USA Today series on Generation Debt

[abby]

USA TODAY begins a six-week series today exploring the issues of being young and in debt. They'll also have strategies for managing debt, cutting expenses and saving money.

http://www.usatoday.com/money/perfi/credit/2006-11-19-young-and-in-debt-cover_x.htm

Feel free to discuss the article and your experiences managing debt here.

thanks,
abby

[pisces2473]

Mark, there's tons of genX & Y stuff.

[wordsmith]

"When I came out of college, I knew I had to live within my means," says Williamson, who had $7,000 in college debt that took 10 years to pay off. "I used a public washeteria. I even saved for a TV. It took me two years to get a TV."

Add Madison Avenue's version of smart-talking, flip-flop-clad young adults springing for $5 lattes and downloading on their iPods, and you've got an image gap, too.

" 'Quit whining' — I've heard that a lot," says Draut, who is director of the economic opportunity program at Demos, a public-policy research group. "Someone sees a 25-year-old buy a plasma-screen TV at Best Buy, and they think every 25-year-old is buying a plasma-screen TV at Best Buy."

There's a blame-the-victim attitude at work, too, says William Strauss, co-author of Millennials Rising, a 2000 book that identified the generation born from the early 1980s to the early 2000s.

"There's the common misconception that they have these debts because they're buying iPods or cable TV," Strauss says. "It's not that. It's student loans and housing

I like that this distinction is made. The popular conception, particularly by older people (but also from within us) is that if you're in debt, you're living extravagantly, which is def. not necessarily true. You may be living beyond your means, but it may be a matter of living beyond your means just to afford the basics of food, clothing and shelter, not living beyond your means to finance luxuries. Granted, it's still living beyond your means, which is a problem, but that speaks more to the "means" that are available to many people than anything else. You're going to be living beyond your means while scraping by at the bare minimum if wages in certain fields don't become a little more realistically liveable.

I for one am really tired of my PROFESSIONAL CAREER (not a McJob, not seasonal labor, but a professional career track) dictating that there is a fairly LARGE percentage of the country that is quite simply completely and totally off limits to me (even to rent in, let alone buy a home if that's what I wanted). Now, it's true that many of the places that are simply not a consideration for me based on average salaries for my profession are not places I would choose to live. But I WOULD like to be able to have that choice, whether I opt for it or not.

[cache]

I for one am really tired of my PROFESSIONAL CAREER (not a McJob, not seasonal labor, but a professional career track) dictating that there is a fairly LARGE percentage of the country that is quite simply completely and totally off limits to me (even to rent in, let alone buy a home if that's what I wanted). Now, it's true that many of the places that are simply not a consideration for me based on average salaries for my profession are not places I would choose to live. But I WOULD like to be able to have that choice, whether I opt for it or not.

Exactly. I have to make some sacrifices to live where I live. And to afford to buy the average house, with 100K down, you have to have an average salary of 120K. I left Ohio like many people because of the limited number of professional opportunities. It is difficult to imagine what will happen in the next 10...20 years when all of the talented people leave(or never come to) California and other expensive markets because they can't afford real estate. Probably the same thing that has happened to the rust belt...

[wordsmith]

Exactly. I have to make some sacrifices to live where I live. And to afford to buy the average house, with 100K down, you have to have an average salary of 120K. I left Ohio like many people because of the limited number of professional opportunities. It is difficult to imagine what will happen in the next 10...20 years when all of the talented people leave(or never come to) California and other expensive markets because they can't afford real estate. Probably the same thing that has happened to the rust belt...

I don't even have the choise of making the sacrifices to live in X area. I'm already making all the sacrifices I can. I've looked at jobs where you live. No matter what I sacrifice, they are just plain not doable. And I'm a talented person who could no way afford your state, working in my field and having that as the primary household income. As a second income perhaps, but I'm not sure what it would make a dent in.

[AshleyJordan]

I understand. What I predict is that a lot of people in our lines of work (artsy or social services,) are going to start jumping ship for more lucrative careers that they are less passionate about. As I've posted before, I can't live on rice and beans forever just because I'm down with the cause.

It's going to be a lot harder to retain talented people in lower-paying fields because of rising debt burdens and costs of living, unless they're trust fund kids who don't really have to work.

[wordsmith]

It's not just the being down with the cause that keeps me in "my" type of work, though. It's the environment. I can't foresee ever being happy in an environment other than those the type of which I've sought. If you have no interest in the "lucrative" careers, that makes it tough. I wouldn't last three seconds at something I'm less than passionate about. Besides, journalism isn't expecially artsy or social servicey, outside of allowing some flexibility for creativity of craft and also providing a public service.

[AshleyJordan]

Well, if you aren't as interested in "lucrative" careers, maybe your overall quality of life is higher in a field that you're passionate about.

[wordsmith]

Depends on what your expectations are.

I don't expect to be wealthy. Therefore, not unhappy in a field where that's not possible. I do, however, expect to be able to afford to live in a wider variety of places than I'm currently able to, with a degree and nearly a decade of outstanding work experience complete with professional accolades.

[pisces2473]

Well, if you aren't as interested in "lucrative" careers, maybe your overall quality of life is higher in a field that you're passionate about.
Ohhhh boy.

[pisces2473]

Now, all of this attention to the problem is great, but what are possible solutions? All of this debt stuff is based on the economy (interest rates, inflation, student loans). We can only change how we live, but the trouble is, many of us are already living fairly simply.

I think we all want to be pretty sensible with our money and our future, it's just the lack of funds TO save that's kicking us when we're already down.

[Kitty]

Mark, there's tons of genX & Y stuff.

LOL!!!

[wordsmith]

Now, all of this attention to the problem is great, but what are possible solutions? All of this debt stuff is based on the economy (interest rates, inflation, student loans). We can only change how we live, but the trouble is, many of us are already living fairly simply.

I think we all want to be pretty sensible with our money and our future, it's just the lack of funds TO save that's kicking us when we're already down.

That is the question.

Because you can make changes, adjust your lifestyle and pare down to the bare minimum...and if you still aren't making a dent, you're not saving anything.

[pisces2473]

That is the question.

Because you can make changes, adjust your lifestyle and pare down to the bare minimum...and if you still aren't making a dent, you're not saving anything.
Yeah. Which is why I'd like to see some possible solutions mentioned in this series. Maybe by the end of the week, we'll see it? haha

I know there are more ways I can pare down my living...but I don't think it would allow me to save much. Not when bills and things just keep on rolling in.

[CTGirl]

Yeah. Which is why I'd like to see some possible solutions mentioned in this series. Maybe by the end of the week, we'll see it? haha

I know there are more ways I can pare down my living...but I don't think it would allow me to save much. Not when bills and things just keep on rolling in.

The thing is too, if you've got a reasonable amount of debt (I just have loans from grad school and my car) is it really going to make you happier to be skimping on your daily life and never spending any money just so that you can pay off slightly more of that debt and save more?

Personally, it seems to me that my quality of life will be better served by living to be happy, not living to save money. I could sit at home every night and save up more money, and then die next year, having never had any fun in my life. I'd rather spend money and have some debt (remaining practical about it of course, and not going nuts)

[pisces2473]

The thing is too, if you've got a reasonable amount of debt (I just have loans from grad school and my car) is it really going to make you happier to be skimping on your daily life and never spending any money just so that you can pay off slightly more of that debt and save more?

Personally, it seems to me that my quality of life will be better served by living to be happy, not living to save money. I could sit at home every night and save up more money, and then die next year, having never had any fun in my life. I'd rather spend money and have some debt (remaining practical about it of course, and not going nuts)
I don't have ANY debt.

I don't make enough to really save anything--for a vacation, for a car, to put in my RothIRA (I've never worked where there's employer-sponsored retirement). That's what troubles me.

Yeah, I see what you're saying about having fun and all...but, what if I don't die tomorrow but don't have any money and go hungry instead? I'm just trying to do both at the same time. I've always worried about money.

I think the difference here is that you have loans--they don't have to be paid back immediately. So you are "free" to spend your money as you please. Also, you make more than I do. If I don't make a lot...there's not much to save, so it's apples and oranges. I get that people have debt and can't save. But there are others who don't have debt and still can't save or pay for things they really want, so they either enter the debt trap or they go without.

