Gen Z Americans Don't Have Enough Saved To Cover a Single Month of Spending (fortune.com) 85
An anonymous reader quotes a report from Fortune: Younger Americans don't have enough saved to cover a single month of spending, showcasing their vulnerability should the economy head into a downturn. Members of the Gen Z generation -- people born after 1995 -- were spending twice the amount they had in savings on average in February, according to Bank of America Institute analysis of internal account and card data released Friday. The ratio has increased in the past two years, and is much higher than for other generations. In part that's because Gen Z consumers, many of whom still hold entry-level positions and make less than their older peers, tend to spend a bigger share of their incomes on necessities including rent and utilities. But they're also more likely to shell out on discretionary categories like travel and entertainment. Spending in non-essentials among that cohort is up more than 25% from a year ago -- substantially above the overall rate.
While the report noted that Gen Z workers are still garnering robust pay gains compared to older groups, it showcases a point of vulnerability as households' views of the economy dim. [...] The Bank of America report also pointed to a worsening labor market for younger Americans. The number of Gen Z households receiving unemployment benefits rose by nearly a third in the past year -- the most of any generation. It also noted that, with underemployment on the rise, that could have long-term career effects for that cohort.
While the report noted that Gen Z workers are still garnering robust pay gains compared to older groups, it showcases a point of vulnerability as households' views of the economy dim. [...] The Bank of America report also pointed to a worsening labor market for younger Americans. The number of Gen Z households receiving unemployment benefits rose by nearly a third in the past year -- the most of any generation. It also noted that, with underemployment on the rise, that could have long-term career effects for that cohort.
Wrong target (Score:5, Insightful)
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it always amazed me that putting guacamole on bread somehow became a symbol of extravagance
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it always amazed me that putting guacamole on bread somehow became a symbol of extravagance
Well, thanks to Trump's tariffs, it actually is one now.
It's because it came from Australia (Score:2, Interesting)
Remember all that brouhaha over Bud light? The reason that blew
The problem is the left wing lacks (Score:2)
This means they can't effectively use violence. And when they try to they end up adopting a command structure and then turning right wing. It happens every time. Both China & Russia had left wing revolutions that ended in fascist dictatorships.
It doesn't matter how brave you are, as soon as you turn to violence you either get beaten by superior command structure or you turn into a right winger to win.
The only way forward for the left wing is electoral politics, and in Ame
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Rule #3: SJW's Always Project.
Re: Wrong target (Score:1)
Went to the local Roche Bros this afternoon. Avocados were $3 each. Weren't that much cheaper before bad orange man tariffs either.
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it always amazed me that putting guacamole on bread somehow became a symbol of extravagance
Smooshed avo on toast is delicious. Ironically avacado in a smoothie shouldn't taste as good as it does, but it does.
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It's not even guacamole. That's got salt and lemon juice.
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It takes 15 years to mature an avocado plant before it will yield fruit. And these people are the ones complaining about waste and the environment. Don't you see the irony?
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a very long time ago, I had a neighbor from one of the Caribbean islands and every Sunday after returning from church she would invite us over for lunch, which was usually something she called buljol, made from shredded codfish, onions, tomatoes and a lot of diced avocado served with a fresh baked flatbread.
little did we know we were eating like kings
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The avocado toast is not the reason.
But it is a symptom. For the complete lack of interest up to outright refusal or denial of your overall financial situation. Most people don't even have a rough estimate of monthly expenses vs. income. They know that skipping the daily latte won't buy them a house - but they do not know that it would pay filling up their car once. So they don't realize that that anxiety attack when the reserve light comes on two days before the next paycheck is totally optional. And you w
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George Soros has the answer. Let's give him another medal.
Every thing that's gone wrong since the French Revolution is the fault of George Soros
Re: Wrong target (Score:2)
Totally. Suppose the all lived on instant coffee and Ramen noodles, then they would be yelling about collapsing consumer spending, which they already are:
https://www.msn.com/en-us/mone... [msn.com]
The money is just not with them, it is with billionaires.
Consumption (Score:3)
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We distorted the entire economy so that retired people can quit working
No, we distorted the economy to concentrate wealth and power. We have a tax system where Bill Gates donates a million dollars and a third of that is taken off his taxes. Since his donation doesn't reduce government spending, the rest of us have to pay more taxes to make up for the taxes Gates isn't paying. Taxes are like dividing the bill at lunch, if one person pays less everyone else has to pay more. Or you can order one less pizza and everyone else pays the same amount for a smaller share.
