. They buy music and tv shows the way people used to buy books.
Just as I expected to have a land-line phone in my first apartment, they expect to have smart phones.
Their starting salaries have more categories of things to cover--my first job paid the rent, food, phone and electricity with a bit left over every month for the savings account. Kids these days have to cover rent, food, cell phone, cable, internet, car expenses, upgrading computers/phones/iPads/smartphones.
And while I might chuckle about a recent college grad who thinks a dishwasher is a necessity, I do think that a home computer and cell phone pretty much are these days, especially if you are hunting for a job. These things have worked their way into the fabric of our lives, so to speak, and while going without them is certainly possible, having them makes many things much easier. But you have to pay for them.
I agree Miss Cellane.
My children couldn't get alot of their jobs done, without a cell phone. They are on our family plan, so that helps.
We just transferred the title of the car our DD was using to her, since she needs to get her own auto insurance and she lives in a different state. Her cost per year for renter's insurance and auto will be a little over $1,200/yr. Then there's the plate and registration and yearly license.
We wanted to title over the car my DS uses to him, and let him be totally responsible for it. But if is on our bundled insurance (cars, home, umbrella), it will only cost him $400/yr. However, if he got his own policy, it would be $1,400/yr. They just can't afford this......but they need the car for their various jobs.
Like I said, this is what our culture strives for.........more and more people needing more and more stuff to function in it. The culture convinces them that life just can't be done without so many things.
Of course you and I know differently. But it isn't easy. It's like asking small children if they would like an apple, or fudge.
I don't get this whole freakout over 'extravagent' cell phone costs. When I graduated from college (1990) there were none, at least not for average people. But I DID have a regular phone. And in NYC I had to pay for every call I made, including local calls. There was no such thing as a free local call in NYC. It was 10.6 cents during the day, 40% off in the evening and 60% off late night. Including long distance to keep in touch with distant friends/family I spent $50-$60/month on average. Not so different from the $70ish I spend now, all in, including unlimited texts and data for service for my iPhone.
Miss Cellane
6-22-14, 11:45am
I don't get this whole freakout over 'extravagent' cell phone costs. When I graduated from college (1990) there were none, at least not for average people. But I DID have a regular phone. And in NYC I had to pay for every call I made, including local calls. There was no such thing as a free local call in NYC. It was 10.6 cents during the day, 40% off in the evening and 60% off late night. Including long distance to keep in touch with distant friends/family I spent $50-$60/month on average. Not so different from the $70ish I spend now, all in, including unlimited texts and data for service for my iPhone.
From my perspective, when I started out on my own, my landline phone cost $14.75 a month, excluding long distance phone calls, but including renting the phone from the phone company. All local calls were free. I saved money by having a regular line instead of Touch Tone. Any long distance calls were made on weekends or after 11 pm, when the rates went down. I don't think I have ever paid $50 a month for the landline, back when it was a stand-alone thing, not bundled with other services.
Currently, I get landline phone, cable tv and internet bundled for $90 a month. Compared to that, for me, $70 for a smart phone plan is high. My cell phone costs $25 a month for unlimited data and texts and 300 phone minutes.
early morning
6-22-14, 12:12pm
My cell phone costs $25 a month for unlimited data and texts and 300 phone minutesWow - that sounds like a great plan - would you mind sharing who it's with? We have not found anything near that cheap that actually has service where we live. I have a Boost pre-pay but for $10 I only get 50 minutes, texts are one minute each, and no data available.
It seems to me that so much, expense-wise, depends on where one lives, and somewhat on what one does for a living. I see posts (not just on this site) about "affordable" houses in price ranges that make me gasp - yet often those same posters are poo-pooing other's claims of hardship. People making huge amounts of money (well, huge to me!)look down their noses at those who can't cut expenses in half ("if we can do it, so can you!") when those others may have been living a very frugal life for years on very little money, with almost nothing left to cut. I was practically drummed off one site for refusing to consider giving up our cars - there's no public transportation here, no safe bike lanes, and DH couldn't possibly ride a bike anyway, due to his medical condition!! Humans are soooo judgmental....
Cathy A - it IS more expensive today for many things. I see that clearly, as I have two adult children and I've helped them look for cheaper ways to do things. Like live in a fairly safe place they can afford, get around in a fairly safe car with insurance, find cell phone plans they can afford (no land lines, too expensive!) etc. One, at 30, is living back here. The other just landed a job he loves, that pays squat, and is living with 5 others in a dump. And he still runs out of money. Both of their cars are in our names and they pay us for the insurance costs - which are about 30% of what they would be if the cars were in their own names. (Before you all slam me for that as "cheating", it was on the advice of our insurance agent.) And they will have phones if I have to pay for them myself. Old cars, back roads, long distances between houses - honestly, I think people who send out their (younger) kids without phones are as guilty of neglect as those in my day and age who let their kids drive any old clunker, safety be damned.
I agree early morning!
You mentioned safety......which we've always been concerned about. Yes, the kids could have gotten a much cheaper apartment, in a horrible part of town with cockroaches. And yes, both DD and DS could have gotten cheap cars with bad safety ratings, but we happen to really like them and want them to be as safe as possible in an accident.
So there ARE alternatives in some areas, but they aren't very good.
And when my kids were in high school, it was 21 miles from our house and we sure as heck wanted them to have cell phones. And they were only allowed to use them for emergencies.
so much, expense-wise, depends on where one lives, and somewhat on what one does for a living
It talks about that in the linked article above. How middle income lifestyles (as we lived in the 50s-70s) are evaporating. People in the $100K+ household income club can easily afford the things we call necessities today. For those making less, it makes living costs very expensive. What irks me is how every category inches up every year - taxes, fees, utilities, gas, etc.
