Financial Planning for Millennials

[Smoove_B]

Seems like as good a place as any - The Number 1 living arrangement today for Americans in the 18-to-34 age bracket, according to the Census Bureau, is to "reside without a spouse in their parents’ home, from the this study.

With the exceptions of California and Mississippi, the Top Ten states with the highest percentages of 18-to-34 year olds living with their parents were concentrated along the Atlantic coast. (See chart below). They included: New Jersey (46.9%), Connecticut (41.6%), New York (40.6%) Maryland (38.5%), Florida (38.3%), California (38.1%), Rhode Island (37.1%), Pennsylvania (37.1%), Massachusetts (37.0%) and Mississippi (36.8%).

This was the other shocker:

Young people are delaying marriage, but most still eventually tie the knot. In the 1970s, 8 in 10 people married by the time they turned 30. Today, not until the age of 45 have 8 in 10 people married.

[em2nought]

I love how kids think theirs is the first generation to think of something.

You know when I learned that there was nothing new under the sun? When I was 7.

The other disappointing life lesson is that things change, just because you make an 18% return on your money market in 1983 doesn't mean banks won't start thinking about negative interest in 2017.

[Chrisoc13]

These threads are insufferable. All us lazy millennials will be sure to get off your lawns.

Every generation thinks the generations after them are lazy it seems. Which is especially funny when you realize those complaining are the ones who helped raise them.

I think I'll get ahead of the game and start telling my son how lazy his generation is even though he's just 1.

[Zarathud]

At 1 year, your son is lazy! Those diapers don't change themselves.

Some of this comes from the older generations projecting their own hopes and dreams. Kids don't force their parents to let them move back in, so that's a two-way street. But it is more acceptable now to move back in with the parents, when it once was a sign of failure to launch.

[Chrisoc13]

At 1 year, your son is lazy! Those diapers don't change themselves.

Some of this comes from the older generations projecting their own hopes and dreams. Kids don't force their parents to let them move back in, so that's a two-way street. But it is more acceptable now to move back in with the parents, when it once was a sign of failure to launch.

But for how long was it a sign of failure to launch? That's also a rather modern change, and honestly moving away from family is a result of modern prosperity.

Granted I've never moved back home other than for summers in college but I really don't see it as a bad thing if someone does. It's not my style but it doesn't make them lazy, despite the whining and gnashing of teeth of the baby boomers and gen xers (the generations who are letting their kids love back in btw).

We've hashed this out before but I'm a millennial by date and I know very few people who are failure to launch. Basically just my lazy older brother. None of my friends or other siblings would I describe as lazy or entitled. Of course that could be just who I've chosen to associate with. And of course I also think asking for a reservation at a restaurant is reasonable and not lazy because I value my time but hey... Maybe that makes me entitled if we're seeing the bar that low.

Mostly it's funny to see the hypocrisy and idiocy in complaining constantly about younger generations.

[pr0ner]

Seems like as good a place as any - The Number 1 living arrangement today for Americans in the 18-to-34 age bracket, according to the Census Bureau, is to "reside without a spouse in their parents’ home, from the this study.

With the exceptions of California and Mississippi, the Top Ten states with the highest percentages of 18-to-34 year olds living with their parents were concentrated along the Atlantic coast. (See chart below). They included: New Jersey (46.9%), Connecticut (41.6%), New York (40.6%) Maryland (38.5%), Florida (38.3%), California (38.1%), Rhode Island (37.1%), Pennsylvania (37.1%), Massachusetts (37.0%) and Mississippi (36.8%).

This was the other shocker:

Young people are delaying marriage, but most still eventually tie the knot. In the 1970s, 8 in 10 people married by the time they turned 30. Today, not until the age of 45 have 8 in 10 people married.

This doesn't surprise me.

Going back to the original article in this thread, in the DC area, it seems like everyone is more interested in traveling than anything else. It's all about "how many passport stamps can I obtain this year?" than anything else. I don't get how they can afford that lifestyle, while living in the DC area, and actually have any sort of savings for the future.

[Isgrimnur]

They're probably not worried about that last point.

[pr0ner]

They're probably not worried about that last point.

That's true, but I couldn't imagine living that way without saving a bunch of money first.

[Smoove_B]

That's true, but I couldn't imagine living that way without saving a bunch of money first.

That's because you're not a lazy millennial.

[pr0ner]

That's true, but I couldn't imagine living that way without saving a bunch of money first.

That's because you're not a lazy millennial.

Heh. I'm barely a millennial (depending on who you ask), but lazy I am not.

