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My wife and I are in our early to mid 30's and we've already checked off the first 3 items on your list twice. I do feel sorry for people in their 20's because they were born at the wrong time. I don't feel sorry for other 30-somethings who blew the first 10 years of their income on partying and now complain that they can't afford a house.
Many people in their early 30's had a hard time finding stable full time employment that paid more than a survival wage. It's pretty hard to save for a down payment when you make less than $50,000/year and have student loans to pay off. Just dismissing everyone who complains about not being able to afford a house as blowing their money on partying is short sighted.
While i think advice from all is helpful to varying degrees, The "do as i did" doesn't really work for those in their mid-late 40s. Especially if you bought your 1st place in the late 90s etc.
While i wont swing as far as Parsec in the "Blew their 1st 10 years" I also do have less sympathy for those in their 30s who are complaining about not being able to afford a house.
I am mid 30s and in my second house in a well thought of town. Our combined incomes were low (i make more now that we did combined) when we bought our 1st house in 2006 (with <10% down) and only we ended up selling for ~$10k more than we initially paid ~7yrs later. As we got raises, we just applied the increases to our retirement accounts and mortgage equally. This allowed us to have >20% down on our second house. I don;t know if thats helpful to anyone, but I think thats the path most took in my age bracket who can now buy the $600k-$700k houses.
Location: RI, MA, VT, WI, IL, CA, IN (that one sucked), KY
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Quote:
Originally Posted by Dm84
Many people in their early 30's had a hard time finding stable full time employment that paid more than a survival wage. It's pretty hard to save for a down payment when you make less than $50,000/year and have student loans to pay off. Just dismissing everyone who complains about not being able to afford a house as blowing their money on partying is short sighted.
True. That's not that uncommon among 40 somethings as well. I can now afford to buy a condo, I think, but with moving and changing jobs every few years (something I needed to do) for my 30s, it wasn't at all feasible. It also helps a lot to be married and have two incomes, and most people I know in my social group aren't married. People are pretty fortunate of any generation if they haven't been had to move around for work, and have had stable employment with increasing salaries, or they weren't burdened with student debt (I lucked out there, yay state schools).
While i think advice from all is helpful to varying degrees, The "do as i did" doesn't really work for those in their mid-late 40s. Especially if you bought your 1st place in the late 90s etc.
While i wont swing as far as Parsec in the "Blew their 1st 10 years" I also do have less sympathy for those in their 30s who are complaining about not being able to afford a house.
I am mid 30s and in my second house in a well thought of town. Our combined incomes were low (i make more now that we did combined) when we bought our 1st house in 2006 (with <10% down) and only we ended up selling for ~$10k more than we initially paid ~7yrs later. As we got raises, we just applied the increases to our retirement accounts and mortgage equally. This allowed us to have >20% down on our second house. I don;t know if thats helpful to anyone, but I think thats the path most took in my age bracket who can now buy the $600k-$700k houses.
Best advice in this thread so far. I don't apply all of my salary increase towards retirement and non-depreciating assets, but I do save about 90% of it. I spend 10% of it to reward myself as motivation to keep working harder.
I was harsh with my "blew their first 10 years" comment, but it's true for a lot of people if they don't have to support anyone besides themselves. The only reason I started saving early is because I had kids early. Having mouths to feed is what knocked common financial sense into me.
My husband and I had very rocky career starts. We had a few very lucky breaks and he was able to change careers and was in a good position a few times. We've also moved a few times due to his career. We just bought a house that was way more expensive than I ever thought we'd own (or wanted to pay) in a town we didn't think we could afford not all that long ago. However, if we had not had these lucky breaks, I could very easily see how we would be completely screwed. Had things gone the other way for us, we could very well have been in a position where we probably would not be able to afford even a 500K house -- maybe not even a 400K house. And if somehow, we were in the Boston area in that situation I don't know where we'd live. We'd certainly have to be very far out from the city.