And everything they've ever done or ever will do is immortalized somewhere. So any misdemeanor, overdraft, or indiscretion can and will be held against them. Their FICO scores had better be pristine, or they may find themselves living in their car--which is a good reason to have one.
When I moved into my apartment in NYC I was paying $650/month. That was pretty much the low end studio apartment cost back then. I probably looked at a dozen similar apartments at that time, all for around $650. Looking on craigslist now it appears that the low end is somewhere around $1800. http://newyork.craigslist.org/mnh/abo/4529735503.html This looks very similar to what I had. At the time I was making $25k/year. Adjusted for inflation my salary today would be about $45k around to the BLS. Instead of half my takehome pay, if I were starting out with the same job and trying to get the same apartment I'd be paying 2/3 of my takehome on rent. On top of that way more people starting out today have student loans. I was fortunate not to have that expense. That math for these two expenses alone just doesn't work for young people today compared to my experience.
rodeosweetheart
6-22-14, 6:08pm
This is a very interesting thread and that was an interesting NYT article, thank you Pinkytoe.
My kids are 28 and 32. 32 year old has massive undergrad debt (not sure, but it's probably still around 40-50k.) He and wife are relocating to a part of the country where they hope to live for something other than paying off these debts. I believe she has paid off her grad school debt; they are expecting baby, and say their share will be around 7500-10000, I think. They do not think they will ever own a house.
ONe 28 year old lives in Portland with housemates-- believe each one pays 250. He has lived this way since high school, dropped out of college and said he did not want any debt and no one he knew graduating could get better jobs than those without college degrees. Other 28 year old lives in paid off house with wife and one child, live very frugally in paid off house in uber cheap part of country. He graduated from college, paid off debts, lost his college degree job when state cut out social workers, and now works at a factory.
My kids on their own from graduation from high school or college. Various nieces and nephews got lots of parental support, apartments, houses to live in, grad school--and some are boomerang but most doing really, really well. They all got lots of money in undergrad--semesters abroad, parents paying for car insurance, housing, med school, residencies. etc. and live much higher on hog than my kids.
If you have rich parents, you will do much, much better in this economy, and get the chance of much more education and much better jobs. If you have what my kids have, well, it's a tough row to hoe these days, I think.
rodeosweetheart, how did your 28 y.o. wind up with a paid-off house SO YOUNG? He's doing something right--did he move specifically for the cheaper housing market?
I think the message here is, you can't have it all. It's all about choice (as iris lily said). I'm really proud of my kids because they are living the life that, if I could rewind the clock thirty years, I might choose for myself.
I guess I put some expensive ideas into my kids head........like eating good food that they know where it comes from. But that translated into organic, Vegan, Vegetarian.......and that can be more expensive than some other cheaper foods. And I taught them to live in safe areas, and other things, so I realize they learned some of this from me. I am very proud of who they are as people. It was hard, but DD finally learned how to handle her money.
DS has a fair amount of credit card debt, but he's starting his own business and is in demand.......so hopefully he will get his debt paid off sooner rather than later. He and DH are alike in that they don't seem to be bothered to just paying interest every month. That drives me crazy! What a waste of money. I think DH would be bankrupt if it weren't for me. And I think he didn't stress being financially responsible to them as much as I did.
Anyhow.......I still think it's much more expensive these days. But yes, they are used to a higher standard of living than I had at that age.
I guess I put some expensive ideas into my kids head........like eating good food that they know where it comes from. But that translated into organic, Vegan, Vegetarian.......and that can be more expensive than some other cheaper foods. And I taught them to live in safe areas, and other things, so I realize they learned some of this from me.
First of all, it sounds like you have wonderful children, so congratulations on that. It's not that common for families to be cohesive, unfortunately, but if our children are functioning and talking lovingly to us and each other--to me that's the measure of success as a parent.
With regards to the organic/healthy/vegan thing.. I agree to some extent that eating healthily CAN be more expensive than relying on Ramen noodles and processed food with the sales of the week, but I argue with DH about this all the time.. I really don't think it has to be more expensive.
This morning I sat out in my yard re-reading Helen Nearing's Simple Food--my FAVORITE "cookbook"--although it's kind of an odd cookbook, written by someone who says she could care less about food, and she feels the less time spent preparing food the better. MY KIND OF WOMAN. But the recipes are so easy and require nothing but your own intuition and good, fresh produce.
Simple food is really pretty cheap. OK, you have to eat a lot of vegetables that are expensive off-season--so only eat the ones in-season. Eat them five times a week if you have to. I don't buy that argument that healthy eating is expensive, and never have. Although I do say that our culture does make it difficult to eat well and cheaply at the same time.
As for the neighborhood thing, I've had to let go a lot with my DD who has wanderlust for questionable neighborhoods. She's lived in BedStuy, Brooklyn, and Columbia Heights, Washington, and in a number of cohousing situations that I had to really turn a blind eye to, because she was adult. But I strongly believe that if we give our kids the tools to enable them to be their own "radar" then we can just back off. I am so proud that my son traveled to Mammoth CA on a snowboarding trip by himself when he was 16, and my DD figured out that after her apartment in BedStuy got robbed she should probably move (which she did), and when city life got too much for my other son, he just headed up to VT where he serves tables and writes music and has no debt, or car. I implicitly trust my kids' instincts, and those are the instincts that are serving them well now.