[LordMortis]

If I could do it all again, I'd travel more when I was younger and stave off the future to live more when I was young and invulnerable.

I do wonder how they do it. I worked my ass off all through college living with my parents and I had nothing to show for it. Budgeting in for travel would have been impossible. It was hard enough to budget another beater and insurance to get through another semester.

I also know that if I were a parent of a 20 something at this juncture, I'd could in no way afford to give them a life of leisure so they wouldn't have to work their asses to not be able to afford to travel and enjoy live more.

If you can live that life, more power to you! However, you get about zero sympathy from me for racking up college debt. Aside from that, I wish could have done the same. There is nothing I would have liked more than to have drank more beer, seen more shows, and seen more of the world when I had fortitude to do it. I should have lived with mom and dad longer and that they afforded me that invitation, I was just too young and stupid to take them up on their insistence.

[Chrisoc13]

One problem with travel is a lot of older generations think of travel as a luxury at high cost. But in my experience they have traveled differently than I travel.

My wife and I travel extensively even all through college and grad school and professional school. The trick is travel doesn't actually have to be that expensive. The first time I went to Europe I spent around $50 a day is all. I was alone for that trip for over a month. Total cost just isn't that much. My wife and I went back for an entire summer spending a little over $100 a day. It's actually pretty easy to travel cheaply AND have a great time and really enjoy the places you go. We spent 2 weeks in costa Rica and Panama shortly after we got married for under $2000 total including flights. Cheap and great travel is certainly doable. It's all about priorities. For my wife and I we choose experiences over stuff. It's just that simple for us. And I think most people can choose to travel cheap. Now by contrast my sister talked us into a cruise next January (I hate cruises) and that 5 day trip is going to cost as much as a trip we are planning to Portugal, Spain, and Morocco later in the year. And cruises are not that crazy expensive, it's just that overall you can get even cheaper still and be in control of what you do.

It's not a competition thing in terms of having more passport stamps. I actually just really enjoy seeing the world and always try to have a trip on the horizon. It's one of my favorite things to do. I think for my generation that's a common sentiment.

In terms of shirking responsibilities to do so, I don't think that's actually always true. My wife and I both paid for our own college education, grad school and professional school. We have paid for everything in our lives since around 20 including paying for our own health insurance and car insurance that whole time. Heck we haven't even ever been on a family cell plan. We have modest savings, zero consumer debt, and invest in retirement funds. The funds for travel come from cutting other things out of life. My car is twelve years old, we don't have cable, etc. It's about priorities and staying on a real budget. But if travel is a priority doing so doesn't mean being financially irresponsible. But I've had many older people assume as much when they learn how frequently we travel.

[Smutly]

One problem with travel is a lot of older generations think of travel as a luxury at high cost. But in my experience they have traveled differently than I travel.

My wife and I travel extensively even all through college and grad school and professional school. The trick is travel doesn't actually have to be that expensive. The first time I went to Europe I spent around $50 a day is all. I was alone for that trip for over a month. Total cost just isn't that much. My wife and I went back for an entire summer spending a little over $100 a day. It's actually pretty easy to travel cheaply AND have a great time and really enjoy the places you go. We spent 2 weeks in costa Rica and Panama shortly after we got married for under $2000 total including flights. Cheap and great travel is certainly doable. It's all about priorities. For my wife and I we choose experiences over stuff. It's just that simple for us. And I think most people can choose to travel cheap. Now by contrast my sister talked us into a cruise next January (I hate cruises) and that 5 day trip is going to cost as much as a trip we are planning to Portugal, Spain, and Morocco later in the year. And cruises are not that crazy expensive, it's just that overall you can get even cheaper still and be in control of what you do.

It's not a competition thing in terms of having more passport stamps. I actually just really enjoy seeing the world and always try to have a trip on the horizon. It's one of my favorite things to do. I think for my generation that's a common sentiment.

In terms of shirking responsibilities to do so, I don't think that's actually always true. My wife and I both paid for our own college education, grad school and professional school. We have paid for everything in our lives since around 20 including paying for our own health insurance and car insurance that whole time. Heck we haven't even ever been on a family cell plan. We have modest savings, zero consumer debt, and invest in retirement funds. The funds for travel come from cutting other things out of life. My car is twelve years old, we don't have cable, etc. It's about priorities and staying on a real budget. But if travel is a priority doing so doesn't mean being financially irresponsible. But I've had many older people assume as much when they learn how frequently we travel.

