Saddling kids with insane amounts of debt, education ("it's the good kind!") or otherwise, and then pricing housing out of reach for all but the luckiest of them isn't a great way to sustain a civilization.
> My younger sister, Sophie, isn't worried about retirement – but she's not exactly optimistic about it, either. "We've got climate change, war – it's like, are we even going to be here to retire?"
I see this belief in a lot of younger co-workers. Newsflash: You're highly likely to outlive your ability to work. If your plan is to die the day after you retire, that may happen, but in all likelihood you won't, and not having savings is going to end up unpleasantly for you. Save for retirement, people!
The article names many reasons why it isn’t so simple. None of those reasons are that Gen Z decided against saving money.
I do agree that opening with a quote about other larger issues may not have been helpful. It’s not like other generations didn’t have to worry about e.g. nuclear war. It’s really not the point though.
Hang on, what retirement? There's no social security, there's no potential to live on a fixed income, inflation has effectively restarted the clock on a lot of retirement plans. I'm not gen-z but I fully understand I will need to work as long as my heart beats. I say this -with- a retirement fund.
This also seems like a natural consequence of crazy inflation and outlandishly unaffordable house prices. When the target is out of reach, it's hard to motivate to even try.
Even with compound interest $100/mo is only going to yield retirement like savings over 40 years with >=10% interest rates and monthly compounding.
It also neglects the fact that the cost of retirement might be much higher when that time comes.
Your whole spend less argument ignores the whole point of the article. These disillusioned people aren’t going to spend less because they don’t think it’s going to pay off. They’re optimizing for happiness in the present moment and that might end up being the right choice.
> everyone can find an extra $50-100 monthly to stash away for retirement
And if you are extraordinarily lucky, perhaps you will get to keep it. More likely, some ordinary life obstacle will come along and wipe it out. When your car breaks down and you need to spend $1000 getting it running again so you can keep your job, are you going to leave that savings money alone, or are you going to spend it? Of course you are going to spend it, because the alternative would be going (further) into debt, and then you would have to spend the next 12 months paying off that debt instead of saving any more money. But in that 12 months, some other thing is bound to happen: perhaps you'll get sick, or you'll have to move and put down a new rental deposit, or any of the other million things that constantly knock people's lives off balance.
It takes multiple consecutive years of good luck before one can get to a position where your advice would be applicable.
> It takes multiple consecutive years of good luck
This is profoundly incorrect. A retirement account cannot easily be withdrawn from for starters... and if you're not using a tax sheltered retirement account (why? you can open one as an individual), then at a minimum having that money go into a second bank account is as simple as filing out a form with your employer. It's amazing how quickly the money will pile up if you just forget all about it.
People who honestly struggle to find $50 of unwisely-spent money per month are either very young or have spent a life messing up. It's really hard to not be able to save for retirement in the US over a 40+ year career. Like, you have to be going out of your way to make poor choices.
The people spending 40+ years making poor choices then turn around and expect everyone else to provide for them in retirement. The audacity is increadible...
Oh, well, have fun feeling superior, I suppose; your perspective is not going to help you understand why people who have not been quite so fortunate as you have tend to make the kinds of decisions that we do.
When you are young, saving anything, even $50-100 monthly ends up being significant for retirement. If you can get employer matching, it's even better.
Then, over a 40+ year career, you are wanting me to believe/accept that it isn't the individual's fault they are still living paycheck to paycheck and cannot save for retirement? Like I said, you have to try to not save at that point in your career. I don't know of a single career that earns a paycheck but doesn't offer retirement plans... I know lots of jobs that don't, but not careers. People working jobs for 40+ years are indeed messing up...
Saving for retirement is perhaps the easiest financial thing you will ever do. It requires filing out a form for your employer, and then you can forget about it if you want.
Instead, some people want to act helpless and then expect others to carry them in retirement. Seems fair...
Maybe try considering that $1200/yr towards retirement doesn’t provide much comfort when that doesn’t even cover a month’s worth of rent today.
It’s okay to admit that while you also had it hard, younger people have it much, much harder. This shouldn’t be surprising. Home ownership is completely off the table if all that can be spared is $1200/yr.
Do you even look at the price tag of bananas when you buy them? Consider perhaps that the date of your birth has more impact than your rugged sacrifice and work ethic. I see plenty of both of those things in my zoomer friends and it doesn’t make rent more affordable.