[wordsmith]

It's very difficult for some to enjoy life with debt hanging over your head like the Sword of Damocles.

[CTGirl]

I don't have ANY debt.

I don't make enough to really save anything--for a vacation, for a car, to put in my RothIRA (I've never worked where there's employer-sponsored retirement). That's what troubles me.

Yeah, I see what you're saying about having fun and all...but, what if I don't die tomorrow but don't have any money and go hungry instead? I'm just trying to do both at the same time. I've always worried about money.

I think the difference here is that you have loans--they don't have to be paid back immediately. So you are "free" to spend your money as you please. Also, you make more than I do. If I don't make a lot...there's not much to save, so it's apples and oranges. I get that people have debt and can't save. But there are others who don't have debt and still can't save or pay for things they really want, so they either enter the debt trap or they go without.

I definitely see what you're saying, and I of course respect the fact that your financial situation is different from mine.

I guess for me, the bottom line is that I always assume I will have a means of support - I will always have a job of some sort with which to pay enough bills to get by (even if that means moving to a cheaper area). I know that I may not ever be able to make as much money as I would ideally like, but I know that I can always make enough to get by. But, maybe other people don't share this perspective, and therefore see life and finances differently than I do.

[wordsmith]

I definitely see what you're saying, and I of course respect the fact that your financial situation is different from mine.

I guess for me, the bottom line is that I always assume I will have a means of support - I will always have a job of some sort with which to pay enough bills to get by (even if that means moving to a cheaper area). I know that I may not ever be able to make as much money as I would ideally like, but I know that I can always make enough to get by. But, maybe other people don't share this perspective, and therefore see life and finances differently than I do.

Yeah, I don't assume that, at all, because I already live as inexpensively as possible, in as inexpensive an area as it comes, and even at that rate, have a very hard time getting ahead.

[pisces2473]

I definitely see what you're saying, and I of course respect the fact that your financial situation is different from mine.

I guess for me, the bottom line is that I always assume I will have a means of support - I will always have a job of some sort with which to pay enough bills to get by (even if that means moving to a cheaper area). I know that I may not ever be able to make as much money as I would ideally like, but I know that I can always make enough to get by. But, maybe other people don't share this perspective, and therefore see life and finances differently than I do.
I don't think it's that easy though, to say that "I'll always have a job" and "I can just pick up and move."

Job hunting is tough. That's why I try to be prudent with my money, just in case something should happen. I just went through all of my savings with a new job and a move.

[CTGirl]

I don't think it's that easy though, to say that "I'll always have a job" and "I can just pick up and move."

Job hunting is tough. That's why I try to be prudent with my money, just in case something should happen. I just went through all of my savings with a new job and a move.

Well, I'm not saying that I will always be able to have a job that I love, or one in my field even, but Starbucks will always be there for me - and they have fantastic benefits :)

And as for moving, the only thing I've ever had to pay for was the deposit on the new place, and if nothing else, a loan from the parents can cover that.

I think that may be where my sense of security comes from - knowing that my family will always be there as my safety net if I were to ever be in crisis. If I were to right now lose my current job and not find another, I could move in with my sister and get a retail/foodservice job in Albany, and work my way back up. I'm never going to have to live on the street, and I am confident knowing that.

[steph78]

I don't think it's that easy though, to say that "I'll always have a job" and "I can just pick up and move."

Job hunting is tough. That's why I try to be prudent with my money, just in case something should happen. I just went through all of my savings with a new job and a move.
I worry, too - it really got to me when it took me six months after finishing grad school to find full-time employment and I had to live off my small amount of savings during that time. Five years later, even though I am fortunate enough to have no debt and a job that allows me to put something away in savings each month, I still worry if it's enough or not. I think about all the what-ifs a lot...

[pisces2473]

Well, I'm not saying that I will always be able to have a job that I love, or one in my field even, but Starbucks will always be there for me - and they have fantastic benefits :)

And as for moving, the only thing I've ever had to pay for was the deposit on the new place, and if nothing else, a loan from the parents can cover that.

I think that may be where my sense of security comes from - knowing that my family will always be there as my safety net if I were to ever be in crisis. If I were to right now lose my current job and not find another, I could move in with my sister and get a retail/foodservice job in Albany, and work my way back up. I'm never going to have to live on the street, and I am confident knowing that.
We just had to pay $3000 for our place. 2 month sec. and 1st months rent. That's $1500 each...and other "new job" expenses popped up, like new clothes, more gas, paying for COBRA, car repairs, and the list goes on.

Oh I won't go homeless either--my family has already bailed me out on occassion. I'm trying to get to a point where I've built my savings back up.

[wordsmith]

I def. view my family as a safety net in the sense that they'd never let me be homeless, but they can't really provide for me or bail me out of anything, or really offer me anything resembling a loan.

[WorkInProgress]

I guess for me, the bottom line is that I always assume I will have a means of support - I will always have a job of some sort with which to pay enough bills to get by (even if that means moving to a cheaper area). I know that I may not ever be able to make as much money as I would ideally like, but I know that I can always make enough to get by. But, maybe other people don't share this perspective, and therefore see life and finances differently than I do.

I don't make that assumption either. I want to retire at some point. I'd like to buy a home. I'd like to be able to afford kids. I don't want to have to worry about spending a little money here and there. I'm uncomfortable about the idea of any of that happening if I'm always living paycheck to paycheck.

But I understand that not everyone shares my perspective as well.

[EmberMae]

Good article. I like the fact how it put prices in inflation adjusted dollars, to show how much these costs have really gone up. It's a depressing picture really. The only thing that is propping the economy up at this point is borrowing, loosening of lending rules, new kinds of mortgages that end up being more expensive in the end, but allow people to buy a house with less than the customary 20% down (impossible with housing prices in many areas). Right now, I feel privleged. We have significant debt, but it is under control. It will be six years before it is all paid, but it's getting paid. But we have two incomes in a relatively low cost of living area. I don't want to live here the rest of my life, but honestly I don't see many ways around it unless we get huge raises. Incomes are not keeping up with prices. It's a simple fact. Debt is a stopgap measure that will eventually reach its limit.

[vxmike]

It's just more evidence of the war on the middle class. Economic benefits the middle class used to enjoy are being steadily destroyed with each new generation.

First it was retirement. With the exception of those with traditional pension plans (government and a select few private employees), retirement will never be a reality for most middle class people. This was the first benefit to fall, and a large percentage of the boomers will never be able to retire.

Next up was home ownership. The boomers and some of gen-x were able to afford homes before the huge runup in prices, but some of X and almost all of Y and beyond won't be able to afford a home unless prices crash. Some may be able to buy a home but I don't really consider spending 50% of wages with an interest-only mortgage "affording" a home.

We're now seeing that much Gen Y can't even afford the basics of being middle class since the costs of rent, food, utilities, gasoline, education and healthcare are just spiraling out of control at the same time wages are flat or falling.

Most of the 20-somethings I know even with professional jobs still live with their parents and those who live independently almost all have massive debt. Even so, I can't hold younger people blameless. The majority of Gen Y is too entitled and often misclassify "wants" as "needs". Far too many have new cars, ipods, and expensive clothes despite the fact they're failing financially.

[pisces2473]

Good article. I like the fact how it put prices in inflation adjusted dollars, to show how much these costs have really gone up. It's a depressing picture really. The only thing that is propping the economy up at this point is borrowing, loosening of lending rules, new kinds of mortgages that end up being more expensive in the end, but allow people to buy a house with less than the customary 20% down (impossible with housing prices in many areas).
I agree, I liked that too--it also gave more credence to the argument that the article was trying to make. Interesting how in 1970s dollars, people made MORE than they do now, but everything else now is more money.

The borrowing stuff isn't that great though...because that just pushes us further into debt, you know? Just digging the hole deeper...

[PenforPrez]

I definitely see what you're saying, and I of course respect the fact that your financial situation is different from mine.

I guess for me, the bottom line is that I always assume I will have a means of support - I will always have a job of some sort with which to pay enough bills to get by (even if that means moving to a cheaper area). I know that I may not ever be able to make as much money as I would ideally like, but I know that I can always make enough to get by. But, maybe other people don't share this perspective, and therefore see life and finances differently than I do.