Point of order. Your reality is a result of prioritizing what is important and living within your means. I've found the vast majority of people do not do this through life -- more importantly, they're not interested in you rubbing that in their faces, responsible person.



Rick Steves agrees with your assessment of the cost of travel.

[Chrisoc13]

Not trying to rub anything in people's faces, just pointing out lots of travel does not equal being financially irresponsible. It's a common sentiment people have about those who travel. It's shown up in this very thread, hence my post.

On a broader view I don't think millennials are any more financially irresponsible than any other generation. Millennials didn't bring us the lovely housing bubble crisis, and certainly with your average American being in fairly extensive consumer debt it's a little funny to see older generations taking on millennials when they certainly as a generation haven't exactly had their crap together either. People are people. Some people are responsible. Some are not. It matters not what generation they are from.

Also I must admit I regularly listen to Rick Steves' podcast. The guy is a huge dork, but I'm a fan.

[gilraen]

One problem with travel is a lot of older generations think of travel as a luxury at high cost. But in my experience they have traveled differently than I travel.

Nothing to do with high cost, especially in the age of AirBnB and networks of hostels. These days, a young person, especially someone in the last years of college or straight out of college, is unlikely to get a first job with hours flexible enough to take a long vacation and go traveling. So if they choose to travel in the summer, that pretty much equates to them not getting a job/internship to promote their future job prospects in their field. Especially for someone who's not going into a field that's highly in demand, taking a summer off to travel may very well translate into their career stalling for a year or two. And in a year, they get to complete with the next pool of college graduates, that were more motivated than them.

[malchior]

It also doesn't help that millenials are earning 20% less than the generation before them at similar stages in their careers. They aren't living at home because they are irresponsible. They simply can't afford to do it. It is no shock that NJ and NY top the list of kids living at home. They are high cost areas to live. And these folks have more student loan debt on top of that burden.

[Kraken]

Also I must admit I regularly listen to Rick Steves' podcast. The guy is a huge dork, but I'm a fan.

Steves was our guru when we did a 2-week tour of Europe in the early '90s. We took Eurail and local subways everywhere and stayed in budget hotels. I still have -- and still use -- my Rick Steves travel bag. Lost interest in him when he went through his "traveling with small children" phase.

Spoiler:

It sucks, but it's possible.

Now that we're in our 60s I don't think we could be quite so footloose, so I'm glad we did it when we were young enough.

[Chrisoc13]

One problem with travel is a lot of older generations think of travel as a luxury at high cost. But in my experience they have traveled differently than I travel.

Nothing to do with high cost, especially in the age of AirBnB and networks of hostels. These days, a young person, especially someone in the last years of college or straight out of college, is unlikely to get a first job with hours flexible enough to take a long vacation and go traveling. So if they choose to travel in the summer, that pretty much equates to them not getting a job/internship to promote their future job prospects in their field. Especially for someone who's not going into a field that's highly in demand, taking a summer off to travel may very well translate into their career stalling for a year or two. And in a year, they get to complete with the next pool of college graduates, that were more motivated than them.

Meh there's always a reason young people shouldn't travel in other people's eyes I guess. But... yeah there are plenty of ways to make it work, even with inflexible jobs and competitive fields. Again I'm speaking from personal experience here but anyways...

Also I must admit I regularly listen to Rick Steves' podcast. The guy is a huge dork, but I'm a fan.

Steves was our guru when we did a 2-week tour of Europe in the early '90s. We took Eurail and local subways everywhere and stayed in budget hotels. I still have -- and still use -- my Rick Steves travel bag. Lost interest in him when he went through his "traveling with small children" phase.

Spoiler:

It sucks, but it's possible.

Now that we're in our 60s I don't think we could be quite so footloose, so I'm glad we did it when we were young enough.

We're in the travelling with small children right now... it's certainly very different, but we're finding it enjoyable, just in a very different way. My brother does a great Rick Steves impression that I must admit is a pretty good impression. My brother can't stand him

[Kraken]

One problem with travel is a lot of older generations think of travel as a luxury at high cost. But in my experience they have traveled differently than I travel.

Nothing to do with high cost, especially in the age of AirBnB and networks of hostels. These days, a young person, especially someone in the last years of college or straight out of college, is unlikely to get a first job with hours flexible enough to take a long vacation and go traveling. So if they choose to travel in the summer, that pretty much equates to them not getting a job/internship to promote their future job prospects in their field. Especially for someone who's not going into a field that's highly in demand, taking a summer off to travel may very well translate into their career stalling for a year or two. And in a year, they get to complete with the next pool of college graduates, that were more motivated than them.