And yeah, I could see us in a situation where, at best maybe we'd make a combined $140K -- heck, I could see us in a situation where maybe we would not even make a combined $100K, and on top of that have student loans. Where would we ever find a house that was less than $100K, if we were to follow that advice of never paying more than your income for a home? I mean, damn -- if you are lucky enough to make $300K, which would be a very good salary, and more than most people make, I don't even know where you'd find a decent house for $300K.
The only reason I started saving early is because I had kids early. Having mouths to feed is what knocked common financial sense into me.
While I agree with you 100% and understand the point you are making, I can also counter that i've seen plenty of parents put themselves in financial turmoil due to over-reaching themselves to provide the "best" for their kids.
I have friends that almost insist that you NEED to bring your kids to Disney virtually every year, or need to buy them this, that and the other thing. I have a coworker who complains every day about money problems, and yet insists on sending his kids to expensive private schools (the kids are 5 and under) despite the increased stress it leads to for him and his wife. I've got older friends that stuggle due to their kids sports schedules and equipment needs. If any of you have boys that play hockey, you'll know that's not cheap.
While I also feel that you should always put your children first, it seems the standards get raised every single year. I'm 35, but when I was in HS, most kids bought some run down $1K beater as their first car. You worked a part-time job to pay for your gas and insurance, and most of my peers in college took out student loans.
Nowadays, I see families providing their kids with cars and paying cell phone bills and car insurance and paying 100% of the college tuition. It's one thing if the family can comfortably afford this, but another if the family is financially strained and only doing these things because they have to keep up with the joneses.
I remember commenting somewhere that parents shouldn't feel obligated to pay for a child's college education, and was practically demonized for it. It's one thing if you are financially comfortable and have been financially planning to do such a thing, but I know a few families living paycheck to paycheck that feel like they need to pay for it, and to further my point, paying for college is usually something that pops up in a divorce decree more than often as a requirement.
Being the MA subforum, I'm sure we are all familiar with the never ending "what schools (or town) is the best for my kids?" threads.
My wife and I are in our early to mid 30's and we've already checked off the first 3 items on your list twice. I do feel sorry for people in their 20's because they were born at the wrong time. I don't feel sorry for other 30-somethings who blew the first 10 years of their income on partying and now complain that they can't afford a house.
When you're right, you're right. My wife and I are in my early- to mid-30s and you've basically described us to a T, except that we blew our first 10 years of income on an even worse investment than partying: education. Our monthly student loan payments, even on an income-based repayment plan, are roughly equivalent to the mortgage on a 300K house. And that's with a full academic scholarship to college and a need-based half-tuition scholarship to law school.
Unfortunately, I'm not really sure what we could or should have done differently. I went to law school because there wasn't a very lucrative market for my journalism degree (majoring in communications was a condition of my scholarship), and my undergraduate curriculum ruled out better long-term investments like medical school. And frankly, I'm not sure that I would have found steady work as a lawyer if I hadn't gone to a ranked private college, because recruiters tend to use college admissions standards as proxies for deciding which candidates are best-suited for the job. As for my wife, she could have avoided student loan debt like many of her high school classmates, but then she wouldn't have been eligible for her low-paying and emotionally fulfilling career. Most of her female classmates who didn't attend college are housewives or work part-time for low wages. Many are on public assistance. It's really impossible to tell whether we would have been better off avoiding student loan debt and hoping to stumble into stable careers without degree requirements. But at the time, we certainly didn't foresee that the concentration of service-industry jobs, income inequality, and other market forces would lead us to a place where we would be priced out of johngolf's starter home and have an extremely limited ability to save.
The way I see it, my wife and I made three fatal errors on our path to financial success: (1) we married each other, instead of going our separate ways to form one of those "power couples" that can afford $750K homes; (2) we both slid down the birth canals of parents who didn't provide college funds, instead of holding out for different sets; and (3) we had children (who will also be disadvantaged by our own inability to save for their education, thus perpetuating the cycle). Number two actually seems to be our biggest mistake. Based on many of the posts I've seen here and in other forums, I'd wager that most of those folks went to college, but didn't pay their own way (or they paid their own way, but had the luxury of living at home rent-free after high school).