That's what's worrying me frantically these days. I will not have a safety net if my father passes away; I WILL have to find another place to live. My father turns 80 in four months; this is a fact I have to consider. I don't know where I would go or what I would do. I would seriously have a problem.

I presently do not make nearly enough to support myself on my own, and I'm to the point to where I feel a lot of pressure on myself to find a solution. But the same problems that I've always had are still there and I'm still not able to solve them. And the circle begins again.

Paul

[AshleyJordan]

This probably isn't really healthy or good, but I've pretty much accepted that I'll have serious student loan debt for a long time. I've consolidated, I'm trying to pay it off as quickly as possible, but it was unavoidable, even with all the scholarships I got. My parents wouldn't pay for school, so I had to borrow. End of story.
I've managed to avoid credit card debt, but already being so far in the red makes the idea of borrowig ~150K somewhat more palatable. Again, I'm probably just resigned, but I see no real alternative to taking on massive debt, especially for "serious" decisions like a place to live or an education.

[WorkInProgress]

It's just more evidence of the war on the middle class. Economic benefits the middle class used to enjoy are being steadily destroyed with each new generation.

First it was retirement. With the exception of those with traditional pension plans (government and a select few private employees), retirement will never be a reality for most middle class people. This was the first benefit to fall, and a large percentage of the boomers will never be able to retire.

Next up was home ownership. The boomers and some of gen-x were able to afford homes before the huge runup in prices, but some of X and almost all of Y and beyond won't be able to afford a home unless prices crash. Some may be able to buy a home but I don't really consider spending 50% of wages with an interest-only mortgage "affording" a home.

We're now seeing that much Gen Y can't even afford the basics of being middle class since the costs of rent, food, utilities, gasoline, education and healthcare are just spiraling out of control at the same time wages are flat or falling.

Most of the 20-somethings I know even with professional jobs still live with their parents and those who live independently almost all have massive debt. Even so, I can't hold younger people blameless. The majority of Gen Y is too entitled and often misclassify "wants" as "needs". Far too many have new cars, ipods, and expensive clothes despite the fact they're failing financially.

Interesting viewpoint.

Question, though.

Who, historically has been able to retire? I've not done much research on the topic specifically, but I think it's relatively new for the middle class to be able to afford to retire (partly because I think a middle class is pretty new, and partly because I think it's relatively new for people to be living long enough to have many years left after leaving the workforce), and anyway, I think it's a goal to be worked toward. I don't think it's something to be handed out just because someone turns x age, and I don't think it's a right or that it should be treated as one.

[pisces2473]

Interesting viewpoint.

Question, though.

Who, historically has been able to retire? I've not done much research on the topic specifically, but I think it's relatively new for the middle class to be able to afford to retire (partly because I think a middle class is pretty new, and partly because I think it's relatively new for people to be living long enough to have many years left after leaving the workforce), and anyway, I think it's a goal to be worked toward. I don't think it's something to be handed out just because someone turns x age, and I don't think it's a right or that it should be treated as one.
Well, in the "old days" someone would turn 65, and retire with a pension from their company. Even more working class types. FI's dad is 62 and he retired in Feb. I can't remember if he gets his pension now, or when he turns 65. He worked for the local gas company.

Most places are doing away with pensions, since no one works at a job for 25-30 years anymore.

[capella]

Frankly, I would worry less about retirement if I simply made enough to save for retirement. We're going to lose any teacher pension we might have had here when we move. I'm fine with that because I intend to leave teaching anyhow. I worry for my husband though. I would much rather have control over my own retirement saving.

[Winter Storm]

Seriously, when we get into retirement, I don't know what many of us are going to do. I don't think many companies do pensions anymore and I think our generation is on our own.

And yeah, 401ks help, if you have one, but I don't think that will be enough. I have a feeling our generation (sorry for using that word again) will be working til we're in our graves. :rolleyes:

And we'll all be back, on some message board for our 'almost-dead-life crises'
:heehee:

[vxmike]

Most places are doing away with pensions, since no one works at a job for 25-30 years anymore.

That isn't why companies are doing away with pensions...lol. They're doing it to save money, and I can't necessarily blame them 100%. The defined pension isn't a sound financial instrument. Pension and retiree benefits are killing old companies like Ford and GM.

[pisces2473]

That isn't why companies are doing away with pensions...lol. They're doing it to save money, and I can't necessarily blame them 100%. The defined pension isn't a sound financial instrument. Pension and retiree benefits are killing old companies like Ford and GM.
I think it's both reasons, sweetheart.

[pisces2473]

Seriously, when we get into retirement, I don't know what many of us are going to do. I don't think many companies do pensions anymore and I think our generation is on our own.

And yeah, 401ks help, if you have one, but I don't think that will be enough. I have a feeling our generation (sorry for using that word again) will be working til we're in our graves. :rolleyes:

And we'll all be back, on some message board for our 'almost-dead-life crises'
:heehee:
Complaining about the same ol' shit, too. :haha:

[vxmike]

Interesting viewpoint.

Question, though.

Who, historically has been able to retire? I've not done much research on the topic specifically, but I think it's relatively new for the middle class to be able to afford to retire (partly because I think a middle class is pretty new, and partly because I think it's relatively new for people to be living long enough to have many years left after leaving the workforce), and anyway, I think it's a goal to be worked toward. I don't think it's something to be handed out just because someone turns x age, and I don't think it's a right or that it should be treated as one.

Our grandparents generation generally were able to retire. They had access to dirt-cheap homes, and were able to build a sound financial base when wages were much stronger relative to living expenses. Plus they (as a group) enjoyed a lot more pensions than any generation after them.

[AshleyJordan]

Our grandparents generation generally were able to retire. They had access to dirt-cheap homes, and were able to build a sound financial base when wages were much stronger relative to living expenses. Plus they (as a group) enjoyed a lot more pensions than any generation after them.


Even though I have a pretty good understanding of economics and why I'm in debt, I often associate my inability to live the kind of life my grandparents were able to live with personal failure, as do some of my family members. :?:

[vxmike]

I think it's both reasons, sweetheart.

Please...show me one company offering defined-benefit pension plans still hiring that doesn't have a hoarde of people trying to get in. Lots of people would stay at an employer for 20-30 years if they COULD anymore and certainly if a pension plan was available. There is a ton of demand for lifelong job security and pensions by the workers....why do you think government jobs are so highly coveted?

[WorkInProgress]

Well, in the "old days" someone would turn 65, and retire with a pension from their company. Even more working class types. FI's dad is 62 and he retired in Feb. I can't remember if he gets his pension now, or when he turns 65. He worked for the local gas company.

Most places are doing away with pensions, since no one works at a job for 25-30 years anymore.

"Old days," when? Are we talking about just our grandparents and some of our parents, more or less? I can't imagine that we're talking further back than that.

[PenforPrez]

Pension and retiree benefits are killing old companies like Ford and GM.

Random thought (and I'm long overdue for one): Ford and GM caused their own problems. If they would make cars people would actually want to buy, they'd be profitable and healthy. SUV craze of the 90s, anyone??

It's been proven though that tradition pension plans provide a larger return for retirees long term than 401 k's. But this is America. Profits before people! :idea:

Seriously, when we get into retirement, I don't know what many of us are going to do. I don't think many companies do pensions anymore and I think our generation is on our own.

This may sound horribly misanthropic, but in the end, I don't think it's going to matter. I think we'll be lucky to live to 65. Global warming, nuclear proliferation, Peak Oil, the global water crisis. I'm having a harder time believing our very survival is assured that long.

Paul

[EmberMae]

Who, historically has been able to retire? I've not done much research on the topic specifically, but I think it's relatively new for the middle class to be able to afford to retire (partly because I think a middle class is pretty new, and partly because I think it's relatively new for people to be living long enough to have many years left after leaving the workforce), and anyway, I think it's a goal to be worked toward. I don't think it's something to be handed out just because someone turns x age, and I don't think it's a right or that it should be treated as one.
I do agree with you on that---retirement is a fairly new concept that may be short lived. For most of history, you worked (usu. in agriculture) until you were too sick/frail to work, and then your family took care of you and you helped out around the house in whatever way you could. Pensions haven't been around very long and I doubt they will last much longer in any form. The boomers and the generation before are quite lucky in having the funds to retire while they were still healthy enough to enjoy it.