I’ll add for transparency that I make a very comfortable six figure salary at an old, stable software company you’ve likely heard of. I stay in my amenity-less apartment because the rent is low enough to keep the shaky dream of home ownership alive. I even have pretty generous RSUs. I am extremely lucky. Even still, without ~equal partnership and shared ownership with someone roughly as wealthy as me, I couldn’t afford to own a home in the neighbourhood I grew up in. I’m 29 years old and have been making this much for three years. There aren’t many jobs that pay better than this.
Spare me your financial advice and think of people who make less than a third of what I make who grew up next to me. Some of them work good union blue collar jobs that your parents would have respected. Everything has outpaced wage growth. Everything.
It's $1200 a year for the first year or so, then it's more and more over a 40 year career. I don't understand why this is a difficult concept to grasp - your income increases as you develop your career... and so does your retirement contributions.
This fictitious person who can't scrape together $100 a month for retirement but has worked for 5, 10, 20+ years is a complete myth, or a total failure on a personal level.
> everyone can find an extra $50-100 monthly to stash away for retirement. With compound interest over a 40+ year working career, this is not trivial money.
This amount of money is likely to pay for a couple of surgeries (assuming no other complications or chronic illnesses eating your savings before then) past the age of 50, given how expensive health care is.
It's not a significant amount of money to let you retire in any kind of comfort. Maybe just not starve.
No amount of financial prudence is going to change the math for you if your set of skills caps out at $20/hour on the employment market.
> No amount of financial prudence is going to change the math for you if your set of skills caps out at $20/hour on the employment market
Which is a significant issue. How is it even possible to spend 40+ years doing something (anything) and not acquire skills that earn more than minimum wage or barely above?
40 years is approximately 83,200 working hours. Metaphoric you had 83,200 hours to figure out some sort of skill and work your way up in whatever field you have chosen... but you chose not to. That's a significant issue.
The salary only depends on what you look like or who you know, not what you do. If you're a beautiful chef and can avoid rapists bosses, you can work on a yacht for 2-4 times as much as a chef in an average restaurant and only work three month a year, studying the 9 other months (someone I know is in M1 doing this). If you're a normal chef (or even working at a starred restaurant you don't own), good luck getting the opportunity. And you'll have destroyed ankles, back and feet by the time you're 35 (incidentally, I do not know any second or 'chef de partie' (don't find the translation) over 30yo).
This is slightly less true for tech work though. If they don't have a cure for carpel tunnel syndrome by 2050, I'll retire I guess - but why should I when tech is so lucrative if it still somehow looks like how it does today?
Everyone seems in such a rush to stop earning money. Maybe be in a rush to get a "rest and vest" job instead? I plan to be some senior director at the 2050 equivalent of a sleepy and comfy giant company like IBM or Salesforce. By the time they realize I've stopped delivering value half a decade ago and lay me off, I'm already old enough to get the maximum possible monthly social security benefits AND will have prolonged my tech wealth earnings, likely with a house which is hopefully paid off. And I haven't even mentioned the golden parachute of long term severance packages!
I get it if you're doing back breaking work, but this is HN! Most of the folks here have nothing more to worry about except eye strain/blindness, deafness, and carpel tunnel.
It's probably worse in tech, due to the rampant age discrimination that's been normalized in this industry. Your plan to become "some senior director" is probably the only way to remain employed at a tech company in your 60s, 70s, 80s, or 90s. Good luck doing that as an individual programmer or low-level manager.
> It's probably worse in tech, due to the rampant age discrimination that's been normalized in this industry.
I haven't worked many places, but I have a feeling that working for a company that has tech but doesn't identify as a tech company is probably the way to go. Also stay the hell away from the Bay Area.
Tech company culture seems so dysfunctional (e.g. the normalized age discrimination, etc.).
I can't tell if this comment is sarcastic or not, but in case it's not, I think the reason people are in a "rush to stop earning money" is that they have things they like to do more than work and they want to maximize their time spent doing those things.
When you're spending almost everything on food, rent, and healthcare surviving till tomorrow is a much bigger issue than figuring out what to do 20-50 years from now. Late stage capitalism is doing a good job of sucking up excess money and returning it to the investor class via rents, if you're not in the infestor class then you are struggling.
It is true, and that’s why I dislike the top line metrics. The stock market is doing great! Unemployment is low! GDP is up!
But the hidden assumption, that these metrics would be coupled with second-order metrics like life expectancy, home ownership, health, and well-being? That no longer holds.
These consequences today are all the results of political decisions made decades ago. The unfortunate reality is that turning this ship around will also take decades.