My husband and I had no life in our 20's. I worked full-time and went to college full-time until I graduated, then poured all my energy into my career. My husband studied and passed all of his actuarial exams in his 20's, which took at least 7 years. But by the end of it all, we were doing pretty well. We rented as cheaply as we could to save money. In fact, we still have the car I paid cash for when I was 21--it has 252K miles on it. We love that car. Honestly, there were times in my 20's where I felt we were never going to save the six figures we needed for the 20% downpayment on a house around here. We had no help at all--not for the wedding, not for our house, not for my college debt I incurred despite working full-time through college. The one thing we did spend money on (and I'm really glad we did) was travelling. We traveled as cheaply as we could, but I'm so glad we took the trips we did because they're probably my favorite memories of my 20's.
We budget for our kids' educations because I started out my post-college life in debt and it sucked living on rice and beans to get out of it. I don't want my kids to have to do that. On the other hand, the fact that my first car was a beater (heck, my current car is a beater), that I had to pay for my own gas, pay for my own education, etc. was a very valuable lesson.
Now that I'm in my mid-thirties (34) with 2 kids and my husband and I have good careers, I have no desire to upgrade my home (other than the typical home renovations). Instead, we pay extra toward the principal every month so we can get this mortgage paid off and be 100% debt free. There are times when I would love nothing more than to sell our house, take the equity and pay cash for a house in a place with a lower cost of living, but there is too much I love about the area to really do that.
Last edited by NewfieMama; 04-27-2016 at 12:11 PM..
While i think advice from all is helpful to varying degrees, The "do as i did" doesn't really work for those in their mid-late 40s. Especially if you bought your 1st place in the late 90s etc.
While i wont swing as far as Parsec in the "Blew their 1st 10 years" I also do have less sympathy for those in their 30s who are complaining about not being able to afford a house.
I am mid 30s and in my second house in a well thought of town. Our combined incomes were low (i make more now that we did combined) when we bought our 1st house in 2006 (with <10% down) and only we ended up selling for ~$10k more than we initially paid ~7yrs later. As we got raises, we just applied the increases to our retirement accounts and mortgage equally. This allowed us to have >20% down on our second house. I don;t know if thats helpful to anyone, but I think thats the path most took in my age bracket who can now buy the $600k-$700k houses.
There is a massive difference between those who are in their mid to late 30's, and those in their early 30's. When I graduated in 2007 there was a 3-5 month hiring window in my industry before it started contracting (R&D dollars evaporated long before broader markets reacted to the impending recession). Of those who managed to land jobs after graduation, a good 40-50% were laid off around 2009-2010. Those who were lucky, such as myself, weathered numerous pay cuts (which dinged savings, but didn't pause my career/resume). For many of my peers, they're just starting to build a career/resume 7-8 years later. Many talented/hardworking people in the 28-31 age bracket were absolutely set back by the recession, and continue to be set back in the form of limited wage growth. They deserve some empathy and not smug responses from Gen-xer's who were lucky enough to leverage the growth between 2001-2007.
Last edited by Shrewsburried; 04-27-2016 at 12:18 PM..
There is a massive difference between those who are in their mid to late 30's, and those in their early 30's. When I graduated in 2007 there was a 3-5 month hiring window in my industry before it started contracting (R&D dollars evaporated long before broader markets reacted to the impending recession). Of those who managed to land jobs after graduation, a good 40-50% were laid off around 2009-2010. Those who were lucky, such as myself, weathered numerous pay cuts (which dinged savings, but didn't pause my career/resume). For many of my peers, they're just starting to build a career/resume 7-8 years later. Many talented/hardworking people in the 28-31 age bracket were absolutely set back by the recession, and continue to be set back in the form of limited wage growth. They deserve some empathy and not smug responses from Gen-xer's who were lucky enough to leverage the growth between 2001-2007.
i was smug? i actually thought i was pretty level.(and i finished grad school in '05 so.....)
there were a ton of layoffs in my industry and institution. Places tend not to lay off top performers unless they are cutting whole groups. stay in that top bracket and you tend to fair well. But thats a whole different topic.
oh. and I'm technically on the border between Gen-X and Millennial (which blows my mind).
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