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There's only so much a person can sacrifice. Plenty of areas are unaffordable. Many areas of what is affordable today are filed with gangs, drugs, violence, etc.
I live in an upper-middle class area now. But it’s only after years and decades of living in working class and lower middle class areas.
Everybody has to pay their dues. There’s no free lunch.
The people who keep pointing out though "I was able to do this because I worked while in college" keep ignoring the vast difference between what we paid back in the day and what students pay now. Like I said, my school was $16,000 a year back then, it's $42,000 a year now, and the requirement is a year longer because it's now a Masters. It's a whole lot different paying $64,000 for school vs $200-some thousand. Salaries are really not all that much higher now than they were then because demand vs supply is not as high as it was then. Certainly ot anywhere 3 times higher. Plus I also was able to save more than because my health insurance was free, while now it's several hundred per pay period.
Not to mention up until the 60's a college degree guarantied you an middleclass lifestyle no matter what you majored in, up until the 90's it guarantied you ATLEAST a lower middleclass lifestyle, Now there are people with multiple degree's who go to work everyday to ask "do you want fries with that?" because the job market is flooded with people with a college degree. where in the past(up until the 60's) less than 15% of the population had one.
All of those arguing that it is impossible to get a college degree without amassing a huge debt, are aware that it is possible to earn a hefty living without having a college degree?
This country is full of people who own their own house and never went to college.
Sure, but keep in mind that many jobs that pay a lot without a degree are physically demanding. Many young people now would not even qualify to join the military due to obesity or other physical problems. A lot of jobs have salaries that are location dependent as well. You may make way more in a union state than in right to work states doing the same job. It may also be that a particular area does not have as much available in terms of skilled trades.
Sure, but keep in mind that many jobs that pay a lot without a degree are physically demanding. Many young people now would not even qualify to join the military due to obesity or other physical problems. A lot of jobs have salaries that are location dependent as well. You may make way more in a union state than in right to work states doing the same job. It may also be that a particular area does not have as much available in terms of skilled trades.
and even in the few cases where a non union job does pay more, you are forced to live like you make less because you have less job security so you are less likely to put yourself in debt for a nicer house incase you loose your job, and all it takes is your boss to have a bad day or a change in management who want's to one by one replace everybody.
My wife and her three children graduated with no debt. I graduated with < 50k and had it paid off in 4 years. 2 of my 4 co-workers who graduated recently had no debt. My best friend bought a starter home when he was 25 and now, at 37, owns a home valued over $500k in a better area. Etc.
Here are facts:
- If somebody is not going to be making a large amount of money with their degree from their school, they need to re-evaluate what they are paying for,
- If it's a high COL state, numbers are increased, and if it's a low COL state, numbers are decreased.
- Student loans don't need to be paid off before becoming a homeowner, it's simply a better situation if they are,
- How much debt are these people taking out if I'm made to believe that they're living frugally, gainfully employed, and are taking that long to save for a down payment? You cite an example of two people who lived at home for several years in order to pay down debt and save for a home. If they're not paying rent or utilities, where is the money going? If they are, I can't imagine it's more than what I gave in my example. If they have 6 figures of debt and are making 28k a year, see my first point. If they have 40k in debt and are making 35k a year, why did it take so long to pay it off?
My example is not far-fetched.
How old are your wife and her children? I think anyone who has not had to pay a college bill after 2008 doesn't really grok the problem.
I will say this again: after 2008 college costs skyrocketed. The AVERAGE annual increase in cost of attendance since then has been 8%. In many cases it's an annual increase of 10-13%.
If college was a stock we'd all be rich. Who wouldn't want an investment that increases 10% per year?
As others have noted, today, community colleges cost more than universities used to.
I have a different perspective now than when I was 23 and fresh out of school. I agree with a lot of what you're saying. To play devil's advocate, I think it is still possible to make it work. A lot of people aren't willing to make the sacrifices needed to get there though. And that's the devil's advocate part of my story.
For instance, I graduated with $50k in student loans and made approximately $30k/yr. in my first job. Those first few years out of college starting in 2008 were tough. With a $525/mo studio apartment, a $350/mo student loan payment, and a $280/mo car payment, I had about $500/mo left over after all food and other expenses were paid. That was what I considered "play money", and it didn't last very long. Fortunately, I was very frugal.
As the years went by, rents starting going up in the city I was living, as it was becoming "the next big thing". So I started slowly drifting out of the urban core and eventually found myself living in suburbia in my mid- to late-20s. It wasn't great for my social life, but I made it work. It probably also helped to keep the costs down since there weren't a lot of attractions nearby to spend money at. I lived this way until I bought my first home.