Social media is definitely making information about inequality more accessible. But that doesn’t mean the underlying issues aren’t real. It would be a mistake to dismiss economic anxieties as just a trendy social media thing. Owning a house isn’t just “trendy”, it’s been part of the American dream that has steadily become out of reach.
Thanks for the downvote and missing the point. I decided to read the article and was largely responding to the following:
>"I'm a Gen X-er," says Beal. "We lived to work. Generation Z works to live. They work to enjoy life, to experience life, to travel. They have a completely different mindset
Which is more a point about the current culture than about the state of economy.
> including falling wages and a challenging real estate market in which rent increases outpace earnings.
> Around the globe, the eldest Gen Z-ers are heading into their late-20s amid undeniable economic headwinds.
> Financial wellness company Brightplan's 2024 Wellness Barometer Survey of 1,400 US-based knowledge workers at global companies found that a majority, regardless of age, report feeling stressed about their financial situation, citing high inflation, rising interest rates and market volatility as complicating factors.
Yup, you are definitely an idiot. You are quoting the economic situation and I am quoting the attitude towards money. What is the problem? You can a make a point about culture and economics in the same article.
Literally read a sentence beyond what I quoted.
>"I'm just living life, but that's how everyone is," she tells me over the phone, noting that most of her friends are enjoying their early 20s without too much regard for the future.
How hard is it to engage in a point rather than trying to prove that I somehow didn't read the article?
My retirement plan is what everyone else in the rest of the world does: I plan on providing free childcare to my kids when I'm unable to work so they can work and save money.
I'll sleep on a couch and call it a day. That's the best retirement anyone can ask for.
I still set aside 10% for retirement though. Maybe I'll get lucky but even I doubt it'll amount to anything.
>I get so tired of seeing content saying, 'Oh, if you just saved a little more, if you just invested a little more…' Like, no – people are on the edge. People cannot afford to live, to eat, to put gas in their cars," Brama says.
>That's partly why Brama now splits her time between the United States and Europe
I wish I was broke enough to split time between two continents.
"There is a leisure class at both ends of the economic spectrum."
But even setting that aside, the article goes on to mention Albania (low CoL) and access to healthcare. The latter, in particular, checks out. I have great insurance, but my out-of-pocket max equals somewhere between 5 and 10 round-trips to Europe. It's not hard to imagine there exist people who can setup the circumstances such that working in the USA part of the year and living somewhere else part of the year is massively more economical than staying in the USA.
Actually, doesn't that exact situation describe a huge fraction of the US agricultural labor force?
For reference, I calculated that for the same per-day cost as I have in the US I could live in a five star hotel in Thailand. And when you factor in the cost of rent, international flights aren’t as expensive as you might think.
I see this less as how inexpensive things are elsewhere and more how excessively expensive they are in the US. In the Bay Area for example the housing stock is incredibly expensive but relatively low quality even compared with other US cities.
Travel is cheap if you don't have to pay for accommodation. Flying a few times a year between Europe and the US is definitely cheaper than renting in the US.
Maybe the quality of life is better elsewhere. Maybe the differences in daily costs of living are enough to offset the flights. The article mentions Albania, where the nominal/PPP GDP figures suggest that prices are almost 3x lower than in the US.
As a late gen-X'er (I feel I have far more in common with millenials than my 12 years older brother, also gen-X), I think it actually is really interesting to see how some millenials and moreso gen Z see their financial problems as intractable.
The actual reality is that every generation has complained about crippling prices when they're in their 20s, especially property, only to find that as they get older their salaries eventually rise and then they start earning over the median salary, they find they're actually in a good place.
Personally, I couldn't afford to get on the property ladder until I was 28, and I've always been a big saver. Just before I actually bought my house, there was a massive property price boom in the UK - 18 months earlier I'd looked at a house on the same road as the house I eventually bought, with a loft conversion (extra room) and in better condition. The house I bought 18 months after viewing this one (and deciding I couldn't really afford it) was 50% more, and my salary was exactly the same 18 months later. In fact, I could only afford it because the bank was running an offer on its graduate accounts that allowed a 4x mortgage instead of the standard 3x. In that brief moment of eligibility for that mortgage, I went for it, despite knowing that it'd be even more financially burdensome than the much cheaper house I'd decided against on financial grounds.
As it turned out, I ended up buying at the peak of the market, and the value of the house remained stagnant for 10 years. Along the way, I had other setbacks, like getting a 5 year fixed rate mortgage for 5.5% three months before the Bank of England dropped rates down to 0.25%, but the exit penalties were so high I had no choice but to suck it up.
