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Money advice from older Americans may be outdated and not applicable today.
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Often, older adults like to lecture young people about how they manage their money. Many young people feel that the majority of older folks sound out of touch, because old-school advice doesn’t always apply in today’s expensive world. Here’s why young people are tired of your lectures about saving money.
1. Young people want to live fulfilling lives
More young people are looking to change the narrative about what life should look like and are taking more steps to prioritize their needs to live a more fulfilling life. Instead of constantly hustling at work and never enjoying downtime, they want to take a break from their busy schedules to do more with their friends and family and experience the world around them.
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Many older Americans like telling younger generations to stop wasting money on expenses like dining, entertainment, shopping, and travel. But most young Americans realize that depriving themselves of fun won’t improve their financial situations. However, spending some of their income on fun improves their well-being and makes life more enjoyable. So it’s worthwhile for young Americans to consider their wants and values when deciding how to spend and save money.
As money and mental fitness coach Melissa Mitt noted, “Knowing your values is extremely important when you’re starting your personal finance journey. For example, if you want to cut back on your spending and your initial reaction is, ‘I go out to eat too much,’ what if you LOVE going out to eat? Drastically cutting into that fund may make you resentful and delay progress. Looking into a different phone or insurance provider could be the solution instead. Another tactic is to create a list of your wants and rank them. Whatever is highest on the list gets funded first, and so on.”
2. Living costs continue to rise
Young people are finding it especially difficult to navigate rising living costs. Everything from gasoline and food to utility costs continues to increase. When you have minimal (or no) savings in the bank, it can be hard to get ahead when you’re already struggling to live paycheck to paycheck. As living costs continue to rise across the country, it only gets more challenging for young adults to set aside extra money in a high-yield savings account.
3. Many young people enter adulthood with debt
It can be challenging to save money and prioritize other financial goals when you begin your adult years with significant debt. Many young adults have debt from education expenses that impacts their ability to put extra money toward savings. Instead, they’re putting a large chunk of their income toward debt payoff and are forced to delay their savings goals.
4. Saving to buy a home takes much longer
Many young people have dreams of becoming homeowners, but the path to get there is now more of a challenge due to rising home prices. According to the Federal Reserve Bank of St. Louis, the median home sale price in the United States in Q4 of 2022 was $467,700.
For most young people, saving enough money for a down payment takes a long time — many struggle to afford increasing rental costs, which continue to skyrocket. While younger Americans may hope to buy a house someday, rising housing costs delay their dreams.
Average home prices used to be more affordable in years past. In 2000, the median home sale price was $165,300. In 1980, the median home sale price was $63,700. Additionally, home prices have increased much faster than wages.
According to Real Estate Witch, when accounting for inflation, home prices have increased by 118% since 1965, while median household income has increased by just 15%. Looking at these stats makes it easier to see why young folks are struggling to buy homes.
The financial landscape is constantly changing
If you’re giving well-meaning financial advice to the young people in your life, keep in mind that the world is constantly changing. What worked for you financially may not apply at all today. No matter your age or situation, there’s no one right way to manage your money. Check out our personal finance resources for helpful money management tips.
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