So what is going to happen to us? Most of us are not saving enough to retire. Social security and medicare are in trouble. Can our kids really afford to take care of us? If we even have kids at all?

[vxmike]

Even though I have a pretty good understanding of economics and why I'm in debt, I often associate my inability to live the kind of life my grandparents were able to live with personal failure, as do some of my family members. :?:

Well, stop it! ;): As for the family members not much you can do about that. I've been there. My dad didn't understand the difficulties of today's job market until he was laid off from a 25 year job and discovered he was unable to find another one too. They just can't understand what they haven't experienced.

Life is not all bad though. We do have advantages our grandparents didn't have at our age. Personally I enjoy having all this technology that makes our lives easier. I like driving safer cars that can last 200k+ miles and get much better fuel economy. I like having better medical and dental care available. I like my cushy inside job instead of working on the farm or toiling in a factory. In many ways our lives are better despite being worse if others.

[WorkInProgress]

Our grandparents generation generally were able to retire. They had access to dirt-cheap homes, and were able to build a sound financial base when wages were much stronger relative to living expenses. Plus they (as a group) enjoyed a lot more pensions than any generation after them.

So, basically, our grandparents, after getting the short end of the stick early in life, managed to win the lottery, so to speak, wealth-building and retirement-wise (well, luck and lots of hard work). That makes them the exception (lucky) rather than the rule, no?

[vxmike]

Random thought (and I'm long overdue for one): Ford and GM caused their own problems. If they would make cars people would actually want to buy, they'd be profitable and healthy. SUV craze of the 90s, anyone??

It's been proven though that tradition pension plans provide a larger return for retirees long term than 401 k's. But this is America. Profits before people! :idea:



This may sound horribly misanthropic, but in the end, I don't think it's going to matter. I think we'll be lucky to live to 65. Global warming, nuclear proliferation, Peak Oil, the global water crisis. I'm having a harder time believing our very survival is assured that long.

Paul

Ford and GM are partly to blame in my opinion, but they were unable to forsee the massive increase in costs for retiree medical benefits which is killing them. Pensions plans are flawed because it's unknown how long people will live. Pensions initially provided for a short retirement after 40 years of work. Today people are living so long that many collect a pension for just as many if not more years than they actually worked. It's not a feasible concept...

I agree about not living long. I think the life expectancy had peaked in the US. Our diets are horrible and we don't exercise enough. Most older people eat a lot healthier and they were a lot more physically active in their youth and working years.

[wordsmith]

Well, in the "old days" someone would turn 65, and retire with a pension from their company. Even more working class types. FI's dad is 62 and he retired in Feb. I can't remember if he gets his pension now, or when he turns 65. He worked for the local gas company.

True...each of my grandfathers was solidly middle class (when blue collar was middle class), one was a foreman at a commercial vegetable cannery, the other was a cement mill worker. Each was able to retire with a pension. In the generations before them, though, we were farming families, where you worked literally to your grave, dropping harnessed to the plow, so to speak.

My mother has a tiny one coming to her from her job at a local school district, and my father does not, because he's a small business owner. They won't be able to live off my mom's, so neither will be retiring, like many boomers.

[AshleyJordan]

Oh, absolutely! I've traveled abroad a bunch of times, my grandparents had only been to their country of origin and then stayed stuck in New England, I have a Master's degree they had high school educations, etc. etc.
I guess it's all a tradeoff and there's always a tendency to romanticize the way things "used to be" even if in some ways life was a lot rougher then. I'd just like a certain measure of financial security to show for the hard work I've put in. . . . which is probably why a career change is in the cards within the next year, tops.

[WorkInProgress]

This may sound horribly misanthropic, but in the end, I don't think it's going to matter. I think we'll be lucky to live to 65. Global warming, nuclear proliferation, Peak Oil, the global water crisis. I'm having a harder time believing our very survival is assured that long.

Paul

I'm going to be pissed off if I don't make it to at least 70. I want a return on my investment of retirement money.;):

[WorkInProgress]

Ford and GM are partly to blame in my opinion, but they were unable to forsee the massive increase in costs for retiree medical benefits which is killing them. Pensions plans are flawed because it's unknown how long people will live. Pensions initially provided for a short retirement after 40 years of work. Today people are living so long that many collect a pension for just as many if not more years than they actually worked. It's not a feasible concept...

I'll bet that's also why annuities are so expensive, too.

[SmilesSoSweet]

The only people I hear about that have a pension plan are those in the military and other government jobs. My dad is set. And so are his other brothers that were in the military. My dad has also been working with Customs since he retired from the Navy and has now qualified for their pension plan.

Other than military, I really don't see anyone working at the same place for 20+ years anymore.

[vxmike]

I'm going to be pissed off if I don't make it to at least 70. I want a return on my investment of retirement money.;):

I'm actually planning on dying before I turn 60. Just a reality...I have some health problems that are incompatible with a tremendously long life, and I've yet to become motivated enough to actually eat healthy and take care of myself with proper exercise and sleep.

If I can get 30 more years I'll be happy. I do plan to quit working by my mid 30s though, so I hope to enjoy some good retirement since I don't need to worry about saving for 30-40 years of it. I can't really see myself as being a happy old person anyways, so I'm not too concerned about it.

[wordsmith]

My dad is currently in 30 years of business. But he's a small business owner, so it's not like anybody's paying him a pension.

[Kitty]

Other than military, I really don't see anyone working at the same place for 20+ years anymore.

Where I work they do. There are a bunch of people we call "lifers."

[vxmike]

Where I work they do. There are a bunch of people we call "lifers."

Same here. We have tons of people with 20-40 years in. People will stay long-term for a well-paying job with good security.

[wordsmith]

Actually, yeah, my boss has been here since the mid 80s, this was his first job out of college. He worked up from reporter to editor to publisher.

My receptionist has also worked here since she was just out of high school, she's in her fifties.

We have security, though not the pay. After all, it's newspapers. The only people making money off newspapers are the owners.

[WorkInProgress]

Where I work they do. There are a bunch of people we call "lifers."

Wow. My company's too new to have lifers. We do, however, have a ton of people for whom this is a second career, and I would imagine that several of them will do this until their kids are all the way through college and then retire elsewhere for real.

[PenforPrez]

I agree about not living long. I think the life expectancy had peaked in the US. Our diets are horrible and we don't exercise enough. Most older people eat a lot healthier and they were a lot more physically active in their youth and working years.

The concern with both global warming and Peak Oil is massive global starvation, to the point of nearly wiping out the human race. The serious Peak Oil proponents expect that to occur well before mid-century (to be replaced by a brutal neo-feudalism), and they say it with a deadly straight face.

Paul

[Kitty]

After the .com bust, there were a TON of people trying to get jobs here because there is job security, awesome benefits, and decent pay. Probably not so much anymore because things are booming again. Still, I know of a ton of people who try really hard to get in here. It's definitely a good place to retire from.

[wordsmith]

Wow. My company's too new to have lifers. We do, however, have a ton of people for whom this is a second career, and I would imagine that several of them will do this until their kids are all the way through college and then retire elsewhere for real.

My first job was with a brand new "company," (it wasn't a company, really, but a newly formed 501(c)3 nonprofit...I got hired as the ink was drying on the letterhead.

At my current job, the paper has been published locally for 152 years, making it the second oldest business in my city.

[pisces2473]

Please...show me one company offering defined-benefit pension plans still hiring that doesn't have a hoarde of people trying to get in. Lots of people would stay at an employer for 20-30 years if they COULD anymore and certainly if a pension plan was available. There is a ton of demand for lifelong job security and pensions by the workers....why do you think government jobs are so highly coveted?
I'm serious...I think it's a little bit of both. Companies are laying off people left and right, people don't think their jobs are secure at all, so everyone's looking out for #1 and job hopping. This is more of a chicken and egg argument--did the companies cut pensions b/c of job hopping or did job hopping lead to cutting of pensions.

[SmilesSoSweet]

Where I work they do. There are a bunch of people we call "lifers."

There were a hand full of lifers at my last job. I just can't see myself working with that company for more than 20 years! Crazy. My mom's been at her job for 18 years.