This is where a lot of people get tripped up. A lot of people in their 20s want to live in the trendier, more expensive areas. They want to go out a lot, which often is accompanied by more expenses. So while I kept moving further and further out to keep my rent well below what I could afford, others don't do this. As a result, they forego saving money that could be used to pay down debts and/or for a down payment.
Another thing that people get tripped up on is their unwillingness to "start small". My first home purchase was a 2BR/2BA 1000 sq. ft. condo without a garage in the suburbs for $180k I had a roommate to keep expenses low. When I started dating my wife, it was the three of us under that one roof for quite a bit of time. When I planned on marrying my wife, I started shopping for an upgrade to a townhome. We ultimately landed on a 2BR/2BA 1500 sq. ft. townhome with a 1-car detached garage for $285k. The roommate came along to live with us in the 2nd bedroom. Between the three of us, it helped keep costs low. When the roommate moved out on their own after we married, we decided to look for a SFH. We now had the equity and income to buy a SFH which ran close to $500k in our area.
This didn't happen until my mid-30s. But I made a lot of sacrifices so that it could happen. Whenever I try to give advice to others, such as my younger sister, she snubs her nose at the idea at living in a condo to start off in, because "she doesn't want to move again". A lot of people share her unwillingness to make sacrifices to get to her final goal of a SFH. So they scrounge up whatever loose change they have for a down payment and hope that it keeps up with the home prices in their area.
With all that said, I'll add the caveat that it was a painstaking process and I had my fair share of grievances along the way. So this isn't to discount anyone's struggle. It's real, and I get that, as I personally lived it.
Grinded your way up the ladder! Very admirable!
I graduated with no loans, spent 70K+ on an undergrad business degree. If I couldn't pay the tuition I'd put it on my credit card, then have it paid off before my next semester. Figured higher interest short term debt would be better than longer term low interest debt. First house I bought at age 24, older SFR needing about 25% of my purchase price in immediate upgrades. Sold it for 2.5X what I paid for it less than 5 years later. Bought brand new home, that is currently paid off and worth 3X what I paid for it.
Real estate doesn't always go up but it sure is nice when it does! I think renting hurts your overall finances if you don't have any "house wealth" to tap into years down the road.
40k a year is like $20/hour. Minimum wage in many parts is $15 an hour. How can someone who’s halfway motivated not reach that income by their late 20s?
$20/hour means you're getting about 13-15 of that 20 after taxes.
Many people were raised in environments where having a strong work ethic was a thing and working to do better for oneself just wasn't an issue, so they know nothing of it. They either work part-time work or just work when they can get some cash.
Not to mention up until the 60's a college degree guarantied you an middleclass lifestyle no matter what you majored in, up until the 90's it guarantied you ATLEAST a lower middleclass lifestyle, Now there are people with multiple degree's who go to work everyday to ask "do you want fries with that?" because the job market is flooded with people with a college degree. where in the past(up until the 60's) less than 15% of the population had one.
I agree. People with lower IQs were also mentioned earlier but it seems to be assumed most people have above average IQs. Those people back in the day still had jobs that allowed buying a house. Heck, my dad was able to buy a house and support a SAH wife a d two kids, on a department store appliance sales job. The equivalent to that job today would be working at Best Buy. The difference in salary, benefits, even a pension, is worlds apart. You can’t go buy “I was able to do this and that through hard work then” when the COL is so much higher now but salaries aren’t. I could never have afforded my degree now. I’d have been paying student loans till I was a senior citizen, forget a house.
My brother bought a house and supported SAHM wife while in a mechanics job at Goodyear. Today he would never be able to buy the same home at today’s equivalent home prices and today’s equivalent salary.
Of course there are always things people can do to better their lot But to ignore totally the difference in COL and buying power is pretty much “let them eat cake” to me.
I think renting hurts your overall finances if you don't have any "house wealth" to tap into years down the road.
I think it depends on how much your rent is in proportion to your net income. If your rent is low, and you have a good amount of disposable income, it is possible to experience larger net gains from other investments. Generally speaking, housing price inflation is slow and steady. What we're experiencing in the last several years is not generally the norm. But I would agree, I greatly benefited (and suffered) from the drastic home inflation of the past five years or so. I only wish I had got in sooner than I did.
And what if your kid isn't accepted? State schools do not accept all students. Far from it.
You have to start early in their lives and whip your kids into shape (figuratively). Read to them, dictate to them, use index cards, do a science project, practice kumon problems, etc. It’s not easy being a parent. You have to do all kinds of things to keep your kids motivated. Of course, you have to keep things fun along the way as well.
Hopefully, they make the grade and get accepted when the time comes.
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I think renting hurts your overall finances if you don't have any "house wealth" to tap into years down the road.
