Younger people in the workforce are not saving as much as the baby boomer generation did. We, as young people, millennials, do not have a high enough emphasis on saving for the future. We live more for the right now and we have a huge issue with instant gratification.
I am at fault for this myself as right after we moved we already had one TV. It was big enough for our family. I needed to go out and buy an even larger TV for the new house. Now, the kids had one TV and we had another TV. Instead of investing $1,000, which is what I should’ve done, I turned around and bought a flat-screen TV. Even worse, I put it on a Best Buy credit card for 0% for 18 months. I didn’t use my own money, which was probably smart. I put it on a credit card only at 0%. It was the only way I could reason with it and justify spending that kind of money.
Priorities Have Changed: Baby Boomers vs. Millennials
I don’t feel as bad as I should because there’s cash in the bank to pay for that, but if I get 0% why not use it? Although I still feel incredibly guilty because it is going backward. It’s not helping our family move forward. I wonder what the baby boomer generation would’ve done if they had an opportunity to buy a $1,000 TV. Would they have done it or not? I would like to think that they would’ve passed on the opportunity to get a larger TV and saved the money for retirement.
If you read another article that I wrote on RMDs and the pressure that’s going to have on the market, you will see that the RMDs will be drawing down investible assets across the United States over the next 20 years. I am fearful that our younger generation and myself will not be able to backfill the amount of money needed to maintain the market.
Spending Habits Can Change: Lessons Are Learned
I read a blog on consumption in America called Mr. Money Mustache where he lays out how he only lives on $27,000 a year and rides his bike everywhere. They have one car. It sounds amazing.
I need to decrease this spending personally so I don’t make the mistake again of buying a large-screen TV or the next toy that goes down in value. That money would’ve been much better spent going on a vacation with my three kids for three or four days and having quality family time instead of a TV that hangs on the wall. The lesson is starting to be learned.
What will you change as it relates to your spending habits and are you saving enough?