I wonder in about 20 years from now how many of us (compared to say our parents) can say we just stuck with one company for that amount of time.

[pisces2473]

"Old days," when? Are we talking about just our grandparents and some of our parents, more or less? I can't imagine that we're talking further back than that.
I just said--my FI's father being 62. I think it's more of the older parents and grandparents--yes. My mom has one from her school district. Some jobs still offer them, but you have to be vested. Mostly municipalities...some universities.

[wordsmith]

I just said--my FI's father being 62. I think it's more of the older parents and grandparents--yes. My mom has one from her school district. Some jobs still offer them, but you have to be vested. Mostly municipalities...some universities.

Yup, public schools often ofter them to vested employees.

[vxmike]

The concern with both global warming and Peak Oil is massive global starvation, to the point of nearly wiping out the human race. The serious Peak Oil proponents expect that to occur well before mid-century (to be replaced by a brutal neo-feudalism), and they say it with a deadly straight face.

Paul

I'm very familiar with, and subscribe to, the Peak Oil theory. In fact I'm currently reading an excellent book on the subject.

http://www.amazon.com/Twilight-Desert-Coming-Saudi-Economy/dp/047173876X/sr=8-1/qid=1164060081/ref=pd_bbs_1/002-0803576-4328865?ie=UTF8&s=books

However, I don't forsee food shortages in the US. There is currently an excess of food production, and even though oil will be priced at many multiples of today's price in the future, there will be enough to maintain food supplies in my opinion. The Canadian and South American oil shale sands alone have enough oil to maintain food production for centuries albeit at a very high price.

I do think much of society will suffer and crumble when Peak Oil does really hit, but I don't think anyone will be starving as a result.

[pisces2473]

True...each of my grandfathers was solidly middle class (when blue collar was middle class), one was a foreman at a commercial vegetable cannery, the other was a cement mill worker. Each was able to retire with a pension. In the generations before them, though, we were farming families, where you worked literally to your grave, dropping harnessed to the plow, so to speak.

My mother has a tiny one coming to her from her job at a local school district, and my father does not, because he's a small business owner. They won't be able to live off my mom's, so neither will be retiring, like many boomers.
My grandfather died at 59, while still on the police force. Not in the line of duty, not that it matters now. My grandmother immediately collected his pension for 18 years until she died. Her pension went up with inflation, too. She had a pretty sweet deal.

My other grandfather owned the family business, so no pension for him. Luckily, he had a settlement because he sued a company who hit him with their truck, and my grandmother was savvy with saving and investing. That money is being used to take care of him, now.

My dad won't get a pension--family business. My parents have been good about putting more and more money in their IRAs...but there were times when they couldn't. The fact that my mom's working really helps them out, and she'll get life time healthcare when she retires and a pension. I think she has like...12 more years?

[pisces2473]

Where I work they do. There are a bunch of people we call "lifers."
Yup, when I worked at Y, there were people who'd worked there 30, 40, 50 years. Crazy.

[vxmike]

I'm serious...I think it's a little bit of both. Companies are laying off people left and right, people don't think their jobs are secure at all, so everyone's looking out for #1 and job hopping. This is more of a chicken and egg argument--did the companies cut pensions b/c of job hopping or did job hopping lead to cutting of pensions.

Ok, so if a company offering pensions has a lot of job hoppers they end up not paying as much in pension benefits = I don't think they'll be too concerned about that ;): The companies certainly aren't offering a benefit of comparable value to the eliminated pension. Workers LOVE pensions.

We only need the evidence of so many legacy corporations being burdened with pension plans they can't afford. Look at how burdened the PBGC is right now.

[vxmike]

There were a hand full of lifers at my last job. I just can't see myself working with that company for more than 20 years! Crazy. My mom's been at her job for 18 years.

I wonder in about 20 years from now how many of us (compared to say our parents) can say we just stuck with one company for that amount of time.

If I weren't such a nomad at heart, I'd stay with a company for 20 years if I was happy there. There's a lot to be said for having seniority, higher pay, more vacation time, and being completely comfortable in your situation. The longer I stay here the more I have seniority over the new hires, and I enjoy the benefits that gives me.

[pisces2473]

If I weren't such a nomad at heart, I'd stay with a company for 20 years if I was happy there. There's a lot to be said for having seniority, higher pay, more vacation time, and being completely comfortable in your situation. The longer I stay here the more I have seniority over the new hires, and I enjoy the benefits that gives me.
Oh that's another thing. It's not that easy to keep moving up in a company, even if you stay long-term. Companies don't offer sweet deals like the old days that want to keep you there. Plus, people are more about moving up the ladder and taking care of #1, than having any company loyalty. The old days--you got a job out of HS, college, military...and you stayed there until you retired. They took care of you. It was family. Now, it's survival of the fittest.

[wordsmith]

Oh that's another thing. It's not that easy to keep moving up in a company, even if you stay long-term. Companies don't offer sweet deals like the old days that want to keep you there. Plus, people are more about moving up the ladder and taking care of #1, than having any company loyalty. The old days--you got a job out of HS, college, military...and you stayed there until you retired. They took care of you. It was family. Now, it's survival of the fittest.

Yup. I went as high as I can go with my workplace (unless the publisher retires and I want his job, which I don't) within one year of being here. We also don't get raises (or haven't, for the past several of the five + years I've been here), no employer contribution to 401k, and pretty chintzy medical coverage, so it's not like you're that well taken care of.

[AshleyJordan]

We also don't get raises (or haven't, for the past several of the five + years I've been here), no employer contribution to 401k, and pretty chintzy medical coverage, so it's not like you're that well taken care of.


No raises in 5 years? Not even a cost of living increase of 2 or 3%?

[PenforPrez]

I'm very familiar with, and subscribe to, the Peak Oil theory. In fact I'm currently reading an excellent book on the subject.

http://www.amazon.com/Twilight-Desert-Coming-Saudi-Economy/dp/047173876X/sr=8-1/qid=1164060081/ref=pd_bbs_1/002-0803576-4328865?ie=UTF8&s=books

However, I don't forsee food shortages in the US. There is currently an excess of food production, and even though oil will be priced at many multiples of today's price in the future, there will be enough to maintain food supplies in my opinion. The Canadian and South American oil shale sands alone have enough oil to maintain food production for centuries albeit at a very high price.

I do think much of society will suffer and crumble when Peak Oil does really hit, but I don't think anyone will be starving as a result.

I'm not a total convert yet, but the ideas I've read say that crude oil (and natural gas even more so) is so vital to modern agriculture that modern agriculture will eventually be impossible in a post-Peak Oil world. Result: massive starvation.

The tar shale, though, is little more than useless. Light sweet (thick liquid) crude has 20 times more energy potential than tar shale because shale requires such energy-intensive processes to extract and refine.

It is something I'm seriously studying though right now.

Paul

[pisces2473]

No raises in 5 years? Not even a cost of living increase of 2 or 3%?
HAHAHAHAHAHAHAHA, I can't wait to see what Jess answers...

[AshleyJordan]

HAHAHAHAHAHAHAHA, I can't wait to see what Jess answers...
Ok, sorry if it's a stupid question, but I seriously meant it. :googly:

[pisces2473]

Ok, sorry if it's a stupid question, but I seriously meant it. :googly:
No no...see, Jess and I are friends off the boards (although we've never met) so I just know more about her sitch than you do! No worries.

[AshleyJordan]

Ahh, got it. . . .

[wordsmith]

No raises in 5 years? Not even a cost of living increase of 2 or 3%?

The first year, when I was promoted, a small raise came with it. The next year, another slight raise. Since then, nothing for anybody, raises frozen across the board.

[vxmike]

I'm not a total convert yet, but the ideas I've read say that crude oil (and natural gas even more so) is so vital to modern agriculture that modern agriculture will eventually be impossible in a post-Peak Oil world. Result: massive starvation.

The tar shale, though, is little more than useless. Light sweet (thick liquid) crude has 20 times more energy potential than tar shale because shale requires such energy-intensive processes to extract and refine.

It is something I'm seriously studying though right now.

Paul

The Canadians are making tremendous progress on extracting and refining their shale/sand oil. It will still be a lot more expensive than the nice liquid variety, but it will support agriculture. Food costs will go up (they already are) but I don't forsee mass starvation. That's the key point with Peak Oil -- there will still always be some level of available oil just not at today's price or quantity.