Meh there's always a reason young people shouldn't travel in other people's eyes I guess. But... yeah there are plenty of ways to make it work, even with inflexible jobs and competitive fields. Again I'm speaking from personal experience here but anyways...

Also I must admit I regularly listen to Rick Steves' podcast. The guy is a huge dork, but I'm a fan.

Steves was our guru when we did a 2-week tour of Europe in the early '90s. We took Eurail and local subways everywhere and stayed in budget hotels. I still have -- and still use -- my Rick Steves travel bag. Lost interest in him when he went through his "traveling with small children" phase.

Spoiler:

It sucks, but it's possible.

Now that we're in our 60s I don't think we could be quite so footloose, so I'm glad we did it when we were young enough.

We're in the travelling with small children right now... it's certainly very different, but we're finding it enjoyable, just in a very different way. My brother does a great Rick Steves impression that I must admit is a pretty good impression. My brother can't stand him

Steves' PBS series "Europe Through the Back Door" was before he had kids, when he was a real boho (you know he's a big advocate for legal weed too, right?). His later shows traveling with kids lacked that devil-may-care adventurous attitude -- no more bohemian lifestyle for you!

We actually looked into youth hostels when we traveled, but we were already a few years over the cutoff age for that. We did base our itinerary on his show, though.

Anyway, I approve of traveling while you're young enough to enjoy and afford it, because the older you get, the harder and more expensive it becomes.

[Chrisoc13]

Yeah we actually have all his shows on DVD and it's funny to watch his transition. Still loves that fanny pack though.

[Smutly]

I'm a Rick Steves fan too, although I haven't followed him for a while. I own some of his books and have visited some of the locations he espoused. I didn't travel overseas until my early 30s, though, so didn't do the hostel thing. I have enjoyed watching his travels.

[DOS=HIGH]

One problem with travel is a lot of older generations think of travel as a luxury at high cost. But in my experience they have traveled differently than I travel.

Nothing to do with high cost, especially in the age of AirBnB and networks of hostels. These days, a young person, especially someone in the last years of college or straight out of college, is unlikely to get a first job with hours flexible enough to take a long vacation and go traveling. So if they choose to travel in the summer, that pretty much equates to them not getting a job/internship to promote their future job prospects in their field. Especially for someone who's not going into a field that's highly in demand, taking a summer off to travel may very well translate into their career stalling for a year or two. And in a year, they get to complete with the next pool of college graduates, that were more motivated than them.

Never met someone who took time off after college to travel and regretted it. If taking a year off, let alone a few months, to travel when you're in your 20's ruins your long term career or finances then you're doomed anyway.

[Chrisoc13]

One problem with travel is a lot of older generations think of travel as a luxury at high cost. But in my experience they have traveled differently than I travel.

Nothing to do with high cost, especially in the age of AirBnB and networks of hostels. These days, a young person, especially someone in the last years of college or straight out of college, is unlikely to get a first job with hours flexible enough to take a long vacation and go traveling. So if they choose to travel in the summer, that pretty much equates to them not getting a job/internship to promote their future job prospects in their field. Especially for someone who's not going into a field that's highly in demand, taking a summer off to travel may very well translate into their career stalling for a year or two. And in a year, they get to complete with the next pool of college graduates, that were more motivated than them.

Never met someone who took time off after college to travel and regretted it. If taking a year off, let alone a few months, to travel when you're in your 20's ruins your long term career or finances then you're doomed anyway.

Yeah I didn't want to start a whole thing but I completely agree.

And on top of that while long trips are awesome there a lot of short trips that are well worth doing too. Not all extensive travel has to be in life altering blocks.

[RunningMn9]

Life is meant to be lived, not worked. As long as a given individual understands any consequences to their path, and accepts them - who am I to judge?

The world is an interesting place. Way more interesting than the 3.5 walls they'll get to see in a cubicle farm when they get back.

Edit to add: I had obligations right out of college (was getting married that summer), so right into the workforce it was for me. I never particularly regretted not taking a break to travel though. I traveled around the US enough for work over the years. And eventually I got to take two 10-day trips to Scotland with friends to play golf and drink whisky. I couldn't have done those trips in my early 20s. I mean, I could have gone to Scotland of course, but I wouldn't have been dropping hundreds of pounds per round to play golf, or renting our own castle for $2200 a night. And that was the kind of trip that I would have wanted. Of course, had I traveled in my 20s, nothing would have stopped me from also traveling later in life as well.

But as a rule, the sorts of trips that I want to take cost money. So it made more sense to do them when I was older, and had money.