That being said, my DD has a couple of credit card bills that are creating a burden for her after years of having everything under control, so I hope she can just get it together and pay it all off. I've tried to tell them that debt is nothing short of slavery, but some people have to come to that realization themselves.
And everything they've ever done or ever will do is immortalized somewhere. So any misdemeanor, overdraft, or indiscretion can and will be held against them. Their FICO scores had better be pristine, or they may find themselves living in their car--which is a good reason to have one.
Good point, JaneV2.0. Along with a resume, requiring access to your credit report is standard for employers these days. Creepy.
iris lilies
6-22-14, 11:56pm
When I moved into my apartment in NYC I was paying $650/month. That was pretty much the low end studio apartment cost back then. I probably looked at a dozen similar apartments at that time, all for around $650. Looking on craigslist now it appears that the low end is somewhere around $1800. http://newyork.craigslist.org/mnh/abo/4529735503.html This looks very similar to what I had. At the time I was making $25k/year. Adjusted for inflation my salary today would be about $45k around to the BLS. Instead of half my takehome pay, if I were starting out with the same job and trying to get the same apartment I'd be paying 2/3 of my takehome on rent. On top of that way more people starting out today have student loans. I was fortunate not to have that expense. That math for these two expenses alone just doesn't work for young people today compared to my experience.
Here's the thing: I wouldn't live in NYC due to the cost. Even though back in my youth I would have loved living there, my sense about money kept me away.
When I went job hunting across states I kept to the Midwest for the specific career things and really preferred Chicago due to technology in that area. But I couldn't afford to buy a house there and that's why I ended up in a University town with a more reasonable cost of living because I wanted to buy a house before I was 30.
A house was not a good financial decision, I lost a little money on it when I sold it, but ya gotta live somewhere and that experience taught me about mortgages and to not ever have one. The career choice there was decent--but Chicagoland would have been better.
So yeah. Choices.
Iris, Fair enough. But that doesn't negate the OP's point that life is more expensive now for young people starting out. Discounting NYC because you felt it was too expensive 30 years ago, and is even way more now, is simply not a realistic viewpoint. There's a tradeoff between living somewhere pricey but with lots of opportunity and moving somewhere cheap with less opportunity. I was lucky to move to NYC when I could afford to live there on an entry level salary and was able to move up job-wise from there. Based on rents there now that doesn't appear to be the case anymore.
goldensmom
6-23-14, 6:36am
Depends on needs vs. wants. I must be really old because when I started out on my own my hourly wage was $1.65/hr. and gas was $.69/gal.. I lived comfortably and went without things I wanted but had everything I needed. Life sure felt expensive at the time. Add increased wages and inflation, subtract wants from needs and it’s about the same today as way back when.
Sometimes I think the best thing we can teach is patience, perserverance, delayed gratification, planning for the future, and goal setting. Why do we talk so much about things? Every time a child starts off talking about things, they need to be reminded to look at their plan and their goals and if they dont have them to sit down and figure that part out first. Getting started in life is hard and expensive at any age.
I feel that those with the most life satisfaction use the above. Took my husband 11 years to get his college degree and a huge amount of patience and planning. At the time, we had no life outside of work and school but we knew that the future held potential. We rode the bus to save money and studied while riding. We did not have a TV because it was a time waster. (Heck I had to type all his college papers since computers were not available.)
Good advice sweetana.
I think kids today are maybe not as patient because lots of things are immediate today. Everything happens quickly. I fear that the qualities of patience and delayed gratification aren't well known by the younger generation.
But there again, our culture has caused alot of that with immediate results for so many things.
frugal-one
6-23-14, 5:22pm
Interesting that my DS was reading The Tightwad Gazette when I brought it home in the 90's and learned by example how to be frugal. I have to admit that he is even MORE frugal than I am in many areas (one not being organic food). He eats all organic, I do not. I think he learned from us to make do, delay gratification, and basically do your own thing. We never kept up with the Jones's or do we now. He is the same. As mentioned earlier, he has a paid for home, works at a job that pays the bills. Albeit, the bills are not large since he does not have a cell phone or cable. His choice to delete these "necessities" from his life. He does have a professional job. He tells me he values time over money. He was offered a promotion and was able to turn it down because of the choices he has made. He did not want the added stress and the money was not a motivator. I think he is wiser than I was at his age. Needless to say, I am proud of the person he has become. I am not sure everything can be attributed to our culture. Everyone has to make their own choices as to what they value.
So many laws/rules have been put in place that make things so much more difficult for young people. And for any age really.
Cars used to be fixable at home. One used to be able to drive a clunker. That's not legal anymore with inspections. Car Insurance was not mandatory. Yes, many of the changes are good in that things may be safer but there are consequences to these changes along with the decline of many public transportations systems.
I think in San Diego it is illegal to sleep in your car so that is not a backup option if you lose your home!
Parents are also to blame by stating, "You can't drive that, that's not safe!" "You can't live there, it's not safe!" My mother tried to place these burdens on me and I see my friends doing it to their children. These kids are not trying to buy a total rustbucket car or live in a stereotypical ghetto, they are looking at reasonable options for their budgets, which are not bad, just not up to the standards their parents currently live after working for 20 years.
Times have definitely changed.
I kept my 'rustbucket' of a car registered in my home state so I could avoid the inspections in Philly where I was living at the time. There is no way I could have made a go of it if I had to get a car with a car payment.