Now what I don't understand is why we don't adopt widespread nuclear power and leave the fossil fuels for things that can't be produced any other way such as plastics.

[Winter Storm]

This may sound horribly misanthropic, but in the end, I don't think it's going to matter. I think we'll be lucky to live to 65. Global warming, nuclear proliferation, Peak Oil, the global water crisis. I'm having a harder time believing our very survival is assured that long.

Paul

Ya know, I have a totally different perspective in that I think we'll probably live a lot longer, probably well into our 80's and 90's with new medical advances, thus putting even more strain on ourselves and family to provide for us during old age.

Either way, we are all horribly fucked. ;):

[PenforPrez]

Now what I don't understand is why we don't adopt widespread nuclear power and leave the fossil fuels for things that can't be produced any other way such as plastics.

Uranium is already in a global supply crunch. We can't build any more nuke plants; no way to fuel them. I'm hopeful with the commercial fusion reactor being built on the French Riviera, but it's not for certain it'll even work, much less become commercially viable.

Paul

[LaFille]

holy crap, you're all scaring me.

my grandfather worked in a metal factory and my grandmother stayed home and raised the five kids and they were able to enjoy a pretty nice life. now they're retired, set for life, and their property which they purchased 60 years ago for peanuts is worth a bundle because of the location. it's pretty amazing. of course they grew up in the depression so they never spent extravagantly and worked hard for everything they have, but the difference between then and now is startling.

[PenforPrez]

Ya know, I have a totally different perspective in that I think we'll probably live a lot longer, probably well into our 80's and 90's with new medical advances, thus putting even more strain on ourselves and family to provide for us during old age.

Either way, we are all horribly fucked. ;):

PMing you Winter; got a random thought here I don't want to threadjack with.

[vxmike]

Ya know, I have a totally different perspective in that I think we'll probably live a lot longer, probably well into our 80's and 90's with new medical advances, thus putting even more strain on ourselves and family to provide for us during old age.

Either way, we are all horribly fucked. ;):

We won't be able to afford the new medical advances. The wealthy already enjoy a longer lifespan than poorer folks and I don't see why that won't continue to be true.

[analogman]

Uranium is already in a global supply crunch. We can't build any more nuke plants; no way to fuel them.
Paul

This is not true. Read this from the IAEA http://www.iaea.org/NewsCenter/PressReleases/2000/prn2600.shtml

People don't like nuclear power plants because of fear not because there is no uranium.

[AshleyJordan]

my grandfather worked in a metal factory and my grandmother stayed home and raised the five kids and they were able to enjoy a pretty nice life. now they're retired, set for life, and their property which they purchased 60 years ago for peanuts is worth a bundle because of the location. it's pretty amazing. of course they grew up in the depression so they never spent extravagantly and worked hard for everything they have, but the difference between then and now is startling.

One of my professors had a fairly elaborate theory about how, due to unions and some New Deal programs, the Depression generation was the only large cohort in America to achieve real financial stability. Nonetheless, a lot of us (naturally) would want the same thing, rarely realizing why it's unnattainable. I'd still like very much to believe that she was wrong, but looking at the quality/cost of my life, as it compares to how much I work and how much debt it's taken me to get to where I am, I do sometimes wonder.

I think also that when you don't really have much financial security, you are often, not always, but often more likely to spend whatever money comes your way on feel-good impulse buys because that can seem more tangible than saving or investing. I've definitely seen this happen in some of the poorer neighborhoods where I've lived, and with some of my friends my age.

[pisces2473]

One of my professors had a fairly elaborate theory about how, due to unions and some New Deal programs, the Depression generation was the only large cohort in America to achieve real financial stability. Nonetheless, a lot of us (naturally) would want the same thing, rarely realizing why it's unnattainable. I'd still like very much to believe that she was wrong, but looking at the quality/cost of my life, as it compares to how much I work and how much debt it's taken me to get to where I am, I do sometimes wonder.
Hmm, almost like out of chaos comes beauty? You have to totally destroy something to rebuild it?

[AshleyJordan]

Hmm, almost like out of chaos comes beauty? You have to totally destroy something to rebuild it?
that was pretty much her point, as I recall. I'm not sure that I disagree with her, but basically that unchecked market forces, culminating in the stock market crash and the depression, were behind generations of income inequality and poverty in America. When it got really bad, regulation (the New Deal, GI benefits, etc.,) was needed to undo the damage, giving us one generation, a blip, of a big healthy middle class. As those regulations on capitalism were undone, income inequality rose again.

[pisces2473]

As an American Studies major, with an emphasis in early 20th century, I definitely agree with you on that. I almost wish we'd have a complete wipe out of things, just so we can get balanced out.

[AshleyJordan]

Do you think there would be a balance? Looking at the debt we owe foreign investors and the ruthlessness and power of some big corporate players, I'm not sure we would get a balance this time around. . .

[pisces2473]

Do you think there would be a balance? Looking at the debt we owe foreign investors and the ruthlessness and power of some big corporate players, I'm not sure we would get a balance this time around. . .
Well, there were big corps back then too...but honestly, I don't know. Nothing's identical.

[PenforPrez]

This is not true. Read this from the IAEA http://www.iaea.org/NewsCenter/PressReleases/2000/prn2600.shtml

People don't like nuclear power plants because of fear not because there is no uranium.

That's an interesting estimate; an influential trading advisor paints a different picture.

http://www.financialsense.com/fsu/editorials/petch/2005/0703.html

As mentioned in an article a few months ago, there are know Uranium deposits of 6 billion pounds globally, with annual consumption of 180 million pounds. Figure 2 illustrates the different projections of uranium depletion, pending an increase in annual consumption rates of 3%, 5% or 8%. Currently, uranium production falls incredibly short of the demand. As oil resources become scarce, uranium will have more pressure put upon it as a resource. All three different scenarios have a similar course until around 2013, where they part trails. By 2020, there is a serious uranium shortage.

Paul

[yankeeyosh]

Mark, there's tons of genX & Y stuff.

Don't worry...I'll get to it. I just had a long evening of trivia and scrabble (our team won trivia...out of thirty teams! :) ) I just can't right now.

I do disagree with the years though...Gen 'Y', in my opinion, is anyone born in 1978 or later. They don't start it until '82, which is the Howe-Strauss definition...delineating it for the HS Class of 2000.

[pisces2473]

I definitely don't see myself as a Y....but I'm not quite an X either...

I'm an XY! It's a boy! :D

[yankeeyosh]

Bear with me.

Mr. Mike, you are speaking my language.

It's just more evidence of the war on the middle class. Economic benefits the middle class used to enjoy are being steadily destroyed with each new generation.

First it was retirement. With the exception of those with traditional pension plans (government and a select few private employees), retirement will never be a reality for most middle class people. This was the first benefit to fall, and a large percentage of the boomers will never be able to retire.

Yes. We have shifted from a defined benefit system, in which the company was responsible for saving for retirement, to a defined contribution system, in which the employee is at least partly responsible. As a result, many people, who were unwilling or unable to save, have atrociously low balances for retirement, and this will almost certainly mean that many of the Boom generation...the first generation really to fall victim of this...will stay in the workforce well past retirement (and clog up the normal flow of advancement in corporate America...much to the dismay of power hungry 'Yers').

Next up was home ownership. The boomers and some of gen-x were able to afford homes before the huge runup in prices, but some of X and almost all of Y and beyond won't be able to afford a home unless prices crash. Some may be able to buy a home but I don't really consider spending 50% of wages with an interest-only mortgage "affording" a home.

I have mixed feelings on this, but you're on the right track...per readily available statistics, Gen 'Y' is purchasing homes at an early age much faster than Gen 'X' ever did. A lot of it has to do with the fact that while there is a large underclass in Gen 'Y', salaries in many circles are higher than ever...thus allowing 'Yers' to afford homes. Also, Boom parents often show their largesse, and bestow large downpayments on their progeny...thus giving them a leg up. Unfortunately, that could be a problem, as the Boom really needs that money to save for retirement. I definitely agree with you on your second point...while many of you disagree, I really think that a large portion of Gen 'Y' is biting off more than they can chew, and are purchasing homes they really cannot afford. If you are making $40K a year, or maybe $2,500 a month post tax, even a small condo is unaffordable in most major metro areas...it's virtually impossible to get a mortgage plus other expenses equaling less than $1,000 a month. And that's another fear. I think too many 'Yers' see their friends buying, so they feel they can afford it, when they really can't. (As I said, I know many of you disagree, but the numbers look very scary).