And its not jus
I don't think that's necessarily the problem (Score:2)
Also we don't look
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The billionaires are our creation and we can destroy them by shopping local.
No, we can't. This is one of those "If everyone would just ..." solutions that is pure fantasy because we lack the means to get everyone to do anything. Amazon does not lack the means to get people to enrich them. Your local business just can't compete with Amazon's marketing budget.
Re:Wrong target (Score:4, Insightful)
Gen X here. When I was in my 20's, we couldn't afford restaurant food, either dine-in or takeout, and we certainly couldn't pay extra for delivery, except for an occasional pizza night. We made ends meet by cooking for ourselves, or resorting to packaged ramen when we had to. We didn't have fancy $1,000 phones in our pockets that we replaced every year. The cost of living back then was more affordable because we didn't spend as much on things Gen Z-ers take for granted.
No, I'm not buying the sob story. When you don't have money, you don't spend it. When you do spend it anyway, you end up living paycheck to paycheck. That's how it's always worked.
You also had much cheaper food (Score:2)
Hell as a k
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Billionaires don't have money, they just own stocks of companies. As companies make money, they get more stocks as that money is used by the companies for example to get more workers, buildings or machines.
So billionaires don't extract money from the economy, they multiply the available money in economy and distribute it to working class. Companies that get more buildings hire workers to build, companies that buy equipment offer work for factories that make those equipment.
What is extracting money from the
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Cost of living may be higher, but there are plenty of ways they're flat out living beyond their means. What is in their pocket, on their wrist? I'm betting the cell phone, car keys, and even watch is well beyond their means. Further, it's not like it is a one-and-done financial mistake, it's a lifestyle of excessive overspending and upgrading.
I'm a Luddite. I still have a wrist watch my wife bought me 20 years ago. When I take it for a battery replacement, jewelers are surprised to see such an old model in
Re: Wrong target (Score:2)
Re: the new slashdot (Score:2)
New slashdot.. wish it was new and disallowed people to cower behind anonymous posts.
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Apparently, you are.
Give it time (Score:2)
It takes a while to save a useful amount of money. You put aside a little each month, and it grows to a healthy amount after decades. While you are still working an entry level job (according to the summary -they are) you are not going to have much saved.
They are in their 20s. None of us had much saved at that age. I think I still had 3-4 roomates.. and was making wonderfully smart life choices /s
Dude I don't think you realize how old Gen Z is (Score:2, Insightful)
There are plenty of Gen Z who have had plenty of time to have saved money if they had real jobs. The problem is we've been automating factories and dozens of forms of blue collar labor while increasing productivity for white collar labor and bringing in tons and tons and tons of immigrants who are often pai
Re: Dude I don't think you realize how old Gen Z i (Score:1)
The structural problem in our society isn't that a small number of people are seemingly spectacularly rich with little effort. The structural problem is that way too many people get fed a story saying that it's possible for *everyone* to be spectacularly successful with seemingly little effort.
Why bother learning to read and write when machines do it for you? Why bother to add and subtract when you have a calculator? Why have money in the bank for a rainy day when government will pay for free food, free med
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I'm ok paying taxes to fund government programs that keep poor people from starving or provide medical care to those who could not otherwise afford it.
We live in a society. Poverty shouldn't result in death or untreated illness. There but for the grace of God go I, and all that.
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Why have money in the bank for a rainy day when government will pay for free food, free medicine, free condoms, free tampons, free free free.
Clarify this for me: Where are these "free free free" handouts coming from? Are you really suggesting that people plan their needs around handouts? Explain how that works, because I have no idea where I'd go for free anything.
And I can't imagine anyone being against stocking tampons in the girls' rooms: that's just basic sanitation, and decency.
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We will be like Russia where we have fake elections and anyone that speaks out gets arrested and sent to camps or thrown out of windows.
What makes you believe any of that? The answer is you have been brain washed. And if you ask Russian they will tell you that. Because they have been brainwashed. The world is run by the people who control and manipulate the flow of information. Which is why people are worrying about immigrants and trans participation in sports.
Instead of worrying about an expensive health care system that produces lousy results with the most deaths from COVID of any country in the world. An expensive retirement system that
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I don't think those are even the big issues we should worry about. This is my list:
1. Sudden death of all humans (asteroid, pandemia, AI, super volcano etc.)
2. Population collapse ( as it has happened with rats https://en.wikipedia.org/wiki/... [wikipedia.org] )
3. Human workers replaced by automation ( not a problem in itself, but it will cause a lot of suffering if not organized properly )
4. Global warming (which might cause starvation of large amounts of population + natural catastrophes + brain eating mushrooms )
Re:Give it time (Score:4, Informative)
No, things have definitely changed. I bought my first house when I was 26 years old. The price was roughly 3.3x my annual salary.
In Canada (cos that's where I live), that's now a sad, sick joke, with houses costing something like 8x to 10x the average annual salary, and probably 20x to 40x annual entry-level salaries.
The kids are being ripped off even as the oligarchs and tech bros enrich themselves obscenely.
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It depends a lot on where you live. I'm in the midwest united states. "Bought" (scare quotes due to mortgage) my first house in 2017 at age 29, 2.25x annual salary, 3.5% loan. I was making well below market rate for my profession at the time. Just paid off the loan last year.
Granted, I live alone, single, no kids. 1000 square foot house in an ok city, working as an engineer.
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You are correct. I am kicking myself for not reading about finances earlier. I paid off the loan early because I just wanted to see the amount owed go down and didn't need the money. Total paid was $149k, ending April last year.
I was also saving for retirement all the way along. By the end of last year, total contributions to retirement accounts exceeded what I paid for the house, and the value is of course much higher than that due to market growth. I am currently saving as much as I can to make up for
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From TFS:
Younger Americans don't have enough saved to cover a single month of spending, showcasing their vulnerability should the economy head into a downturn.
This is not about savings in general that grow over decades. TFS is talking about an emergency fund that can keep you solvent if you have an unexpected event, like losing your job. A good rule is to have from 3 to 6 months of your expenses in accessible savings. That's the first savings objective anyone should have. Then everything else follows: contributing to a retirement account, saving for luxury items, trips, etc.
If you can't pay your student loan, rent, and household bills and still have mone
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All good points.
Some of this might be down to lack of financial literacy. Millennial here, and I did all of this in the wrong order. No emergency fund the first 9 years out of grad school, paid off a 3.5% mortgage in 7 years just because I wanted to see the amount owed go down, only contributed a little more than required to get 401k match.
Started reading about finances after paying off my house (what do I do with this money?), and I'm really kicking myself for not reading about this stuff earlier. Never
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It's not entirely a bad thing to pay off your mortgage early. But, as you discovered, there are better ways to handle your money. The extra that you put towards your home loan could have earned much more than 3.5% in the stock market. And the mortgage interest is deductible, so the net cost of borrowing that money is lower than a loan for something else.
TL/DR: don't be in a hurry to pay off your home loan if you have a better place to put the money.
Outside of your 401(k) I'd consider something more aggressi
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Ah, should have specified, I'm using the Series I savings bonds. They're indexed to inflation, and the current ones pay 1.2% real on top of inflation. The beautiful thing is they can be redeemed at face value after 1 year and are not marked to market. I'm working to save 4 years of expenses in those, kind of as FU money if I want to go back to school for something else. Recently inherited some money; some of that is going to this, as is a part of my income, but I put more in the 401k.
401k and Roth IRA a
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I'm working to save 4 years of expenses in [Series I savings bonds], kind of as FU money if I want to go back to school for something else.
Fair enough. How you invest depends on what you need the money for, and the time-horizon.
If you want to use the bonds for several years of school, consider a bond ladder. [investopedia.com] I'm not sure whether a 529 plan is relevant, but you might want to check that out also.
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Series I bonds can be redeemed for their book value any time between 1 year of holding and maturity at 30 years, so I don't need to ladder them. Interest compounds tax deferred, is always state tax free, and it is totally tax free when used for qualified educational expenses within certain parameters.
A 529 plan is a good thought, but I also don't want to lock myself in to using this money for education.
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You don't have to. You can withdraw the money and use it for anything you want. You will just have to pay a 10% penalty on earnings, and never on withdrawals of principle.
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More of my income goes into the 401k plan at work and a Roth IRA, which are invested 100% in the S&P 500 and a total US stock market index fund. I only started buying savings bonds last year.
The I bonds are something of a cross between a parachute and FU money. Goal is to have four years of living expenses, which would give me the option to go back to school and change careers if I stopped enjoying work. I had a bad spell most of last year; it's looking up now though.
I am definitely loving reduced li
Re: Give it time (Score:2)
I got my first job 18 years ago. It paid 60k/year. Just enough to cover a 1200/mo rent, pay off my car loan in 1 year, and keep me fed and clothed.
Somehow between being a good little worker drone, not pissing away my money on frivolities, and marrying a woman who was also a good little worker drone who didn't piss her money away on frivolities, we managed to cough up a 300k down payment just before the covid hit, with more than enough left over for household repairs and contingencies.
The combined banks of m
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What a wasted life.
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Yeah. The pattern is you were lucky and privileged to get a $60K entry-level job, be born at the right time, and have bank of Mom and Dad available to pitch in.
Re: Give it time (Score:1)
My parents and my wifeâ(TM)s parents started with a lot less. Ditto for some if my high school and college buddies. Seems there's a lot of "luck" going around.
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The plural of "anecdote" is not "data."
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got my first job 18 years ago. It paid 60k/year.
You do realize $60,000 is far above the average wage in the United States? Much less the average wage of someone just starting out.
marrying a woman who was also a good little worker drone
The adage that two can live as cheaply as one is almost true. Finding a life partner to share the costs is a huge advantage. At least until you have children.
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$60000 is almost exactly average wage today. ~150% of average wage 18 years ago.
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$60000 is almost exactly average wage today. ~150% of average wage 18 years ago.
I was thinking median compensation since my point was most people don't make $60,000. In 2023 the median was $43,222.81 according to the Social Security Administration. That was 187% higher than in 1991. The average for 2023 was $63,932.64, 206% higher than 1991. In 1991 the ratio of median to average was 72%, it was only 67% in 2023.
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Right. Hopefully they're living below their means, saving that little bit each month, and staying out of debt.
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They are in their 20s. None of us had much saved at that age. I think I still had 3-4 roomates.. and was making wonderfully smart life choices /s
I bought a condo at 26.
I moved out in 1976 as an 18 y/o. I lived alone in my own apartment in a minimum wage job. Put myself through college, got better jobs, etc etc etc.
Kids today can't do that. College costs too much. Housing costs too much.
Re: Give it time (Score:2)
Had to use that reserve once. Life saver. No regrets.
Re: Attention Ladies of Gen Z (Score:1)
Yeah right here guy. I'm totally one of them hot chicks your read about on the internets.
No way I jack all your shit and leave you tied up with an embarrasing message shaved on the back of your head. Now what's your address?
You couldn't feed a dog on what Gen Z makes (Score:2)
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Class Issue (Score:2)
How young? (Score:2)
I like having 6 months' salary in the bank, but it wasn't actually a thing for me for a LONG time. Now I have enough to retire above the poverty line and maybe - if nothing goes wrong - to maintain something close to my middle-class lifestyle until I die.
Having four weeks pay in the bank? If you're 'young' (I'd say under 30), that is already AWESOME, especially in this economy. Lots of people live their entire lives on next week's pay, forever giving up a percentage to the credit card companies or worse,
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just show up at the ER with an fake ID they can't trun you away or can they force you to give your real name.
Living paycheck to paycheck (Score:2)
It's always been a bad idea. It's just more fashionable today.
It has nothing to do with the cost of living. When I was starting my adult life in the 90's, we made do by getting roommates and not eating out (or getting food delivered). We didn't spend large amounts of money on phone plans or phones.
What we knew, what we had been taught, is that you don't spend everything you make, and you put some aside for a rainy day. That principle hasn't changed.
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Relative price of things has changed is the recent years:
https://howmuch.net/articles/p... [howmuch.net]
Also housing-income gap is now larger than it was in the 90's.
https://www.voronoiapp.com/rea... [voronoiapp.com]
The problem (Score:1, Insightful)
The problem is that people want and expect too much, and are not willing to work hard enough to get it without bitching the whole time.
I graduated with $100K in student loan debt. Guess what? I paid it off!
Cities are expensive to live in. So guess what? Don't live in those expensive cities. Maybe you should get some roommates too. I didn't buy a house until I was 30.
Restaurants are expensive. So guess what? Don't go to them.
Maybe you should have a few pieces of toast with just butter and breakfast. Maybe
Yeah Starbucks just has to ... (Score:2)
... open in cheaper cities because you have to have that latte special every morning with that gluten-free flatbread. No wait, learn how to constrain yourself and live on the bare minimum to save money for the future. Want to buy a house?