Bunny trail: Having now disassembled dozens of crashed cars to extract the passengers, I would strongly encourage you to drive vehicles made after the year 2000 or so. There is a huge difference IMO in the survivability in a crash.
https://lh3.googleusercontent.com/-vB4QOlGcNfs/U1QkY72re-I/AAAAAAAAKP4/z0L_xisXiSA/s640/Awesomized.jpg
HappyHiker
6-23-14, 8:10pm
I dunno..seems to me we've been sold a bill of goods on what we need to live. Think about it.
When I graduated college, I had
-no car
-no cell/smart phone. No apps.
-no computer
-no credit card (and so no cc debt)
-a tiny b & w TV. No cable TV.
-No Netflix, iTunes.
-a record player my Mom had bought with S & H Green stamps
that was pretty much it. Had a tiny college loan to pay back.
And I was happy. Now we need so many gadgets to get by. Or think we do. Because everyone else has them. Can't live without them.
Is there a lesson here? Maybe it's that keeping up with Joneses is expensive.
And that I'm glad I became a young adult way back when...it was easier then.
Bunny trail: Having now disassembled dozens of crashed cars to extract the passengers, I would strongly encourage you to drive vehicles made after the year 2000 or so. There is a huge difference IMO in the survivability in a crash.
Thankfully, it's not hard to own a car made after 2000--that was 14 years ago already. My DDs first car was a used 2000 VW New Beetle, and when DH and I checked the safety ratings, they actually weren't bad for a small car because of airbags in the door. As for my 3 boys, I'm afraid their cars were built before 2000 and they were not very pretty, and I thank God that we all got through those teen/young adult years unscathed.
ApatheticNoMore
6-23-14, 8:41pm
Isn't it more older generations that thought they needed to own cars and not "young people these days" though? I've personally never seen more people who think cars are unnecessary than younger people (Am I really the last generation that couldn't wait to get our licenses?!). It's true public transportation is better than it was, but that doesn't make it great.
Computers and cell phones well I can see many jobs requiring them (and I would be fired in short order if I told them I no longer had a computer from which I could work outside the office.)
As far as cars go, I think city/state planning encourages people to have to drive to get anywhere. Around here, they build huge subdivisions out in the country........then the people have to drive distances to get anywhere.
My kids' high school was 21 miles from our house........one way.
Both my kids' jobs take them fair distances away from their homes. Life would be wonderful if everything were close by, but it's definitely not. And city planning around here, doesn't really plan very well for that.
Miss Cellane
6-23-14, 9:40pm
I agree about the cars. The majority of the US is designed for individual car ownership.
Until I was 27, I lived in Boston. A car would have been more of a liability than an asset. I would have had to either spend hours trying to find a legal parking space, as I lived in an area with resident permit parking and the permit authority admitted that they issued about 5 permit per available parking space, or rent a space by the month in a commercial parking garage. My apartment had no parking at all, except the permit only spaces on the street.
Then I moved to Connecticut for grad school. My university was out in a rural area. I was extremely limited in my choice of apartments because I needed to be walking distance to campus. There was one small grocery store with high prices in walking distance, one drug store, one hardware store. Even with my bicycle, there was little else that I could access without a car. (I consider walking distance to be a mile and a half.)
The university ran a sort of shuttle bus between campus and the neighboring town. It stopped running at 5 pm; many of my classes started at 6:30 pm. I could get to the local small mall, which had a large supermarket, on the bus, and either stay for 30 minutes or 4 hours, as the shuttle didn't stop at the mall on every run. It simply was not practical to rely on the shuttle to get around.
Got my first car at the age of 29. It made life in that rural area a lot easier. I could run errands without having to ask friends for favors, and get home to see my parents more often than the end of the semester. I could get to the doctor or the hospital on my own. Drive to see friends. Get to campus easily for an evening activity--walking home in the dark on narrow roads with no shoulders or sidewalks and no street lights and sometimes intoxicated undergrad students driving around was not a fun thing to do.
Getting back to my parents' house took three hours by car. By bus, it took either asking a friend to drive me to the next town, paying a taxi $15 to get me there, or taking the university shuttle, which took 45 minutes (for a 15 minute drive) and got me there an hour and a half before the bus left. Then there were two transfers to other Greyhound buses, each with a half hour or hour wait. What took three hours by car took at least 7 hours on the bus, plus the time needed just to get to the bus station. Getting home took most of the day by bus.
But I clearly remember one of the professors in my department complaining about the lazy, entitled grad students--we all had cars, he hadn't needed a car when he was in grad school, no wonder we were always complaining about money. But not having a car in that area really was a hardship.
IrisLily.........I think it might factor in that you do not have children.
I have three kids and agree with IrisLily:-)
iris lilies
6-23-14, 10:06pm
Arizona is No. 1 in college tuition increases:
.... The AZ state constitution states that university should be free, or as nearly free as possible.
Perhaps we should just make everything free. Why don't you and Rob start that out there in AZ and I'll be along shortly.
iris lilies
6-23-14, 10:13pm
Iris, Fair enough. But that doesn't negate the OP's point that life is more expensive now for young people starting out. Discounting NYC because you felt it was too expensive 30 years ago, and is even way more now, is simply not a realistic viewpoint. There's a tradeoff between living somewhere pricey but with lots of opportunity and moving somewhere cheap with less opportunity. I was lucky to move to NYC when I could afford to live there on an entry level salary and was able to move up job-wise from there. Based on rents there now that doesn't appear to be the case anymore.
bolding mine.
It is realistic for me. It's entirely realistic because I need financial security above all else. I am not a risk taker in that regard. I have NEVER been without a stash of cash as self-supporting adult. It just scares me to be without money.
Let the risk takers move to NY along with those who are less money oriented. These people are not wrong, I want to emphasize that. They are just making a choice that comes with a set of consequences.
Tuition-free universities exist in Norway, Sweden, Austria, Germany and Finland for starters.
Most likely because they do not have a gargantuan military budget and they have also decided, as a country, that it's better for as many of their citizens as possible to get a higher education and they are willing to expend tax dollars to do it.
but, you know, if Apple Corp. wants cash, Arizona has it! Millions and millions of dollars, for a corporation that is already sitting on $137 BILLION in cash!
It's all about choices on the state level too.
gimmethesimplelife
6-25-14, 6:15pm
Arizona is No. 1 in college tuition increases:
http://azstarnet.com/news/local/education/arizona-saw-largest-tuition-increase-over-five-years/article_6e966160-bd7e-5cf7-905d-d08847df424f.html
State funding has been reduced by hundreds of millions of dollars, pushing the cost onto students. The AZ state constitution states that university should be free, or as nearly free as possible.
We're way beyond that.I graduated from NAU (Northern Arizona University for the non Arizonans here lol) in December 1990. Grants back then covered my full tuition and books and most of my room and board and I graduated not owing a dime. Today? Not possible on grants alone. Sorry, not in Arizona, just not going to happen. Tuition my last semester in 1990? $750.....Personally if I were young I'd seriously be questioning if remaining in the US under these current conditions was a viable choice as I don't see things overall getting better - at least as far as the financial side of life goes. Rob
Yes my sons are mid to late 20's, I see the bills and daily living. % wise it seems far more then we spent at that age on living. Yes fully agree things like cell phones are a choice. Been through that on postings on boards for years. Internet, same. Car insurance is far greater then we ever paid, just that bill alone sends the living % comparison over the top. Neither son has debt or credit cards, cash life.
Perhaps we should just make everything free. Why don't you and Rob start that out there in AZ and I'll be along shortly.
Obviously everything shouldn't be free. We make those decisions on a case by case basis. For instance Most people are probably fine with the fire department responding for free. Making ice cream trucks give out free ice cream? Probably not so many would agree. Whether universities should be free or subsidized depends on whether we as a society think the value of educating those students is worth the cost to the taxpayers. We've decided it is worth it up through high school, so why not college. That seems reasonable to me but may not to others. Of course I'm sure there are others who'd be happy to end free education before high school too.
Heck, I support free university with a huge number of qualifications and limits. Students should be 1. motivated, 2. qualified with grades/tests/etc., 3. subject to immediate removal for cause, ..................
I do not support unlimited American style taxpayer provided university education for all. My brother is a case in point. He wanted to "get away from home" and "party". He lasted one semester. He was not motivated, did not have the grades, and was really not interested in school.
In France, there is great competition for school. If you dont meet the requirements, you dont get in. But they also have well developed apprenticeship programs for those not interested in further formal education. That is why we often hear of 15 year olds deciding to become chefs and working in kitchens. Some have blended high school and work. Lots of ideas used in Europe.
ApatheticNoMore
6-26-14, 12:36pm
Well university did used to at one point be quite cheap through the colleges in California, nearly free at one point, and it worked quite well. But this was in the days you didn't need a college degree to flip burgers and so the people who went while they may have been motivated by money in some case, they were motivated by more than just decent survival.
Because the problems that are trying to be solved CAN NOT, simply can not be solved via more education. The problem is the lack of jobs, not to mention decent jobs. Of course it's not solved in some parts of Europe either!! I'm not going to generalize about "Europe" because some countries have systems that work quite well overall, quite low unemployment, and good wages even for the people at the low end jobs. But other countries everyone spends forever in school and the unemployment rate is still high, so it's just a lot of very well educated unemployed people in a very harsh competitive system (less harsh because of a safety net YES, HOWEVER any system of high unemployment will likely have those super competitive qualities).
So no actually I don't think requiring another 4 years of education for everyone IS reasonable, no matter how it's paid for. Not even. But then someone needs to talk about the lack of ways to get money to live on problem. Don't Americans already spend more time in school that much of the rest of the world? (because they start university later)
People go for a semester and then drop out. Meh. The community colleges were CREATED in most cases to provide educational opportunities to even, those who weren't pursuing a degree, just general education. A music major is going to the community college not for a degree but just to learn a bit more between their live performances while trying to "make it" - I'm shocked, shocked. Actually, I like that vision a LOT better than the degree focused one, at least can we allow it for the community colleges? But one may find out after a semester that college is not right for one and not have known that without trying it. How does one even go to college for a semester and party? Don't they at least have to work for living expenses? Unless they are financing the entire of their living expenses on loans. Well it does seem dumb to finance a semester worth of partying on loan, but I guess it says something about how bereft the rest of society is. In a better culture these people would be going on "walk-about" and traveling the world as a young person rather than playing around with an education they aren't even seriously attempting to get a sorry party break from a workaholic culture. But other cultures are ok with young people doing that (mostly places with less unemployment) and American culture isn't. If any legitimate breaks were allowed from working even for 20 somethings such as taking some time off to travel as a 20 something was considered ok, then they wouldn't be misusing education institutions. Taking only a single class just because you want to learn that subject it is not actually misusing IMO, but putting no effort toward learning anything is.
In France, there is great competition for school. If you dont meet the requirements, you dont get in. But they also have well developed apprenticeship programs for those not interested in further formal education. That is why we often hear of 15 year olds deciding to become chefs and working in kitchens. Some have blended high school and work. Lots of ideas used in Europe.
I think most of Europe is pretty darn screwed up in this matter, so I don't actually see emulating them as an improvement (more like be careful what you wish for!). On other matters Europe may have the right idea, but their education system? I don't think so ... And it's hard to even imagine an apprenticeship system working in a country that has outsourced most jobs like the U.S. and requires a 4 year degree for those it hasn't outsourced (even if in theory apprenticeship training would suffice - if companies decide to require the degree it doesn't matter).
What concrete jobs do people see a high school apprentice system training for? If it's just tossing fantasies in the air about apprenticeships jobs that won't be there, then yea it's pretty typical of the political solutions we get, but it's garbage. In fact many high schools have already gone down this road to some degree, it's not like it's even some new idea, but I think most people that graduate from them still end up going to college to get a decent job. You'd need an economy that would actually have jobs for the apprentices, I don't think we have it by and large in this country. We have an economy with a few true professions, a few half decent white collar jobs, a few real blue collar jobs (but I don't think they need to be flooded with workers either) and a vast area of low paying service work. EDUCATION IS UNLIKELY TO CHANGE THAT REALITY.
I do not support unlimited American style taxpayer provided university education for all.
Me either, but I don't know why college is not 100% tax deductible, but mortgage interest is.
ApatheticNoMore
6-26-14, 2:28pm
Me either, but I don't know why college is not 100% tax deductible, but mortgage interest is.
It really wouldn't matter unless it was enough of an expense to make itemizing make sense. Many people in the country don't even itemize their mortgage interest (where the amounts of mortgages are high it makes sense to itemize of course). I think at one point ALL interest was itemizable, which may have encouraged debt but was at least fairer. I didn't until recently realize what a total scam the mortgage interest deduction was*. I really thought it was just for buying houses (condos whatever) ok. I didn't realize you could basically get a deduction for anything by using Helocs and the like, but I think maybe you can. If that's true then it really would be fairer to make all interest deductable rather than having to launder interest through a house first, that is completely ridiculous.
* I didn't until recently understand what student loans were used for either. I thought they were used to pay tuition and books (duh) I didn't realize people actually used them for living expenses! I guess I'm pretty naive in many ways.
Many people in the country don't even itemize their mortgage interest (where the amounts of mortgages are high it makes sense to itemize of course).
Really?? I can't imagine having such a small, cheap-interest mortgage that it isn't worth itemizing, but as you say, I live in Central Jersey, so...
I think the whole idea of deducting mortgage interest is related to how we value the symbols of The American Dream... and it's one way for the government to help people strive for and attain the 3-bedroom, 2-car garage family home with 2.5 kids and dog. A lot of people feel that the mortgage deduction makes alternatives like renting or owning outright financially stupid ideas (which I certainly don't believe).
It really wouldn't matter unless it was enough of an expense to make itemizing make sense. Many people in the country don't even itemize their mortgage interest (where the amounts of mortgages are high it makes sense to itemize of course). I think at one point ALL interest was itemizable, which may have encouraged debt but was at least fairer. I didn't until recently realize what a total scam the mortgage interest deduction was*. I really thought it was just for buying houses (condos whatever) ok. I didn't realize you could basically get a deduction for anything by using Helocs and the like, but I think maybe you can. If that's true then it really would be fairer to make all interest deductable rather than having to launder interest through a house first, that is completely ridiculous.
* I didn't until recently understand what student loans were used for either. I thought they were used to pay tuition and books (duh) I didn't realize people actually used them for living expenses! I guess I'm pretty naive in many ways.
That's what most of my DD's college loans were for............rent and food in her master degree days. That can really add up!
ApatheticNoMore
6-26-14, 3:43pm
Itemization is actually not all *that* widely used. Itemization is talked about (be sure to deduct this charity contribution!) far more often than it's actually used. Only about 30% of federal income tax filers itemize. And apparently "The home interest deduction is claimed by fewer than a third of federal tax filers and less than half of homeowners." (some of them may own their home free and clear though). Itemization is used more often by those in higher tax brackets and it benefits them more.
Itemized deductions are worth more to taxpayers in higher marginal rates, because the value of a deduction is simply the deduction multiplied by the tax rate.1 Itemization raises after-tax income by 4.4 percent for taxpayers in the top bracket and by more than 3.5 percent for those on the AMT, compared with 2.4 percent for taxpayers in the 33 and 28 percent brackets. Taxpayers in lower tax brackets benefit much less: Itemization boosts after-tax income by less than 1 percent for those in the bottom two brackets
Remember that next time they tell you how progressive the tax code is.
It's pretty crazy when you find out how this stuff actually works:
"Right now, homeowners may deduct interest on second homes as well as principal residences so long as the combined amount borrowed doesn't exceed $1 million, and they may deduct interest on home equity loans up to $100,000
That's insane. Why are second mortgages tax deductable? Is it just naked giveaways to the rich time or what? And why 100k of loans only if they are laundered through houses?
I was right about ALL interest once being deductable:
Prior to the Tax Reform Act of 1986 (TRA86), the interest on all personal loans (including credit card debt) was deductible. TRA86 eliminated that broad deduction, but created the narrower home mortgage interest deduction under the theory that it would encourage home ownership.[18] A New York Times article notes that, in 1913, when interest deductions started, Congress "certainly wasn't thinking of the interest deduction as a stepping-stone to middle-class home ownership, because the tax excluded the first $3,000 (or for married couples, $4,000) of income; less than 1 percent of the population earned more than that;" moreover, during that era, most people who purchased homes paid upfront rather than taking out a mortgage. Rather, the reason for the deduction was that in a nation of small proprietors, it was more difficult to separate business and personal expenses, and so it was simpler to just allow deduction of all interest
But with HELOCS the deduction becomes a deduction of ALL interest up to 100k but only if it's laundered though a house, otherwise your interest is not deductable.
https://en.wikipedia.org/wiki/Home_mortgage_interest_deduction
http://www.urban.org/uploadedpdf/1001486-Who-Itemizes-Deductions.pdf
http://money.cnn.com/2013/05/10/pf/taxes/tax-reform-mortgage/index.html
ApatheticNoMore
6-26-14, 3:50pm
That's what most of my DD's college loans were for............rent and food in her master degree days. That can really add up!
Yea I really never realized people did that until I first heard the idea about 6 months ago. I heard it in terms of a life hack if you will, in bad economic times, like if you are completely broke say and you can't get work, you had no savings or already burned though most of your savings being unemployed, and you have healthcare expenses etc., then you could temporarily go to school and take out loans to get you through if you had no other ways to get money (of course you'll still need SOMETHING to land you on your feet eventually - the loan thing is a temporary solution not a permanent solution - unless your a few years from SS or something :) ). An abuse of the system to use student loans as a de facto social safety net in a country with few safety nets? Yes almost certainly. And it's non-dischargable! But understandable if one was down to one's last penny (better not to end up there in the first place!) But I had never realized student loans could be used for other than books and tuition in the first place. It had never occured to me.
That's insane. Why are second mortgages tax deductable? Is it just naked giveaways to the rich time or what? And why 100k of loans only if they are laundered through houses?
Thanks for the info! I'm definitely going to read through that because I assumed that everyone itemizes their mortgage deductions. And don't forget, you can itemize property taxes and homeowner's insurance, too--and again, I'm from NJ where property tax is considerable
As for the interest deduction on second homes, I thank God for that deduction, because back when I had that albatross of my MIL's house dangling around my neck with a $360k mortgage on it, and no one living in it, I was really happy to get some relief from that bottomless money pit.
iris lilies
6-26-14, 5:32pm
The IRS standard deduction for us is $12,000. While it's true that we don't have a mortgage, I'd be hard pressed to imagine a world in which our mortgage, should we have one, exceeded that amount. But when combined with other itemizations, it would theoretically push us over the standard. Sometimes our itemized deductions exceed the standard, sometimes not. Last year we itemized.
As far a deducting educational expenses I say "why, sure! " and while we are at it let's just deduct everything! If we can't make higher education free for everyone regardless of aptitude, then at least let's be able to deduct this and all costs from our tax bill. Really if we could get deductions down to the point where no one pays any taxes, that would be good. Right?
Closing corporate tax loopholes: http://articles.chicagotribune.com/2014-04-20/business/ct-walgreens-europe-oo-smith-0420-biz-20140420_1_tax-haven-loopholes-walgreen-co
I'm thinking of moving my financial self, Lainey Inc., offshore. Not paying taxes is Standard Operating Procedure for our big businesses, so maybe Lainey Inc. and others should do likewise. I'll still enjoy everything that our first-world country provides, and keep all of my money too. Just think of all the jobs I could provide with that extra cash - trust me!
As far a deducting educational expenses I say "why, sure! " and while we are at it let's just deduct everything! If we can't make higher education free for everyone regardless of aptitude, then at least let's be able to deduct this and all costs from our tax bill. Really if we could get deductions down to the point where no one pays any taxes, that would be good. Right?
Believe me, I have a long way to go before I don't pay any taxes. I just think it's a statement on our values to allow mortgage interest deductions, but not education, so if I had to choose, I'd remove the mortgage interest deduction and let students, or parents who are footing the bill for their kids, deduct a bigger part of the cost of tuition. Do we want to encourage education or mortgage debt?
For you, you'd have to give up US citizenship if you have it.
And if you do, and move significant amounts of capital outside the USA as part of the process, they take your loot on your way out.
iris lilies
6-26-14, 11:35pm
Believe me, I have a long way to go before I don't pay any taxes. I just think it's a statement on our values to allow mortgage interest deductions, but not education, so if I had to choose, I'd remove the mortgage interest deduction and let students, or parents who are footing the bill for their kids, deduct a bigger part of the cost of tuition. Do we want to encourage education or mortgage debt?
Of course it's a statement of our values, or the values of Congress in the social engineering of our society. Progressives like herding the sheeple toward doing things.
"We" should not be putting the official stamp of Nanny G approval on any of it--mortgages, education, popping out tots--none of it. Could we please just move to a flat tax structure?
I was today looking over our 2013 tax return today: deductions, exemptions, credits--jeez, when will it end? Stop the madness.
Of course it's a statement of our values, or the values of Congress in the social engineering of our society.
Could we please just move to a flat tax structure?
.
Actually, I think it's a statement of K street's values. Obviously the real estate lobby is more powerful than the education lobby. Which shouldn't be a surprise considering how much more real estate brokers make compared to teachers.
I'd be fine with the flat tax structure as long as it was somewhat progressive. I make a good living. I don't expect minimum wage workers at Walmart to contribute an equal percentage of their paycheck to federal taxes that I do.
But good luck making a major change to the federal tax structure. Wall street's lobbyists will have a freak out at the idea that investment income should be taxed as much as earned income. Thanks again, K street! Always making sure that the wealthiest among us don't have to suffer the indignity of paying their fair share.
And now let the discussion of whether fair share is defined by dollars or percentage of income begin...
iris lilies
6-27-14, 1:36am
.... Which shouldn't be a surprise considering how much more real estate brokers make compared to teachers.
Median salary of middle school teachers in the St. Louis Public Schools
$44,800
http://www.indeed.com/salary/q-Middle-School-Teacher-l-St.-Louis,-MO.html
Starting salary of teachers in the St. Louis Public Schools:
$38,250
http://www.nctq.org/districtPolicy/contractDatabase/district.do?id=97
Median earnings of real estate agents
$39,140
http://money.usnews.com/careers/best-jobs/real-estate-agent
There's no difference. And don't get me started on the lobbying efforts of the NEA (don't you watch House of Cards!!!??? hahaha.)
Actually, I think it's a statement of K street's values. Obviously the real estate lobby is more powerful than the education lobby. Which shouldn't be a surprise considering how much more real estate brokers make compared to teachers.
I'd be fine with the flat tax structure as long as it was somewhat progressive. I make a good living. I don't expect minimum wage workers at Walmart to contribute an equal percentage of their paycheck to federal taxes that I do.
But good luck making a major change to the federal tax structure. Wall street's lobbyists will have a freak out at the idea that investment income should be taxed as much as earned income. Thanks again, K street! Always making sure that the wealthiest among us don't have to suffer the indignity of paying their fair share.
And now let the discussion of whether fair share is defined by dollars or percentage of income begin...
The "FIRE" group - Finance, Insurance and Real Estate - gives far more money to candidates and parties, mainly the Republican party, than any other group.
http://www.opensecrets.org/industries/
Really?? I can't imagine having such a small, cheap-interest mortgage that it isn't worth itemizing, but as you say, I live in Central Jersey, so...
I was surprised when we originally bought our house that the interest on the loan was not enough to outweigh the standard deduction. (Our house cost $127,000). There appeared to be no tax benefit whatsoever to owning a mortgage. I itemize every year on Turbo Tax. Every year the standard deduction wins.
I just used the standard deduction this year. It appears to have cost me about $100; I'm not sure it's worth it to save me forty-five minutes of time.
iris lily
6-28-14, 11:39am
I just used the standard deduction this year. It appears to have cost me about $100; I'm not sure it's worth it to save me forty-five minutes of time.
I know, I'm getting so that I hate the Health Savings Account paperwork. Sure, it's not incredibly time consuming and is easy, but it only seems to save us around $100. I asked DH if we could for go it this year but he said "nope" and he is the boss. :) About this stuff, anyway. His eye glasses are very expense and he changes out lenses or frames annually. That's predictable, and our dentist bills are predictable, so that's what we register in the HSA. Our health bills are incredibly cheap, especially when compared to our vet bills.
awakenedsoul
7-24-14, 12:34pm
Life is so Expensive for Young Adults These Days: I just talked with my neighbor this a.m. about her sons. They are in their early twenties. One just moved into an apt. with a friend. He's working in construction and paying his own bills. She seemed so relieved. He'd had some addiction problems last year and had spent time in jail. (There are a lot of drugs and dealing around here.) Her younger son, (twenty-one,) still lives at home. He works all night at Ralph's, stocking shelves. He goes to school at 9:30 a.m. He also has his own sound studio that he drives around and makes money that way. He's bought himself a Trans Am and several other cars that are parked in their front yard. I asked her if he's going to move out soon. He likes living at home. He makes good money, and buys these cars (to fix up) with it. She said that he has doubled his salary at Ralphs. He's a manager there. My hit on it was that he doesn't want to spend money on the stuff that isn't fun. (Insurance, deposits, rent, food, etc.) The people his age around here are living with their parents well into their late twenties. It's like a new culture.
Young Japanese women have had this lifestyle for a long time. Called "Parasite Single" and can be looked up on Wikipedia. Maybe it is just spreading?
Teacher Terry
7-24-14, 6:02pm
One thing that is different is that when young (age 60 now) there were many good paying manufacturing jobs that people could raise families on that had good health insurance for those that did not want to go to college. Now there are many crappy jobs even for college grads & many jobs w/o health insurance. The ACA is helping this some but still the deductibles are so high on some of these that people will not be able to use it anyways. While some young adults need the best of everything I know many that don't but are still struggling.
Good advice sweetana.
I think kids today are maybe not as patient because lots of things are immediate today. Everything happens quickly. I fear that the qualities of patience and delayed gratification aren't well known by the younger generation.
But there again, our culture has caused alot of that with immediate results for so many things.
I think this is definitely part of it. I see it in my 8 year old even.
I'm not so sure that things are that much more expensive than when I was 20. It's location dependent, and job dependent, for sure.
My first rentals out of college were a basement room in a house (no cable), then a shared apartment, then a studio (after 2.5 years). My first car was used and cheap. I almost never ate out, there weren't cell phones.
So in some sense, things are more expensive because their standards are higher. In some sense things are more expensive because of the toys. (cell phones).
And in some cases, it really is harder - salaries have not kept up with housing costs or college costs. A few of my coworkers have 20 something kids who have a hard time "making it", but mostly their kids aren't focused and haven't grown up yet. At 21 I was an officer in the military.
When I was graduating, I knew nobody who borrowed money to live while going to graduate school for a master's. They either went to school at night while working days, went days while working nights, or were on fellowship (engineering). ABout half of lawyers worked while in school. The exception was for med students.
ToomuchStuff
8-4-14, 10:19am
Nephew, at 22 just bought first home. That phone call, shut up a 25 year old I work with, who still is in the party mode, and thinks payments after the day they are due, aren't late, and buys everything on payments. IMHO, too many people, think their 20 something lifestyles, should match their parents, as soon as they are out of school. It's about choices and we can't make the right ones for them.
Well done to your nephew, he is already building a good financial base for himself.
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