We're now seeing that much Gen Y can't even afford the basics of being middle class since the costs of rent, food, utilities, gasoline, education and healthcare are just spiraling out of control at the same time wages are flat or falling.

To some degree, yes. There are larger numbers which have higher salaries than previous generations due to more rapid advancement in the workplace and higher salary expectations. But those who get left behind are the ones who struggle.

Most of the 20-somethings I know even with professional jobs still live with their parents and those who live independently almost all have massive debt.

To be fair, a lot of them are saving money for large purchases such as homes...which can be a good thing...although I do worry that many who have never lived on their own are unaware what it means to have a mortgage.


Even so, I can't hold younger people blameless. The majority of Gen Y is too entitled and often misclassify "wants" as "needs". Far too many have new cars, ipods, and expensive clothes despite the fact they're failing financially.

AMEN! HALLELUJAH!!!!!!!!!!!!!!!!!!!!!!!!!!!! :) :) :) :)

[wordsmith]

I think the lamest thing in the world is young people getting pissed off at older people for not retiring. Nobody OWES it to you to retire and give you their job. People my parents' age who are still working are most of the time not doing it b/c they have an undying urge to hog jobs, they're doing it b/c they have no choice.

[yankeeyosh]

I think the lamest thing in the world is young people getting pissed off at older people for not retiring. Nobody OWES it to you to retire and give you their job. People my parents' age who are still working are most of the time not doing it b/c they have an undying urge to hog jobs, they're doing it b/c they have no choice.

I never said it's bad that they want to continue working. The problem is that they did not save for retirement, and therefore, cannot retire.

[wordsmith]

Didn't or couldn't. I know which was the case in my household.

[and1grad]

I think the lamest thing in the world is young people getting pissed off at older people for not retiring. Nobody OWES it to you to retire and give you their job. People my parents' age who are still working are most of the time not doing it b/c they have an undying urge to hog jobs, they're doing it b/c they have no choice.
Totally agree. Talk about "entitlement."

[yankeeyosh]

Totally agree. Talk about "entitlement."

Again, I never said it was bad. I am continuing to be misinterpreted. Where the hell did I say it was bad that people work well past retirement. All I'm saying is that many people who would have retired cannot simply because of lack of funds, either due to money mismanagement, the inability to save, or another reason...large expenses such as medical care or tuition.

And I am seeing more and more evidence that this generation is more entitled than ever. The more I look around, the more I read things, I am further convinced that this disease (and I consider this to be a disease in a sense) is plaguing larger and larger blocks of this generation.

[pisces2473]

Mark, I don't think and1grad was talking to you. He was commenting on wordsmith's post--which wasn't really commenting on YOURS.

[WorkInProgress]

One of my professors had a fairly elaborate theory about how, due to unions and some New Deal programs, the Depression generation was the only large cohort in America to achieve real financial stability. Nonetheless, a lot of us (naturally) would want the same thing, rarely realizing why it's unnattainable. I'd still like very much to believe that she was wrong, but looking at the quality/cost of my life, as it compares to how much I work and how much debt it's taken me to get to where I am, I do sometimes wonder.

I've not done any serious research on this, and I don't have a very elaborate theory at all, just an inkling, from conversations, news articles and bits of information from random classes that have coalesced, and I actaully pretty much agree with that.

I do think that individuals can (maybe not often, but at least some of the time) do this on their own, if they're able (like, can realistically save) and willing to make sacrifices now for future financial stability. Some people can't because they have already slimmed down budgets as far as they can go, but some (and quite possibly a lot) just don't, which is not the same thing.

[AshleyJordan]

I do think that individuals can (maybe not often, but at least some of the time) do this on their own, if they're able (like, can realistically save) and willing to make sacrifices now for future financial stability. Some people can't because they have already slimmed down budgets as far as they can go, but some (and quite possibly a lot) just don't, which is not the same thing.

That I agree with, and even though I kvetch about my modest income and high student loan debt, I feel I'm doing OK in that regard. . . . packing a lunch, living in a cheap apartment, buying (designer) clothes at the discount stores, etc., so that I can pay down my loans and save for a condo. I still consider myself pretty lucky to be able to achieve this balance though. . .

[pisces2473]

That I agree with, and even though I kvetch about my modest income and high student loan debt, I feel I'm doing OK in that regard. . . . packing a lunch, living in a cheap apartment, buying (designer) clothes at the discount stores, etc., so that I can pay down my loans and save for a condo. I still consider myself pretty lucky to be able to achieve this balance though. . .
Yeah...I do the same...just waiting to start saving though...

[WorkInProgress]

That I agree with, and even though I kvetch about my modest income and high student loan debt, I feel I'm doing OK in that regard. . . . packing a lunch, living in a cheap apartment, buying (designer) clothes at the discount stores, etc., so that I can pay down my loans and save for a condo. I still consider myself pretty lucky to be able to achieve this balance though. . .

I do ok, but I certainly could slim down more than I already have. It's on the top of my list of things to do after the holidays.

[AshleyJordan]

I'm pretty sure what's keeping me afloat is:
1) Not needing a car and having pre-tax transit paid for by my org, and;
2) Dirt cheap health insurance.
Otherwise, I'd be f*cked.

[capella]

For me and my husband... we're (or I'm I should say) planning something fairly drastic to get out of debt. Some of it we racked up last summer with the yard fiasco. Some of it was legitimate debt from when we got out of school and couldn't afford to feed ourselves. Regardless, we've got debt and it's not going anywhere any time soon.

Option A: We stay where we are and it will take us a good 3 years to pay off just the credit card debt (which is embarrassingly high now). That's while living paycheck to paycheck and not spending money on ANYTHING. Clothes, entertainment, trips, or anything unforeseen. Not a good option in my book.

Option B: We move to Texas to teach where we'll make about, oh, $20,000 more a year together. I teach for one or two more years (taking maybe one class a semester, which sucks but what are ya gonna do). I ran the numbers and if we rented a small one bedroom for around 600 a month we could pay off our car, credit card debt, and a private school loan of 5K within the first year. We could pay off the rest of our school loans in half the next year.

He doesn't want to rent. I say I'd rather get in a better financial situation and worry about house prices later. I want to rent for a few years so that I'm not locked into teaching because I need the money. The only way for us to live on one income is to pay 600 a month for rent and have no other debt. The biggest reason I can't make any changes here is that we can't afford to move and we don't make enough money to live on one income. Renting or otherwise in this area.

He's afraid the housing will explode there too (I told him it's not likely) and that we'll be priced out there as well. That's the biggest reason we bought when we moved here. We knew (and were correct) that we'd be priced out of buying anything in this area. I'm gambling on the fact that the housing market will stabilize and that going to grad school will pay off. It will be at least 4 years before I'd be done. That makes me 30 and starting a new career.

Blah! That's how it is for me. I am glad at least I have the option of exploring other ways around our problem. I think it's a matter of being able and willing to find an alternative path to where you want to be. Not everyone is able and not everyone is willing to make big changes or sacrifices to fix the problem. I'm fortunate that I have an option here. Now if my dear hubby will get over the ego hit of not owning a home for a while. Ugh.

[WorkInProgress]

Amy, I'm not sure if it'll help, but in any event, my parents didn't own their first home until I was in middle school. We rented before then. Didn't make them less responsible as adults or parents, and it hasn't ruined them financially either.

[capella]

Amy, I'm not sure if it'll help, but in any event, my parents didn't own their first home until I was in middle school. We rented before then. Didn't make them less responsible as adults or parents, and it hasn't ruined them financially either.
Oh, it's not me that has an issue with renting after owning our home. I grew up in apartments and neither of my parents has owned a house yet. It's my husband. I think it's more an in his head thing than anything. I'm willing to bet I know him well enough that he'll be fine with an apartment once we get there. He's not really a risk taker and it's a lot of change in a short period of time.