But the thing is, even though the value of the house didn't change for 10 years, my salary did. What seemed impossible right up to the point of stretching myself to the limit and committing to the mortgage, a few years later was tolerable (although I didn't change my spending habits, instead I overpaid my mortgage as much as I could because of the high interest rate and terrible savings rates), and after 10 years, everything was very comfortable because I'd had 10 years of inflation in my income, but my minimum mortgage payments were still roughly the same. Finally, after overpaying like crazy, I paid off my mortgage after 18 years into the 25 year term. Now it's all paid off, my life is definitely on easy mode, but I do feel somewhat aggrieved when a gen-Z'er says "oh, you're just the generation that had money", because I sure as hell didn't have any money at the start of my working life - it took ploughing everything I had into savings, and then into the mortgage for the house to make that happen.
So, what can a gen-Z'er take away from this? They could just say "yeah, it's too hard" and just give up. Sadly, I think a lot of them do think that way. Or they could think, "life is hard, I need to save hard". Sooner or later, the opportunity will come - house prices are cyclical, sometimes they go up in value at insane rates, other times they stay about the same for years. But to take the advantage of the opportunity when your salary is relatively high and the house prices are relatively low, you need to have made some savings in the meantime. If you give up too soon, you're guaranteed to hit the failure state. If you persevere saving, even a little, sooner or later, there will be an opportunity for you to seize.
I know for some people, it's going to be impossible - if you are genuinely living pay cheque to pay cheque, it's tough. The smallest thing can completely ruin you. That's why it's even more important to save what little you can, whenever you can. That £5 coffee, even as a once-a-week weekly treat, is £250 a year of missed savings opportunity. That £10 netflix subscription, £500 per year. That £50 on alcohol going out on a Friday night, £2500. I know these latter comments will sound ridiculous to people who are genuinely spending everything they earn just to get by, and I'm sorry if this sounds flippant, but equally there are gen-Z'ers complaining they will never afford a house who can afford to pay abroad for a "holiday experience" because they're "living in the now" or some nonsense. Those people could easily save up the deposit they need for a house if it was genuinely a priority for them. Maybe it'd take 5 years until the market conditions work in their favour, but the point is not to give up because you think life is unfair. It's been just as unfair to almost everyone in the past too. You need to just get on with it and press on through.
As an example of what it is to live a frugal lifestyle, I currently spend about £700 per month on council tax, utility bills, food and entertainment. In the last 2 years, I've spent about £4000 on travel and holidays. If I hadn't already paid off my mortgage, I could rent somewhere for about £700 per month. That comes in at about £1600 per month, so my equivalent income to sustain this lifestyle is £21000 per year. That's far below the median UK salary, but it's easily achievable because I choose not to go out drinking very often (around once a month, £15-£20 for the evening), I don't have lots of TV subscriptions, I just have a single subscription to a video-on-demand service that's £35 per year. I have the money to spend much more if I wanted, but my priority is still saving - only now it's for retirement.
That is surprisingly low. Here in the US it is over $1300/£1000. Rent has increased 20% since 2020 due to collusion among landlords, among other things.
Rent/housing is such a big part of monthly expenses that it doesn’t even matter whether you have subscriptions or not. Savings from cancelling your Netflix will quickly be eaten up by any small increase in rent. These are changes caused by large-scale political decisions, not personal moral failings of vast numbers of consumers.
Replying separately from my other reply, because I think this is a totally different issue and actually gets to the core of the issue in the article.
> Rent has increased ... due to collusion among landlords, among other things.
> ... is such a big part of monthly expenses that it doesn’t even matter whether you have subscriptions or not. ... These are changes caused by large-scale political decisions, not personal moral failings of vast numbers of consumers.
To me, both these statements are indicative of passivity and lack of agency about the situation that exemplifies the Gen Z mindset towards money. The first attempts to blame someone or something else for the high rents, which doesn't achieve anything apart from increasing the feeling that life is unfair. This mindset doesn't allow a way to break out, because it relinquishes agency over the situation to someone else.
The second has so much to unpack - it's pointless even trying to spend less; it's the government's fault; lots of others are in the same boat; trying to help someone to save is pointing out their personal moral failings. But none of these things are actually true.
It's not a personal moral failing to be short of money. Arguably, there'd be a case to be made if someone was gambling thousands of dollars away every month while their kids starved. If you're just working a job, struggling to make ends meet and having to live pay cheque to pay cheque, that's not a moral failing, that's making the best of a bad situation. People in that situation usually have already cut out all unnecessary spending, because they've often had to make the choice between things they actually need and had to do without something they actually need. There are still ways out in that situation, and sadly the easiest to say and the hardest to actually do is just to leave the situation, move somewhere cheaper to live and try to start again.
That isn't what the article is about though, it's about how Gen Z is nihilistic towards money. How does someone who does have a decent income, but chooses to spend it on a fun lifestyle, on experiences, etc. respond to the statement "if you make your life a little less pleasant now by giving up X, then you can save that money and make your future life better"? I can totally understand why people don't want to give up X - they obviously want to keep life with its current level of pleasantness, so then it comes down to priorities - what is really more important to an individual? For example, a cup of coffee every day for a year, or no cup of coffee each day and having a a month's rent in savings at the end of the year so e.g. a random car breakdown doesn't stop you paying rent? Maybe after a month of skipping the coffee and seeing that it wasn't that hard after all and seeing the difference in the bank, they might then consider not having lunch out every day, instead taking in sandwiches 4 days a week. Maybe they might consider whether they really need Amazon Prime instead of just waiting 3 days and using the free shipping. But I think most of them won't, and that's the point of the article. Most Gen-Z'ers don't prioritise the savings and the future reward, because they want the short term experiences and happiness. More than that, their peers all agree that it's not their fault, they're powerless to do anything about the situation, they could never hope to ever save up the deposit for a house, and so they might as well not even try. It's this mindset that's depriving them of their own agency, not the government, not previous generations, not anyone else.
We can say it’s a mindset issue or that Gen Z needs to take more personal responsibility for their financial situation, but that essentially ignores all of the facts on the ground that are the results of trends and political decisions that happened before they were born. It isn’t their fault that things have become so expensive. It’s the fault of the profit maximizing companies that control the economy, and a political class that has allowed these problems to fester.
It used to be possible in America to buy a house and raise a family with free education. This is no longer possible. It was a choice to only zone for single family housing. It was a choice to cut state funding for universities which has led to unsustainable tuition bloat. It was a choice to allow companies to ship jobs overseas for pennies on the dollar. All of these choices reallocated money from younger, poorer people to wealthier, older people.
> It isn’t their fault ... It’s the fault of ...
> It used to be possible ... This is no longer possible.
These statements are the very essence of the nihilism in the article.
It doesn't matter if a situation is less advantageous to you than it was to someone 10, 20, or 50 years ago, or why the situation has changed. What matters is how you can best deal with the situation you find yourself in now.
Giving up, saying it's too hard so there's no point trying, blaming someone else all have the same outcome - nothing will change.
To use a card analogy: maybe you haven't been dealt the best cards in life, but if you fold every hand, you're never going to win. But if everyone else has terrible cards too, you can easily win with a bad hand if you play to your strengths.
I won’t disagree there are more and less productive mindsets you can have about your situation. But mindset isn’t everything. You can choose to have a productive mindset while understanding the political choices that were made. And that is important because we can make political choices to fix the problems that have been caused. You can’t just grind your way out of neoliberalism.
Your card analogy hides the fact that your cards weren’t dealt randomly. Opportunity isn’t evenly distributed. The cards were deliberately chosen. Politicians chose winners and losers when they rewrote the tax code to reward capital over labor, make it easier to ship your job overseas, cut funding for education, and now allow companies to buy up a quarter of new housing. And the only way those trends get reversed is if people become more aware of it, not less.
Yeah, the UK is generally much cheaper than the US (at least the bigger cities). I also live in a fairly cheap city, where rents are about 3/4 of the rents of the next city along and probably half that of most of London.
I actually just checked spareroom.co.uk and you can get a double in a shared house for a bit under £500 in my area. I only found one flat for rent (smaller than my house, but closer to the city) and that was £750. Prices in London are a lot higher. A few years ago, a double room outside central London was at least £700, and at least £1200 for inside Zone 1.
> Savings from cancelling your Netflix will quickly be eaten up by any small increase in rent. These are changes caused by large-scale political decisions, not personal moral failings of vast numbers of consumers.
To be clear, I'm not saying having a Netflix subscription is a personal moral failing. I'm just saying, not having it is an easy way to save £120 a year. Most people actually have a lot of discretionary spending, all of which seem small on their own, but when considered as a whole become a large chunk of expenditure.
Money should be no object, I just worry that this is the result of a generation coming of age in the tightest labor market in a half century and they're all in for an extremely rude awakening over the next couple years.
Maybe that's the idea.