[wordsmith]

FYI, from earlier, I wasn't criticizing Mark.

[analogman]

For me and my husband... we're (or I'm I should say) planning something fairly drastic to get out of debt. Some of it we racked up last summer with the yard fiasco. Some of it was legitimate debt from when we got out of school and couldn't afford to feed ourselves. Regardless, we've got debt and it's not going anywhere any time soon.

Option A: We stay where we are and it will take us a good 3 years to pay off just the credit card debt (which is embarrassingly high now). That's while living paycheck to paycheck and not spending money on ANYTHING. Clothes, entertainment, trips, or anything unforeseen. Not a good option in my book.

Option B: We move to Texas to teach where we'll make about, oh, $20,000 more a year together. I teach for one or two more years (taking maybe one class a semester, which sucks but what are ya gonna do). I ran the numbers and if we rented a small one bedroom for around 600 a month we could pay off our car, credit card debt, and a private school loan of 5K within the first year. We could pay off the rest of our school loans in half the next year.

He doesn't want to rent. I say I'd rather get in a better financial situation and worry about house prices later. I want to rent for a few years so that I'm not locked into teaching because I need the money. The only way for us to live on one income is to pay 600 a month for rent and have no other debt. The biggest reason I can't make any changes here is that we can't afford to move and we don't make enough money to live on one income. Renting or otherwise in this area.

He's afraid the housing will explode there too (I told him it's not likely) and that we'll be priced out there as well. That's the biggest reason we bought when we moved here. We knew (and were correct) that we'd be priced out of buying anything in this area. I'm gambling on the fact that the housing market will stabilize and that going to grad school will pay off. It will be at least 4 years before I'd be done. That makes me 30 and starting a new career.

Blah! That's how it is for me. I am glad at least I have the option of exploring other ways around our problem. I think it's a matter of being able and willing to find an alternative path to where you want to be. Not everyone is able and not everyone is willing to make big changes or sacrifices to fix the problem. I'm fortunate that I have an option here. Now if my dear hubby will get over the ego hit of not owning a home for a while. Ugh.

I don't know when you bought your house (i.e. how much equity you have) and what kind of a loan you have but I would venture to guess right now is not a great time to sale. Can you hold on to the house and rent it out? There might be some negative cash flow implications but long term it could make sense. You would be building equity in the current house. By the time you are ready to buy (I am guessing maybe 4 years, after you finish grad school?), if prices haven't gone up, interest rates most likely will have so that would make a house more expensive. It is conceivable that keeping the house would be a better financial move; just thought I would mention it.

*This post is predicated on numerous assumptions (most important being you have a fixed-rate loan); feel free to disregard if non-applicable.

[capella]

I don't know when you bought your house (i.e. how much equity you have) and what kind of a loan you have but I would venture to guess right now is not a great time to sale. Can you hold on to the house and rent it out? There might be some negative cash flow implications but long term it could make sense. You would be building equity in the current house. By the time you are ready to buy (I am guessing maybe 4 years, after you finish grad school?), if prices haven't gone up, interest rates most likely will have so that would make a house more expensive. It is conceivable that keeping the house would be a better financial move; just thought I would mention it.

*This post is predicated on numerous assumptions (most important being you have a fixed-rate loan); feel free to disregard if non-applicable.
We do have a fixed rate loan. We owe 166K on the house. We're trying to sell it for 190-195K. We're not going to make a lot of money on it.

I do NOT want to rent it out. I don't want to be responsible for someone else's place. Especially not when I'm living out of state. I realize it's not the best time to sell, however, I am looking at what is best for us in the long run. We're going to be adding to our annual income by $20,000 doing the same jobs we do now. I don't think waiting will earn us that much on the house in a year.

And the longer I wait to start grad school the longer it takes me to finish and get settled in a new career. And we've got to find a way to fit kids into all this mess. *sigh* Life can be complicated.

[wordsmith]

I wouldn't be a landlord from three states away.

I wouldn't be a landlord at all. My parents rented two homes in a neighboring town when I was young. What a pain.

[analogman]

We do have a fixed rate loan. We owe 166K on the house. We're trying to sell it for 190-195K. We're not going to make a lot of money on it.

I do NOT want to rent it out. I don't want to be responsible for someone else's place. Especially not when I'm living out of state. I realize it's not the best time to sell, however, I am looking at what is best for us in the long run. We're going to be adding to our annual income by $20,000 doing the same jobs we do now. I don't think waiting will earn us that much on the house in a year.

And the longer I wait to start grad school the longer it takes me to finish and get settled in a new career. And we've got to find a way to fit kids into all this mess. *sigh* Life can be complicated.

I was thinking more along the lines of being a landlord through a management company. I have co-workers who have done it for 5+ years with houses they own out of state and it seems to work well for them.

Selling the house is certainly the less complicated way to go and I can appreciate needing to un-complicate life.

[pisces2473]

I was thinking more along the lines of being a landlord through a management company. I have co-workers who have done it for 5+ years with houses they own out of state and it seems to work well for them.
Yeah, but that costs money too...

I think Capella and her husband just want to erase Florida from their minds.

[wordsmith]

Yeah, that all seems needlessly complicated in a really unappealing way.

But, then, to me, so does homeownership, so there's that. :)

[capella]

Yeah, but that costs money too...

I think Capella and her husband just want to erase Florida from their minds.
Yupper. It served its purpose and got us certified for almost nothing. I didn't pay a lick to be certified and S only paid $1000 over a year. We're done, Florida. Uh, Buh-Bye. :)

[pisces2473]

But, then, to me, so does homeownership, so there's that. :)
Hee, me too. Nailing down a move in date with my current landlord was crazy enough. So is trying to hook up utilities. 3 calls to AT&T and I still can't set up my effing phone.

[Initial_D]

i know a guy who graduated from college with 10K debt, 4 years ago. was making 33K when he started, living in pricey southern california, working at a public university.

was living paycheck to paycheck. contributed a measly $100 a month to a Roth IRA that a buddy that worked as a financial rep. a year after working he finally started contributing 8% to his 403b. was buying all sorts of gadgets and going out.

then, he grows up and realizes what's important. hurricane katrina did it for him. he sells a lot of his possessions, especially the ones that he doesn't even use often enough (ie PDA, video games)

now makes $39k/year, moved to a cheaper place last year (saved him about $400 a month but has to live with 2 roommates in a not-so-glamourous apartment)

paid off his debt last year, and even though he makes a good enough living, he gets a second job at banana republic, where he used his discount to get an entire new wardrobe there, manages to save $1k in cash a month, puts $700 in retirement. rarely eats out at restaurants, stopped drinking, spends his free time doing charity work, splurges now and then on things he really wants,

he's 26 and has no debt, saves over 12k in cash a year, yet he still treats himself to some very nice things and vacations (just goes to cheap places and shelter with friends)...it's definitely possible to change your ways and live within your means. cause before he would upgrade to the latest and greatest but nowadays he doesn't even care for HDTV, PS3 or anything materialistic!!

[rodski]

I'm sorry but does anyone feel sorry for Tolu and his credit debt problem? Anyone smart enough to get his MBA ought to be smart enough to understand that putting $35,000 on a credit card to travel the world will eventually have to be paid back. Who wouldn't want to travel the world over 2 years on credit and not pay for it right away... That's fine but don't whine about having to pay it back, especially when you have a job that pays over $100,000.

Why usatoday even did a story on this guy is beyond me. I had about $20,000 in college debt 12 years ago and he has $25,000 now?? Big Deal!!

Seems to me like a lot of young people who are in debt other than college loans is becsuse they want everything now. Instead of driving a 10+ year old clunker while in college and cheap clothes, they drive new leased cars and SUVs, wear Polo and other designer clothes, wear expensive jewelry, own $250 iPods, etc...Do I need to go on??

I won't say how it was back "in my day" i'm only only 34 but things have changed a lot since then. Don't get me wrong everyone seems to spend a little more then they have myself included, but be smart. If you are smart enough to graduate college then you are smart enough what you are doing. Maybe its all these new "helicopter" parents that don't let their kids learn for themselves and do everything for them, then it's too late and people end up here complaining about their debt. Let's hear it!!

[Winter Storm]

I had a funny feeling the other day that this thread was gonna be resurrected. :rolleyes: