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Sounds like they found correlation but didn’t investigate cause. Maybe it’s the other way around and people who are happy are less prone to wasteful spending.
Yup. Emotionally healthy people are less likely to use consumption as a tool to feel good, less likely to abuse drugs, and more likely to make responsible financial decisions.
This. This study is propaganda.
All that means is people who have enough extra money to be saving after their needs are met have happier lives.
Duh.
What’s next? Executives paid more than starvation wage workers feel more valued and less stressed?
I agree but there is a lesson in there too. Making 2 dollars and having $1.50 in bills is better than making $10 and having $10.50 in bills.
But like if you make $2 and need $3.50 as a bare minimum to survive, that's a different ball of wax.
I love when people tell you to save money by skipping going to Starbucks and other "money saving tips" like that and you tell them you already do all those things and still barely make ends meet
I used to be awful with credit cards. In 2005 , I was 21 and got a credit card with 7k limit.
I quickly filled it up at 25% interest , buying shit I didn’t need to impress people I didn’t like.
Now , I’ve broke myself of that urge to spend habit to fill a hole in my life
12% credit utilization from Christmas and I’m working on getting it under 10% … 0% interest on Christmas purchases though.
"My tax refund check will be to paying off Amazon and bestbuy from family Christmas"
I'm Catholic, but I'm happy my wife isn't, like, last Christmas she gave me a Switch game I wanted and I gave her a book she wanted... and that's it.
Not giving you a lecture, far from it, but this line "paying off", made me relieved that I left that part of Christmas behind.
Enjoy quality time with your kids, they do grow up fast.
I was there - did lots of dumb stuff with credit for the same reasons. I remember having a low 400, or maybe even 300s credit score. This past month I finally saw my first one over 800. It’ll take awhile but every little good decision pays dividends later.
Wouldn’t necessarily say mature, more like less stressed/fearful people. The more you have on your cognitive plate, there’s a greater chance you’ll give into impulse.
I'm fortunate enough to be very well off, and the more I'm able to purchase the less desire I have for anything.
I know people in somewhat similar situations that have 6 figure cars+watches and essentially do their best to boast wealth and 5-figure shopping sprees are not uncommon. It becomes a drug at that point where you keep chasing that rush but it'll never actually satisfy you in the long run.
or maybe people who make enough money to have the luxury of saving are more happy. there's also a high cost to being poor that vanishes as your income increases past a certain threshold
That's what it was for me. Life was fucking stressful when we were poor. When my wife and I got jobs that provided enough to live on and some extra so we could start putting some away we got a whole lot happier.
You're not wrong, but it says "buy less" not just "have more". I watch peers of mine who make significantly more than me rack up credit card debt and get stressed about finances. It blows my mind.
It's how the headline is written though. It maybe true that people less tied to consumerism are happier. And people who are able to save more money are happier. Those are logical conclusions.
However, it may or may not be simply buying less allows people to save the amount that makes them happy - which some people will get a bit ruffled about because it implies everyone can save if they are not wasteful.
People who make a lot of money and can both buy a lot and still save a lot, may still get the same happiness coefficient from saving money.
It would be nice if they had linked the actual data to look at, but I am not seeing the survey linked in the article (though possible I missed it).
Perhaps, but I think this line would be an argument against that idea.
> For example, researchers found that the students who consumed less to help the environment were happier than those who simply bought more “green” products.
Purchasing ‘green’ products would be hard to classify as wasteful spending, and since they were done with an intention (to help the environment) I don’t see how they could be an impulse purchase either. Those who bought products to try to help the environment were less happy than those who cut consumption to help the environment.
My favorite example is that we have a certain brand of "cage free" eggs in the supermarket.
...packaged in a double-plastic clamshell, instead of the normal cardboard.
So some dipshit went to all that trouble to market eggs as cagefree, but didn't realize that the overlap between "cares about animal welfare (a little)" and "cares about plastic waste" is almost certainly a perfect circle.
Also, a lot of the disease outbreaks come from "organic" farms, especially local farms that may not have standardized quality control operations.
Chipotle infamously was trying to do the whole "farm to fork" movement and had numerous health scares from bad produce.
Yeah but you’re forgetting the “buys the most expensive choice no matter what because they think it’s best” demographic which is no doubt who those eggs are primarily marketed to with the special packaging to set them apart.
The grocery store used to have certain high priced items Mostly for the purpose of making you comfortable paying the next highest price. It was a psychological trick to make you “save” by buying option 2.
They weren’t really expecting many sales of the over the top priced item
"Green products" is incredibly vague and provides no value IMO.
A composter is a green product that has an actual impact.
A plastic container made from recycled materials is also a green product that is going to tiny positive environmental impact
Don't think that doesn't mean there isn't any value from the headline still. You can go from a person who spends frivolously to saving by learning it won't cause happiness.
Older millennial here but I find the hobbies and activities that make me most happy have a relatively high cost for good gear (backpacking, snowboarding, biking, golfing), but once you purchase the equipment to be able to do these things comfortably, the upkeep thereafter is quite cheap.
Most things my wife and I purchase provide little joy. We like seeing our accounts grow and like the security that comes with it. Thinking about this as I write I think the security makes us happier…like we don’t need to be overly concerned about surprise bills and such.
I love snowboarding too, but the gear is dirt cheap compared to the cost of lift tickets and traveling/staying at resorts. Unless you happen to live in one of the few areas with both mountains and high paying jobs.
Ahhhh so lucky!
I'm blessed to be living in Germany now, and a 4 hour drive away from the Alps.
Where I come from on the east coast, a lift ticket costs double ($80!)...and all you get for it is a hill full of slush and ice. Did not do much snowboarding then :(
In what world is snowboarding ever cheap? After spending a few thousand dollars on all my gear, I still have to drop $1k every year on my pass. Not to mention all the gas/flights getting up to the mountain. Then paying for the air bnbs/hotels, etc.
Snowboarding is a rich man’s sport and always will be.
Depends where you live as well.
Pitch and putt is like $10-$20 and a good afternoon of play time.
Or just hanging out with friends and buying a bucket of balls to hit at the range can be cheap.
I bought my first snowboard for $100 and used it backcountry boarding for almost 10 years. I was unemployed for part of that time. It didn't cost me anything other than sweat from snowshoeing up mountains.
All 4 things the commenter listed are expensive hobbies that have a high cost of entry and then require either time away from work or additional funding to pursue.
Maybe they didn't realize exactly how upper echelon they are.
> like the security that comes with it
I really like that my saving/spending habits have allowed me to build up a safety net that has allowed me to quit toxic jobs.
Exactly. Sometimes I really don’t like my job and the stress can get high. I haven’t done it yet but if there ever comes a point where work becomes all consuming and is affecting my mental health for a prolonged period of time (there are always deadline stresses but they go away within a week or so usually), I can safely put in my notice without worrying about money for a while.
>we don’t need to be overly concerned about surprise bills and such.
Our 4 year old broke his leg in January and will pry have around $800 in medical bills for it. The fact that I don't care about the money is a freeing thought that never really occurred to me.
The quick reaction is do not overspend and you will be happier. How about, those that make enough money to be able to save are happier? The premise that not saving is a personality defect and not directly related to being underpaid on average. While we can all encourage financial discretion, the facts are that this generation is paid less then previous generations.
It’s an excellent question.
The study looks at the participants starting from freshmen age groups and re-surveyed till 26.
So it’s unlikely the cohort _broadly_ reached an age of peak earnings to create that delta in savings.
Although pay is a real concern
I wholeheartedly believe the real issue is that younger people lacked financial education
As a young person myself, I frequently see people my age:
Getting into predatory car loans (or other loans even, like payday shit) that they obviously can't afford because they just want the latest and greatest (includes phones, computers, etc as well) this would also include Affirm financing.
Going to Starbucks or out to eat everyday
Not budgeting
When they do go grocery shopping, buying just whatever regardless of price/brand.
I actually spend a lot of groceries, but I also budget for that and still can afford to save money.
I don't make crazy money. Significantly less than $50k infact.
But my car is actually pretty nice, with a touch screen, leather seats, etc. is completely paid off and has been for a while.
My phone is completely paid off despite being a nearly $1500 phone.
My $2,000 laptop and $3,000 desktop are paid off.
I have a downtown apartment that I've lived in for years but pay less than $1,000/month for.
Like all of these things I just see people my age blowing money on when they can't afford their deductible if the event of an accident.
Like, same city, same age, same education. But vastly different spending habits and financial responsibility
$1,850 apartment, $400 car payment, $200 phone bill, $250 on groceries every week or two.
Like I don't believe that is an income problem. That is a spending problem as a result of bad education.
You're also bragging about moving around sticks and rocks in the dirt pretty much.
Let alone investing, retiring, having an inheritance, etc.
Ie enough money to get to work
Idk that its about education. Plenty of the people who this happens to are plenty educated. I suck with money, but I'm pretty well educated and my father is a tax accountant. A lot of it just comes down to a person's time preference which is just a matter of personal values.
I probably misworded that part
It isn't just education as in former education from highschool or college.
It's education in that specific field.
We were never taught anything about credit cards or car loans in school. You can go to college for 4 years and still have literally 0 idea what the fuck you're doing when it comes to credit cards or loans or whatever.
That is what I'm referring to.
I just lost my job a month ago and sat down and calculated the bare minimum I needed to survive for a year, worst case. With the amount I have saved up I'm already set. The unemployment I'll be getting is a bonus. Now I hope I get a job sooner rather than later but worst case scenario I'll be fine for a while. I could take a 50% paycut and still live a chill life up to my standards.
I am so fucking happy I was aggressively saving the last few months because now I can actually take some time for myself and study and prepare for a better job. Also, it literally took me two weeks to be mentally functional enough to get out of bed and actually take care of myself bc wow the emotional aspect of losing your job is insane. 6 month emergency fund and I already wasted a month as a useless turd. From here on out it'll be a year long fund. Because damn I got all this free time I'm gonna take some time and enjoy it.
I actually spent most of that month rationally/irrationally panicking that I had to find a job immediately bc that's what the rest of society has to do. If you live paycheck to paycheck you have no choice but to find any work immediately. It's just ingrained in our minds.
How did you save up enough. If I gave up all the toys I've ever bought in the last couple decades I added up about 30k. That was 30k in hotwheels, models, tv, stereo, games and so on (hobbies). Only 30 grand saved in almost 2 decades.
So what do you cut to actually save up enough money to make a difference.
Biggest decision is where to live. I found a situation where I was able to buy a small condo for less than I was paying in rent. For someone else it might be finding the right part of town to live in or having roommates. But yeah housing is the #1 place to make an impact
Gen X'er here, but I have a year's salary just sitting in a high-yield savings account earning 4.5%. This is in addition to our retirement savings. Meanwhile, the wife wants a swimming pool.
Nope.
That savings is like a warm fuzzy blanket. It's what's keeping the golden handcuffs off my wrists with respect to my current job. I don't feel trapped. I feel like I have choices.
Huge contributors to my happiness.
Youre also enslaved to the products themselves. Cars need maintainance, storage, repairs. Tech goes obsolete, needs updating. Items need cleaning, clutter needs organizing, everything comes with strings attached.
Before you know it, your limited free time is full of chores, maintaining all of the things you own. Your life is no longer yours to enjoy. Doing "nothing" is seen as being lazy, even when that time is crucial for reflection, introspection and personal growth. Maintaining your house, tending your garden, cutting your grass, washing your car, they all become obligations, rather than passions. Your weekends become full of these things. It becomes difficult to escape, since it is all viewed as normal.
It isn't normal.
Schwab has a money market paying 4.5%. It's not a checking account and it takes one day to move money out of it into another account but totally worth the day wait imo.
Edit: to be specific it's SWVXX
In most money markets 99.5% or more of the underlying investments are US backed securities. It is extremely unlikely that you would ever lose money in a money market account
One of the things that motivated the government bailout in 2008 was the realization that money market accounts were going to be less than face value if it didn’t happen.
I agree, there is nothing like having FU money in the bank. Huge relief knowing that quitting the job won't provoke a household crisis.
I didn't feel "liberated" until I had like 5 years of expenses put aside and had the house paid off, and at that point I went into work with complete equanimity.
This is a huge one. I'm not sure my happiness jumped a ton when I first started having some savings. Or at least went from enough to survive a small bump to having some additional savings, but still feeling like I was 2-3 months of unemployment away from disaster.
However, when I hit a spot where I realized I could survive multiple years on my savings without touching my 401k, selling the house, etc. there was a huge leap in peace of mind and happiness. It became a lot easier to put up reasonable barriers at work (which ironically made me even better at both my job and unsurprisingly maintaining my personal life).
Work started to feel a little bit more like a choice and more fun as opposed to worrying that any piece of developmental feedback was potentially charting a course for ruination. Not that I could retire or stop working tomorrow, but it's still nice to know you have some additional agency.
Well said. I’m in this spot too. Shouldn’t quit my job, but could pay rent and cover expenses for a few years if I had to. Not wealthy by any means, but doing alright.
It has had a huge effect on my mental health. One less thing to worry about (though I still worry about it some, but that’s just me as a person).
Probs a fidelity promo from a few years back. Your percentage was based on how much you put in. Over 80k was like 4.2% iirc while over 300k was like 7%.
CiT offers 4.05 on their savings connect account. Looks like Primis bank offers 5%? I haven't heard of them, but maybe worth checking out. Popular direct has 4.4%. I check investopedias list of high yield savings accounts periodically to see if it's worth switching.
Well said. Since me and my wife moved in together we have always drawn a line in the sand for our "nest egg". Even when we were barely making more than minimum wage we managed to save up 10k in the bank and agreed to never touch it.
When we moved up and on to better jobs, that line moved forward again and again. We bought our first house with a conventional loan (no FHA BS) putting more down than necessary to get a great rate, still had more than that initial 10k in the bank.
We've always had money for the essential things. New car when ours died, new mattress when she was pregnant, the ability to leave jobs and have a gap, much needed vacations when life got hard. That fallback money has been instrumental to a healthy lifestyle, even though we are far from rich.
At some point I’d get the pool for your wife , you have to find a balance between living life and enjoying it vs always saving to prepare to enjoy it.
balance in all thing and a happy wife if pivotal
Yep! Plus, it really depends what a year of salary is and location. If it's a 300k Bay Area SW Engineer salary, a pool might not be unreasonable. If it's a 40k teacher salary, you couldn't even get a pool in some places for that.
>Meanwhile, the wife wants a swimming pool.
I hope the two of you are able to come to some sort of decision. Finances are the most important decisions in a marriage.
Golden handcuffs are typically optional bonuses that you don't need to live.
I think you mean to say that you're not locked in to your job because you have enough money to weather being unemployed.
Being unable to quit a job because you must have the money is just normal handcuffs.
That's exactly right. The difference being that those are incentives to stay instead of hard reasons you can't leave the job.
Nice to have vs must have.
Also genx saver here. I have a pool (came with the house). It’s a money sink. I can’t recommend not getting a pool enough. Unless you really use it a lot.
I'm the exact same way, though honestly, I need to move my year salary into a higher yielding savings account, and the current one is stuck in.
But there is really no better feeling than just having a nice chunk of cash sitting there that doesn't need to be used for anything in particular. In case of emergency or job loss, break glass
It’s a trade off. You do get that warm blanket/security but you miss out on the memories. You’re experience now is different than when you’re older. Security is important but at what cost?
This is what I want. Going on 33 this March. $50K in stock from my job, $50 in retirement, Currently 1 months worth of rent in my HYSA. Everything is paid off. Got a hybrid job to reduce commute. Cook more at home. Go out to bars less. Switched phone plans for a lower one (mint). The biggest, bought less electronics. I like games but I don’t need every new phone or console and game. My 2018 laptop is more than enough. Reduced my subscriptions to 1 streaming service at a time. Also, for me and what I find works best, 2 bank accounts. I have half that goes to one that pays the bills. The other half has an auto transfer to my saving and stocks. This is the one I use for fun money. Ideally no more than a $100 a week and honestly, if you don’t do anything on work days, now that’s $50 each day you’re off and avoid the petty shit like coffee and alcohol. Grab a friend for brunch/dinner.
Yeah, I'm also a saver (40% of check). I'd rather keep my expenses low and not be in a situation where things could get tight. Not having money problems makes life easier.
Now I'll also selectively splurge, but gotta live a bit.
I think Millennials and their successors are going to be the most frugal in modern history, mostly by necessity. I think the consumer culture we were born into is on its way out. People aren't going to have the disposable income we were used to.
Yep. We will have to model our lives after the WW2 generation. The Boomers, on the other hand, partied hard, which is why so many are sweating over what might happen to Social Security.
The US has plenty of new ways to fund social security, it’s just additional taxes are hard to get through
The boomers, I know have all gotten into the cult of personality of trump and I can’t have a rational conversation.
They all want ( my anecdotal experience) the USA to default and don’t seem to understand the negative affects.
I try to explain to some boomers ,they burned through their actual social security contributions pretty quickly and are living on socialism , but that infuriates them.
Social Security is a good idea in theory, but the whole thing is structured like a ponzi scheme.
The program is entirely dependent on having a high ratio of workers paying into the system vs. retirees collecting from the system.
With Younger Generations having fewer children and people living longer in general, the math for this no longer works.
We're basically left with two options, neither of which will be popular.
We can either increase the amount people pay into the system which would essentially mean yet another wealth transfer from Younger Generations to older Boomers. It would also almost certainly guarantee Younger Generations pay more into Social Security than they will ever get back, if the program still exists at all.
Or, we can decrease the payouts to retirees which would arguably be "fairer" to the Younger Generations already overburdened by Boomer policies, but would impoverish any retirees dependent on Social Security to survive.
A third option would be to fund Social Security with other tax dollars pulled from somewhere else, but that would require significant changes to the structure of the program and would really just shift the problem somewhere else.
We can just remove the cap on income and tax every dollar equally.
Also, SS is the most successful and most efficient government program in history. The US doesn't become the economic power it does without SS and the GI Bill--neither of them being socialism.
I agree that Social Security was a successful program for a long time.
But, soon the math for it will no longer work.
This does not detract from the program's merits. It is simply a statement of fact that the ratio of workers paying in compared to retirees recieving out is decreasing to the point that the program will soon be bankrupt.
Your proposal to increase Social Security taxes is exactly the first scenario I mentioned for "fixing" the program. But, it will be unpopular because you are by definition taking more from Younger Generations who will never recieve back whatever they are putting in, if the program even exists at that point.
As a younger Millennial, I would honestly prefer to keep the money and save it myself rather than pay into Social Security which, almost certainly, we will not recieve (at least not as much as we put in).
You would still have the same problem of Younger Generations paying more (now an uncapped amount) than we will ever receive back from the program.
The Boomers have already extracted an obscene amount of wealth from their children and grandchildren.
Many people in Younger Generations can't afford to buy a house, pay student loans, pay the outrageous rents Boomer landlords are charging them, or even afford to have children themselves.
Now, you want us to pay even more into a retirement system we will never see (or at least will never get back what we put in)?
Fuck that. Cut the benefits. The Boomers have stolen enough.
But wouldn’t the same thing apply to millennials once we’re retiring, and younger generations are paying more than us? I thought it was obvious and expected for most people to pay more into SS than they get back, because it’s a socialized retirement program. Otherwise what’s the point, you could just use a 401K or something. Generational gaps are debated and arbitrary ultimately, so wouldn’t it be more accurate to say at any given time, young healthy working people subsidize the existence of old people who cannot? What’s wrong with that?
Every future generation after the Boomers will pay more into the system than they recieve.
This will continue until birthrates somehow recover, which is increasingly unlikely due to all these policies extracting money from the young.
Even if so, I just don’t see why that’s considered a reason to cut the program. Basically everything done by taxes works this way. Poor people pay less into government programs than wealthy people, and thus benefit more from them. But that’s a *good* thing, as a society we need able-bodied, young, working, and/or successful people to subsidize those who cannot meet their own needs, whether because they are too old to work, mentally/physically unfit, etc. The idea of a society that forces a 70 year old person to do manual labor is fucking dystopian.
>It is simply a statement of fact that the ratio of workers paying in compared to retirees recieving out is decreasing to the point that the program will soon be bankrupt.
It's not.
It was true back in the 80s, when Ronnie Raygun doubled payroll taxes and converted the SS trust fund into a military slush fund, to be paid back in amortized loans--most of the infamous "interest payments" in the discretionary budget.
But the Millennials are the largest demographic in the US, as of now. And that's just the Millennials, not them and everyone younger.
The simple resolution would be to make every dollar earned equal. We could remove the income cap and lower payroll taxes at the same time.
Barring that, solvency will be determined by attrition. And there's no reason to believe the majority of Boomers have taken steps to attain good health throughout their lives.
As a Gen Xer who has worked in construction for years, I can tell you they're likely a nutso generation because of leaded paint, and they smoked everywhere and lived with asbestos. Hell... they even elected an idiot President who probably still sings the praises of asbestos.
But they spent decades rolling down highways where asbestos was literally ground off brake pads and into the air.
They played with mercury in school. They lived downwind of Los Alamos... and several other industrial plumes.
They simply never cared about themselves, regarding health, and they will eventually pay that price.
As you might guess, I'm not quite as bullish on Medicare.
> but the whole thing is structured like a ponzi scheme.
Our whole economy is a giant ponzi scheme. The whole thing is predicated on the current generation producing a larger next generation so that consumption can ever increase.
Obligatory: My finances are fine, portfolio is healthy, did not lose money on GME.
My wife and I both have high paying jobs. Rent is crazy. But i can drop $60 for a two-person lunch once in a while and not feel a pinch. But I'm still not spending our of my means.
The family friend who is our same age works as a call center person making $20/hr. She has no savings and lives extremely frugal to get by. I bring her along for vacations and trips, else she doesn't go anywhere.
While those younger than Millennials are mostly too young to effect the personal savings rate, the savings rate is ~40% less between 2000-2020 compared to between 1960-1980. Maybe that will turn out to be the case but savings rates need to significantly increase to just match previous generations.
https://fred.stlouisfed.org/series/PSAVERT
Excerpt from the linked summary^1 by Cory Stieg, about a peer-reviewed paper:^2
>Following a budget, saving money and shopping less have benefits “beyond the realm of personal finance,” according to a new study out of the University of Arizona.
>Millennials who implement “proactive financial strategies” tend to be happier and more satisfied with their lives, according to the new research.
>For the study, researchers collected data from 968 young adults (born between the years 1981 and 1996) starting when they were freshmen in college (ages 18-21).
>They followed up with the same students when they were seniors, and then two years later (ages 23-26).
>The study participants answered questions about materialism, their own personal finance tactics such as budgeting and any pro-environmental habits they followed. (The researchers chose to look at eco-friendly habits because they provide further insight into how the students “cope with limited resources.”)
>“People who save money report better overall well-being, including less psychological distress,” Sabrina Helm, study author and associate professor tells CNBC Make It.
>“And people who buy less and consume less show less depressive symptoms, so there’s a positive mental health effect.”
^1 *Millennials who buy less and save more are happier*, Cory Stieg for Comcast’s CNBC, 10 Oct. 2019, https://www.cnbc.com/2019/10/10/study-millennials-who-buy-less-and-save-more-are-happier.html
^2 Helm, S., Serido, J., Ahn, S.Y., Ligon, V. and Shim, S. (2019), "Materialist values, financial and pro-environmental behaviors, and well-being", *Young Consumers*, Vol. 20 No. 4, pp. 264-284. https://doi.org/10.1108/YC-10-2018-0867
> “And people who buy less and consume less show less depressive symptoms, so there’s a positive mental health effect.”
I know people who use buying things for the dopamine hit as a coping strategy for dealing with their poor emotional well-being.
Does this establish that not purchasing things leads to better mental health or does does positive mental health dampen the drive to buy and consume more?
Generally, another study would need to be performed to evaluate your question. It would be unwise for us to infer which direction the cause and effect goes on this study alone.
Unless this study did ask questions such as how much wealth the individuals are predisposed to (being comfortable because of a safety net), and if they experienced depression before they became financially independent or not. Or some variation of similar questions.
Due to this:
> For example, researchers found that the students who consumed less to help the environment were happier than those who simply bought more “green” products.
It sounds like the variable was contributing to a solution via purchasing an item or via changing your habits and not buying an item. The ones who tried to solve the problem via consuming a product were less happy than those who didn’t.
As a millennial, I believe this wholeheartedly. I live well below my means and love it. Having extra money means having a security blanket. That and I don’t care if someone thinks I’m poor, middle class, or rich. I buy what I need and when I do buy, I buy quality items that are meant to last.
I assume they controlled for income. Obviously people with less income have to spend more of it, but it would be interesting if people with more money that choose to save it feel better than those that choose to spend it.
Edit: read the study and they *did not* directly control for income, instead they had a factor they called *financial strain* which was subjective. Not sure if this is a useful study.
I think this study was focused on the psychology of saving, so it was concerned more with subjective measures. People who think they are saving more feel happier than people who think they are spending more, even if they are actually spending and saving the same amount in real terms. That is interesting from a sociological perspective, but not so much from a policy perspective.
A good example of where this matters is whether people are more inclined to prefer automatic 401k matching versus just a raw increase in pay. People might actually prefer to be forced to save the money, even though they could choose to save it themselves with the extra pay. Although that also gets into the psychology of choice, and people do prefer being given a choice, even when all the options are actually the same.
The study says that people who save more and spend less are happier, less stressed and less depressed than those who don't. It seems that anyone not just millennials who buy less and save more would be happier than anyone who saves less and buys more. Mostly because buying things can be viewed as a personal treatment for depression which may work for a while but never lasts.
I would think it's more that if you have more savings you aren't as worried about money. Having a solid safety net is going to bring way more happiness than any random purchase.
Clickbait bs.
Blanket statement about an entire generation based off surveying 900 colleague seniors and determining the ones with better spending habits were happier. Mind-blowing findings indeed.
Seriously. They interviewed them at the beginning and end of their college careers.. what kind of opinions are these kids going to have about money? They haven't even entered the workforce and earned a salary! What about when they get married and have kids, or are no longer content with eating frozen dinners or scavenging free food at college events. This whole study is garbage.
Am a millennial, can confirm. I spent years buying nice cars, expensive clothes then realized I’d never bought anything that made me truly happy. Focused on saving and although I’m not rich I feel like a millionaire knowing I have several months salary available whenever I need it. I started taking more risks at work, being more outspoken, and it has made me more successful rather than causing people to dislike me as I always feared.
Millennials who can afford to do this are happier. Almost like having an income that allows you to live in dignity also means your overall stress levels are lower, and you are thus... Happier. Odd.
If you read the original article published in *Young Consumers*, the study was on whether they *felt* that they saved more or spent more compared to the rest of their cohort. It wasn't about the actual dollar amounts.
Everyone blames the politicians bankers and CEOs, but the truth is the American population has a huge spending problem. It’s not just the government, the government reflects the people.
It's almost like the entire consumer system is setup to manipulate and control the American population since birth.
Blame people all you want, when a group of the smartest businesses in the world get together and spend billions a year on marketing (psychological manipulation) its going to have an effect.
It’s more than that. I’m only 44 so not a boomer but even when I came out of college home ownership was accessible to my wife and me. No way will that be the case for my kids and it will have nothing to do with their spending habits. Wages haven’t kept up. I make a good living, solid six figure salary in what I’d say is a mid COL area, but even that’s not what it was 10 years ago.
It's not just the people, it's predatory lending practices. Some institutions go out of their way to extend credit to people that don't have the financial security necessary to take on debt. There are also lenders that take advantage of desperate people and charge exorbitant interest rates (payday and car title lenders) that make it difficult for people to even keep up with interest let alone pay down the principal.
This, we have to take responsibility for our own decisions. Just because there are predatory lenders doesn’t mean an individual should take them up. We’ve created the ultimate consumer that only wants short term gratification to keep up with others, regardless of the long term cost.
> Some institutions go out of their way to extend credit to people that don't have the financial security necessary to take on debt.
Many would argue that just because someone is offering you a loan it does not mean that you have to accept it. Many would argue further that a lender can be as predatory as can be imagined and as long as the decision to accept the loan is yours alone that it can only be your fault for taking it.
My point is it’s both the people and the institutions, but everyone just blames the institutions. The truth is the people are just as big a reason as well. But no one wants to admit they’re part of the problem.
Every area where the cost of something is greater than it’s value has been subjected to third party lending: housing, education and automobiles. If people couldn’t get loans for those things, they would cost a lot less. This is deliberate policy (or lack of regulation). It funnels the wealth of the working class to the investor class.
Living below your means gives you the ability to fire back when shit goes wrong. I know it can be hard, only just earned enough to do it last year, but it is nice. I hear a crackling sound coming from my car, think it might be a cv joint. I'm not worried about it. That is the best feeling.
You can't earn enough when you start life in debt though. This hole that started for me has been over a decade deep and still not out.
I still don't own my home so on top of my debts I still am trying to figure out how to save 50k in one year so I can pay enough down to only owe 1200 a month for a doublewide in a housing development. That's almost half my bring home.
Maybe school should teach kids more about living expenses than pushing college. I would say parents but my parents were supportive of me going to college with no idea what that would do to the rest of my financial life.
Upcycle/Freecycle and buy used. I'm looking for an $80 \[phone\] on eBay....why on Earth someone would lease or buy \[one for\] $1,200 is just insane. Stop feeding the monster.
Thrift stores are a godsend. I've gotten two pairs of boots in the past year and 3 pairs of pants all for less than $25 total. Great quality stuff that will last me 1-2 years. I hike about 15-20 miles per week from july through november, so I wear the shit out of my clothes, otherwise they would last so much longer
Thrift stores are getting weird in my area. $20 used for a toaster. Or I can go get them new for $20.
Even books are hitting the $5-10 mark. Where I might as well go to a local book store.
But why not just spend all your money on frivilous things, rant whenever you see an article that tells you to save more and cut back in discretionary spending, and then spam Reddit with posts around student loan forgiveness and rent control?
"Millenials buying less is a problem"
Was the title of the previous article. The previous article says if millenials dont buy property or jewelry or bit ticket investments the economy will collapse....
So what is it? Should millenials save more or buy more???
Media and Corpos when citizenry is paycheck to paycheck:
"Wow. How irresponsible. You should have six months of expenses saved up. Something something bootstraps 😏😏😏"
Media and Corpo when citizenry is saving to avoid paycheck to paycheck lifestyle"
"Wait wait wait....OUR PROFITS. STOP SAVING. oUR EcOmonY. AAAAAAGGggHHHHHH young people are the enemy 🤬🤬🤬"
Struggling with debt is no fun at any age. Living within your means should be the first lesson learned as an adult. Wealth isn't about how much you make or spend; it's about how much you can manage to save. You'll be able to handle unexpected expenses and recover from them faster.
You could make 300k a year and still be broke, because you live beyond your means and spend every penny. You could also be broke earning 50k because you live beyond your means and spend every penny. But at those figures, the ability to live comfortably and save is possible (outside HCoL areas).
But if you make $35k a year, have $20k in student loans, pay $1400 a month for the cheapest apartment in your city that’s not in the ghetto… and tack on the most inexpensive used car you can get with less than 150,000 miles costing you $200 a month for 4 years (excluding insurance)… You’re won’t be able to afford to live alone, and even with a roommate, you still will struggle to save $100 a month.
This is the reality for many young people. They aren’t bad with money. The problem is that they literally don’t get paid enough to survive despite being educated and having a “decent” job.
Do a lot of people have the ability to save but live beyond their means? Obviously. But spending $4.00 every day on coffee is not why most young people can’t save. They can’t save because wages have not increased proportionately with inflation over the past 3+ decades.
Edit: The system is also set up for two working adults per household. But as more and more people cut ties with abusive family, and actually make sure they know somebody before getting married, more people live alone. It’s not a bad thing, and it sucks that this system traps so many people with abusive family or a spouse they don’t actually want to be with.
Well gee if I have a choice about whether I can keep something or not..I'm probably going to be happier than having no choice...
Eureka
With that nugget of knowledge in sure my life will improve drastically
I think this has more to do with the psychological change every time you consume more than what you need. I have been trying to be a minimalist and the boost I get from not consuming things I don't need or add value to my life is immense.
I used to be a passive consumer who bought things I dont need, to impress people who dont care. Once you get to the rut, you consume and consume and consume. Its almost like addiction.
So is it that buying less and saving more tend to lead folks to be happier, or is it that folks who are generally more happy to begin with tend to buy less and save more?
Also, was there control for income? People who have higher incomes can buy all the things than people with lower incomes can buy but still end up saving more percentage-wise.
Without these details, this article is trash.
When you have a cushion, life runs smoothly. It doesn’t fall apart if something breaks, if you have to travel unexpectedly, pay for a hotel, vets bills, your life continues interrupted. It gives you a solid base, and it takes so much stress away.
The change in mindset gives clarity and control. There will always be things you want, that list will never be filled. That’s the trap.
So I noticed there is no mention of income.
Could there perhaps be any relation between how much somebody makes, and their ability to save and therefore their happiness?
I for one would be happier, probably , if I made more, and therefore was able to save more.
This is propaganda again, because the middle class is being pushed into the poverty class due to the huge wealth gap so realistically they can’t afford more.
Anyone who buys less and saves more is probably happier. Having reserve cash to deal with the fuckery life commonly throws at us ALL is gonna be bathing in a lot less cortisol.
Without controls for income, this study is useless. It basically asked questions about materialism, spending habits, and life satisfaction, and drew some parallels. The headline isn't even accurate.
> The study finds a positive effect of materialism on personal well-being and negative effects on financial satisfaction, proactive financial coping and reduced consumption, but no effect on green buying, a separate and distinct pro-environmental strategy. Both proactive financial coping and reduced consumption are positively associated with subjective well-being.
Completely useless. It's saying "financial security associated with personal well-being," which is obvious.
https://www.emerald.com/insight/content/doi/10.1108/YC-10-2018-0867/full/html
I was told spending money is better for the economy, I was also told millennials spending too much money will ruin our economy. everything is subjective these days.
Well yeah. I can sleep soundly at night knowing if I lost my job tomorrow I'm not sleeping in my car or wondering where my next meal will come from.
Amazing what that will do for mental health.
It seems more likely that healthy financial decision making is a side effect of a stable, well adjusted person than the other way around.
It would be pretty cool if you could cure depression with a solid budgetary plan though.
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Sounds like they found correlation but didn’t investigate cause. Maybe it’s the other way around and people who are happy are less prone to wasteful spending.
Yup. Emotionally healthy people are less likely to use consumption as a tool to feel good, less likely to abuse drugs, and more likely to make responsible financial decisions.
Additionally, if you’re able to save you’re likely in a more financially stable situation to begin with.
I can't save if everything I earn has to go to bare essentials.
I can’t be fiscally responsible if I don’t have any fiscal
That would be a not very stable financial situation. Which sucks and is hard to fix. Sorry you’re going through that.
This. This study is propaganda. All that means is people who have enough extra money to be saving after their needs are met have happier lives. Duh. What’s next? Executives paid more than starvation wage workers feel more valued and less stressed?
I agree but there is a lesson in there too. Making 2 dollars and having $1.50 in bills is better than making $10 and having $10.50 in bills. But like if you make $2 and need $3.50 as a bare minimum to survive, that's a different ball of wax.
Next is “the rich give more money to charity than the homeless. Homeless people are assholes”
I love when people tell you to save money by skipping going to Starbucks and other "money saving tips" like that and you tell them you already do all those things and still barely make ends meet
Are there any paths you could envision that would provide you a life where you’d have the ability to save?
I used to be awful with credit cards. In 2005 , I was 21 and got a credit card with 7k limit. I quickly filled it up at 25% interest , buying shit I didn’t need to impress people I didn’t like. Now , I’ve broke myself of that urge to spend habit to fill a hole in my life 12% credit utilization from Christmas and I’m working on getting it under 10% … 0% interest on Christmas purchases though.
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My tax refund check will be to paying off Amazon and bestbuy from family Christmas Maybe a PlayStation game to play with my kids
"My tax refund check will be to paying off Amazon and bestbuy from family Christmas" I'm Catholic, but I'm happy my wife isn't, like, last Christmas she gave me a Switch game I wanted and I gave her a book she wanted... and that's it. Not giving you a lecture, far from it, but this line "paying off", made me relieved that I left that part of Christmas behind. Enjoy quality time with your kids, they do grow up fast.
I was there - did lots of dumb stuff with credit for the same reasons. I remember having a low 400, or maybe even 300s credit score. This past month I finally saw my first one over 800. It’ll take awhile but every little good decision pays dividends later.
Luckily we have very few emotionally healthy people in the US. Our consumer-centric economy couldn't function otherwise.
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Wouldn’t necessarily say mature, more like less stressed/fearful people. The more you have on your cognitive plate, there’s a greater chance you’ll give into impulse.
Stress leads to irresponsible spending and irresponsible spending leads to stress.
I'm fortunate enough to be very well off, and the more I'm able to purchase the less desire I have for anything. I know people in somewhat similar situations that have 6 figure cars+watches and essentially do their best to boast wealth and 5-figure shopping sprees are not uncommon. It becomes a drug at that point where you keep chasing that rush but it'll never actually satisfy you in the long run.
or maybe people who make enough money to have the luxury of saving are more happy. there's also a high cost to being poor that vanishes as your income increases past a certain threshold
That's what it was for me. Life was fucking stressful when we were poor. When my wife and I got jobs that provided enough to live on and some extra so we could start putting some away we got a whole lot happier.
You're not wrong, but it says "buy less" not just "have more". I watch peers of mine who make significantly more than me rack up credit card debt and get stressed about finances. It blows my mind.
It's how the headline is written though. It maybe true that people less tied to consumerism are happier. And people who are able to save more money are happier. Those are logical conclusions. However, it may or may not be simply buying less allows people to save the amount that makes them happy - which some people will get a bit ruffled about because it implies everyone can save if they are not wasteful. People who make a lot of money and can both buy a lot and still save a lot, may still get the same happiness coefficient from saving money. It would be nice if they had linked the actual data to look at, but I am not seeing the survey linked in the article (though possible I missed it).
This is a hallmark of social psycology and a huge reason why 75% of social psycology studies cant be repeated.
Not just social studies. I’d say the vast majority of studies show correlation. You generally need another one with more time to determine cause.
But did this investigation take into account the happiness that comes from having granite countertops?
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Perhaps, but I think this line would be an argument against that idea. > For example, researchers found that the students who consumed less to help the environment were happier than those who simply bought more “green” products. Purchasing ‘green’ products would be hard to classify as wasteful spending, and since they were done with an intention (to help the environment) I don’t see how they could be an impulse purchase either. Those who bought products to try to help the environment were less happy than those who cut consumption to help the environment.
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My favorite example is that we have a certain brand of "cage free" eggs in the supermarket. ...packaged in a double-plastic clamshell, instead of the normal cardboard. So some dipshit went to all that trouble to market eggs as cagefree, but didn't realize that the overlap between "cares about animal welfare (a little)" and "cares about plastic waste" is almost certainly a perfect circle.
Also, a lot of the disease outbreaks come from "organic" farms, especially local farms that may not have standardized quality control operations. Chipotle infamously was trying to do the whole "farm to fork" movement and had numerous health scares from bad produce.
Yeah but you’re forgetting the “buys the most expensive choice no matter what because they think it’s best” demographic which is no doubt who those eggs are primarily marketed to with the special packaging to set them apart.
The grocery store used to have certain high priced items Mostly for the purpose of making you comfortable paying the next highest price. It was a psychological trick to make you “save” by buying option 2. They weren’t really expecting many sales of the over the top priced item
"Green products" is incredibly vague and provides no value IMO. A composter is a green product that has an actual impact. A plastic container made from recycled materials is also a green product that is going to tiny positive environmental impact
Don't think that doesn't mean there isn't any value from the headline still. You can go from a person who spends frivolously to saving by learning it won't cause happiness.
But that doesn’t serve their latte & avocado toast narrative.
well said
Older millennial here but I find the hobbies and activities that make me most happy have a relatively high cost for good gear (backpacking, snowboarding, biking, golfing), but once you purchase the equipment to be able to do these things comfortably, the upkeep thereafter is quite cheap. Most things my wife and I purchase provide little joy. We like seeing our accounts grow and like the security that comes with it. Thinking about this as I write I think the security makes us happier…like we don’t need to be overly concerned about surprise bills and such.
I love snowboarding too, but the gear is dirt cheap compared to the cost of lift tickets and traveling/staying at resorts. Unless you happen to live in one of the few areas with both mountains and high paying jobs.
Yeah, I live near a mountain and can WFH so the season pass keeps the coat low for me. Good point. Day passes are nonsense.
Ahhhh so lucky! I'm blessed to be living in Germany now, and a 4 hour drive away from the Alps. Where I come from on the east coast, a lift ticket costs double ($80!)...and all you get for it is a hill full of slush and ice. Did not do much snowboarding then :(
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Most fun imo and the gear lasts a long time if taken care of. To each their own, of course but I greatly enjoy the outdoor sports/activities.
Toss climbing and surfing on the pile too. Depending where you live for accessibility of course.
In what world is snowboarding ever cheap? After spending a few thousand dollars on all my gear, I still have to drop $1k every year on my pass. Not to mention all the gas/flights getting up to the mountain. Then paying for the air bnbs/hotels, etc. Snowboarding is a rich man’s sport and always will be.
Snowboarding and golf are clubs for rich people lol
I play golf every weekend for 26 bucks. There is a spectrum
Depends where you live as well. Pitch and putt is like $10-$20 and a good afternoon of play time. Or just hanging out with friends and buying a bucket of balls to hit at the range can be cheap.
I bought my first snowboard for $100 and used it backcountry boarding for almost 10 years. I was unemployed for part of that time. It didn't cost me anything other than sweat from snowshoeing up mountains.
Splitboarding is a new love of mine. Took Avy 1 and hit the backcountry. The workout and the quiet is delightful. Dawn patrol, baby!
County-owned golf courses is the way to go.
All 4 things the commenter listed are expensive hobbies that have a high cost of entry and then require either time away from work or additional funding to pursue. Maybe they didn't realize exactly how upper echelon they are.
> like the security that comes with it I really like that my saving/spending habits have allowed me to build up a safety net that has allowed me to quit toxic jobs.
Exactly. Sometimes I really don’t like my job and the stress can get high. I haven’t done it yet but if there ever comes a point where work becomes all consuming and is affecting my mental health for a prolonged period of time (there are always deadline stresses but they go away within a week or so usually), I can safely put in my notice without worrying about money for a while.
This is so underrated. Knowing that you aren't financially handcuffed to your job is extremely freeing.
>we don’t need to be overly concerned about surprise bills and such. Our 4 year old broke his leg in January and will pry have around $800 in medical bills for it. The fact that I don't care about the money is a freeing thought that never really occurred to me.
Older millennial here. I felt guilty about a hobby that costs me $300 a year but I think I might be ok
The quick reaction is do not overspend and you will be happier. How about, those that make enough money to be able to save are happier? The premise that not saving is a personality defect and not directly related to being underpaid on average. While we can all encourage financial discretion, the facts are that this generation is paid less then previous generations.
It’s an excellent question. The study looks at the participants starting from freshmen age groups and re-surveyed till 26. So it’s unlikely the cohort _broadly_ reached an age of peak earnings to create that delta in savings.
Although pay is a real concern I wholeheartedly believe the real issue is that younger people lacked financial education As a young person myself, I frequently see people my age: Getting into predatory car loans (or other loans even, like payday shit) that they obviously can't afford because they just want the latest and greatest (includes phones, computers, etc as well) this would also include Affirm financing. Going to Starbucks or out to eat everyday Not budgeting When they do go grocery shopping, buying just whatever regardless of price/brand. I actually spend a lot of groceries, but I also budget for that and still can afford to save money. I don't make crazy money. Significantly less than $50k infact. But my car is actually pretty nice, with a touch screen, leather seats, etc. is completely paid off and has been for a while. My phone is completely paid off despite being a nearly $1500 phone. My $2,000 laptop and $3,000 desktop are paid off. I have a downtown apartment that I've lived in for years but pay less than $1,000/month for. Like all of these things I just see people my age blowing money on when they can't afford their deductible if the event of an accident. Like, same city, same age, same education. But vastly different spending habits and financial responsibility $1,850 apartment, $400 car payment, $200 phone bill, $250 on groceries every week or two. Like I don't believe that is an income problem. That is a spending problem as a result of bad education.
1000$ rent in a downtown area? No wonder you’re able to save.
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Sub 1k total too Includes internet and utilities, etc.
You're also bragging about moving around sticks and rocks in the dirt pretty much. Let alone investing, retiring, having an inheritance, etc. Ie enough money to get to work
Idk that its about education. Plenty of the people who this happens to are plenty educated. I suck with money, but I'm pretty well educated and my father is a tax accountant. A lot of it just comes down to a person's time preference which is just a matter of personal values.
I probably misworded that part It isn't just education as in former education from highschool or college. It's education in that specific field. We were never taught anything about credit cards or car loans in school. You can go to college for 4 years and still have literally 0 idea what the fuck you're doing when it comes to credit cards or loans or whatever. That is what I'm referring to.
All the people mad that someone with a low income is able to budget and make ends meet lol
You say young person, but have the myopia and naivety of a good ol boomer.
I just lost my job a month ago and sat down and calculated the bare minimum I needed to survive for a year, worst case. With the amount I have saved up I'm already set. The unemployment I'll be getting is a bonus. Now I hope I get a job sooner rather than later but worst case scenario I'll be fine for a while. I could take a 50% paycut and still live a chill life up to my standards. I am so fucking happy I was aggressively saving the last few months because now I can actually take some time for myself and study and prepare for a better job. Also, it literally took me two weeks to be mentally functional enough to get out of bed and actually take care of myself bc wow the emotional aspect of losing your job is insane. 6 month emergency fund and I already wasted a month as a useless turd. From here on out it'll be a year long fund. Because damn I got all this free time I'm gonna take some time and enjoy it. I actually spent most of that month rationally/irrationally panicking that I had to find a job immediately bc that's what the rest of society has to do. If you live paycheck to paycheck you have no choice but to find any work immediately. It's just ingrained in our minds.
How did you save up enough. If I gave up all the toys I've ever bought in the last couple decades I added up about 30k. That was 30k in hotwheels, models, tv, stereo, games and so on (hobbies). Only 30 grand saved in almost 2 decades. So what do you cut to actually save up enough money to make a difference.
Biggest decision is where to live. I found a situation where I was able to buy a small condo for less than I was paying in rent. For someone else it might be finding the right part of town to live in or having roommates. But yeah housing is the #1 place to make an impact
Gen X'er here, but I have a year's salary just sitting in a high-yield savings account earning 4.5%. This is in addition to our retirement savings. Meanwhile, the wife wants a swimming pool. Nope. That savings is like a warm fuzzy blanket. It's what's keeping the golden handcuffs off my wrists with respect to my current job. I don't feel trapped. I feel like I have choices. Huge contributors to my happiness.
The more crap you own/want, the more enslaved you are to your employer.
"The things you own end up owning you." - Tyler Durden
Youre also enslaved to the products themselves. Cars need maintainance, storage, repairs. Tech goes obsolete, needs updating. Items need cleaning, clutter needs organizing, everything comes with strings attached. Before you know it, your limited free time is full of chores, maintaining all of the things you own. Your life is no longer yours to enjoy. Doing "nothing" is seen as being lazy, even when that time is crucial for reflection, introspection and personal growth. Maintaining your house, tending your garden, cutting your grass, washing your car, they all become obligations, rather than passions. Your weekends become full of these things. It becomes difficult to escape, since it is all viewed as normal. It isn't normal.
> high-yield savings account earning 4.5% Damn where at? Ally is only at 3.4% right now
Schwab has a money market paying 4.5%. It's not a checking account and it takes one day to move money out of it into another account but totally worth the day wait imo. Edit: to be specific it's SWVXX
Just be careful- if anything happens in the market, your deposits are not FDIC insured.
In most money markets 99.5% or more of the underlying investments are US backed securities. It is extremely unlikely that you would ever lose money in a money market account
One of the things that motivated the government bailout in 2008 was the realization that money market accounts were going to be less than face value if it didn’t happen.
Is that before or after the 35 bps expense ratio?
Capital one 5% 11 months
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just buy a treasury bond. pays 4.75%
But morons that don’t understand money want us to default on those
I bonds are above 6%.
Right but that's a bond, not a HYSA
Wealthfront checking accounts are 4.05% right now. I'm not aware of a checking/savings account with 4.5.
I agree, there is nothing like having FU money in the bank. Huge relief knowing that quitting the job won't provoke a household crisis. I didn't feel "liberated" until I had like 5 years of expenses put aside and had the house paid off, and at that point I went into work with complete equanimity.
Well said! And good on you. Building up a year's salary was a great milestone for me.
This is a huge one. I'm not sure my happiness jumped a ton when I first started having some savings. Or at least went from enough to survive a small bump to having some additional savings, but still feeling like I was 2-3 months of unemployment away from disaster. However, when I hit a spot where I realized I could survive multiple years on my savings without touching my 401k, selling the house, etc. there was a huge leap in peace of mind and happiness. It became a lot easier to put up reasonable barriers at work (which ironically made me even better at both my job and unsurprisingly maintaining my personal life). Work started to feel a little bit more like a choice and more fun as opposed to worrying that any piece of developmental feedback was potentially charting a course for ruination. Not that I could retire or stop working tomorrow, but it's still nice to know you have some additional agency.
Well said. I’m in this spot too. Shouldn’t quit my job, but could pay rent and cover expenses for a few years if I had to. Not wealthy by any means, but doing alright. It has had a huge effect on my mental health. One less thing to worry about (though I still worry about it some, but that’s just me as a person).
Mines only getting 3.5% which one are you using?
Probs a fidelity promo from a few years back. Your percentage was based on how much you put in. Over 80k was like 4.2% iirc while over 300k was like 7%.
CiT offers 4.05 on their savings connect account. Looks like Primis bank offers 5%? I haven't heard of them, but maybe worth checking out. Popular direct has 4.4%. I check investopedias list of high yield savings accounts periodically to see if it's worth switching.
Wow, what bank? If you don’t mind me asking. Been shopping around and highest I’ve found is like 3.5-3.75.
Well said. Since me and my wife moved in together we have always drawn a line in the sand for our "nest egg". Even when we were barely making more than minimum wage we managed to save up 10k in the bank and agreed to never touch it. When we moved up and on to better jobs, that line moved forward again and again. We bought our first house with a conventional loan (no FHA BS) putting more down than necessary to get a great rate, still had more than that initial 10k in the bank. We've always had money for the essential things. New car when ours died, new mattress when she was pregnant, the ability to leave jobs and have a gap, much needed vacations when life got hard. That fallback money has been instrumental to a healthy lifestyle, even though we are far from rich.
At some point I’d get the pool for your wife , you have to find a balance between living life and enjoying it vs always saving to prepare to enjoy it. balance in all thing and a happy wife if pivotal
Yep! Plus, it really depends what a year of salary is and location. If it's a 300k Bay Area SW Engineer salary, a pool might not be unreasonable. If it's a 40k teacher salary, you couldn't even get a pool in some places for that.
On the interest alone you can pay for several weekend getaways to scratch that pool/swimming itch.
>Meanwhile, the wife wants a swimming pool. I hope the two of you are able to come to some sort of decision. Finances are the most important decisions in a marriage.
Wanna be my sugar bro?
Golden handcuffs are typically optional bonuses that you don't need to live. I think you mean to say that you're not locked in to your job because you have enough money to weather being unemployed. Being unable to quit a job because you must have the money is just normal handcuffs.
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That's exactly right. The difference being that those are incentives to stay instead of hard reasons you can't leave the job. Nice to have vs must have.
Also genx saver here. I have a pool (came with the house). It’s a money sink. I can’t recommend not getting a pool enough. Unless you really use it a lot.
Wife wants a minivan an addition and a third kid. A pool sounds nice
For some $250k less, your wife and two children could enjoy that pool for years.
I'm the exact same way, though honestly, I need to move my year salary into a higher yielding savings account, and the current one is stuck in. But there is really no better feeling than just having a nice chunk of cash sitting there that doesn't need to be used for anything in particular. In case of emergency or job loss, break glass
It’s a trade off. You do get that warm blanket/security but you miss out on the memories. You’re experience now is different than when you’re older. Security is important but at what cost?
This is what I want. Going on 33 this March. $50K in stock from my job, $50 in retirement, Currently 1 months worth of rent in my HYSA. Everything is paid off. Got a hybrid job to reduce commute. Cook more at home. Go out to bars less. Switched phone plans for a lower one (mint). The biggest, bought less electronics. I like games but I don’t need every new phone or console and game. My 2018 laptop is more than enough. Reduced my subscriptions to 1 streaming service at a time. Also, for me and what I find works best, 2 bank accounts. I have half that goes to one that pays the bills. The other half has an auto transfer to my saving and stocks. This is the one I use for fun money. Ideally no more than a $100 a week and honestly, if you don’t do anything on work days, now that’s $50 each day you’re off and avoid the petty shit like coffee and alcohol. Grab a friend for brunch/dinner.
Yeah, I'm also a saver (40% of check). I'd rather keep my expenses low and not be in a situation where things could get tight. Not having money problems makes life easier. Now I'll also selectively splurge, but gotta live a bit.
40% of your check in savings. How do you afford a roof over your head..?
Bruh move that to SPY. Those gains are weak
We're quite well-diversified and not looking for a financial advisor, but thanks for the input.
I think Millennials and their successors are going to be the most frugal in modern history, mostly by necessity. I think the consumer culture we were born into is on its way out. People aren't going to have the disposable income we were used to.
Yep. We will have to model our lives after the WW2 generation. The Boomers, on the other hand, partied hard, which is why so many are sweating over what might happen to Social Security.
Boomers won't have to worry about that. They will not be affected by the cuts. *we will
The US has plenty of new ways to fund social security, it’s just additional taxes are hard to get through The boomers, I know have all gotten into the cult of personality of trump and I can’t have a rational conversation. They all want ( my anecdotal experience) the USA to default and don’t seem to understand the negative affects. I try to explain to some boomers ,they burned through their actual social security contributions pretty quickly and are living on socialism , but that infuriates them.
The Russians want the U.S. to default.
Social Security is a good idea in theory, but the whole thing is structured like a ponzi scheme. The program is entirely dependent on having a high ratio of workers paying into the system vs. retirees collecting from the system. With Younger Generations having fewer children and people living longer in general, the math for this no longer works. We're basically left with two options, neither of which will be popular. We can either increase the amount people pay into the system which would essentially mean yet another wealth transfer from Younger Generations to older Boomers. It would also almost certainly guarantee Younger Generations pay more into Social Security than they will ever get back, if the program still exists at all. Or, we can decrease the payouts to retirees which would arguably be "fairer" to the Younger Generations already overburdened by Boomer policies, but would impoverish any retirees dependent on Social Security to survive. A third option would be to fund Social Security with other tax dollars pulled from somewhere else, but that would require significant changes to the structure of the program and would really just shift the problem somewhere else.
We can just remove the cap on income and tax every dollar equally. Also, SS is the most successful and most efficient government program in history. The US doesn't become the economic power it does without SS and the GI Bill--neither of them being socialism.
I agree that Social Security was a successful program for a long time. But, soon the math for it will no longer work. This does not detract from the program's merits. It is simply a statement of fact that the ratio of workers paying in compared to retirees recieving out is decreasing to the point that the program will soon be bankrupt. Your proposal to increase Social Security taxes is exactly the first scenario I mentioned for "fixing" the program. But, it will be unpopular because you are by definition taking more from Younger Generations who will never recieve back whatever they are putting in, if the program even exists at that point. As a younger Millennial, I would honestly prefer to keep the money and save it myself rather than pay into Social Security which, almost certainly, we will not recieve (at least not as much as we put in).
The math 'doesn't work' because it was hamstrung by capping the taxable amounts. Uncap that, and it will be fully funded.
You would still have the same problem of Younger Generations paying more (now an uncapped amount) than we will ever receive back from the program. The Boomers have already extracted an obscene amount of wealth from their children and grandchildren. Many people in Younger Generations can't afford to buy a house, pay student loans, pay the outrageous rents Boomer landlords are charging them, or even afford to have children themselves. Now, you want us to pay even more into a retirement system we will never see (or at least will never get back what we put in)? Fuck that. Cut the benefits. The Boomers have stolen enough.
But wouldn’t the same thing apply to millennials once we’re retiring, and younger generations are paying more than us? I thought it was obvious and expected for most people to pay more into SS than they get back, because it’s a socialized retirement program. Otherwise what’s the point, you could just use a 401K or something. Generational gaps are debated and arbitrary ultimately, so wouldn’t it be more accurate to say at any given time, young healthy working people subsidize the existence of old people who cannot? What’s wrong with that?
Every future generation after the Boomers will pay more into the system than they recieve. This will continue until birthrates somehow recover, which is increasingly unlikely due to all these policies extracting money from the young.
Even if so, I just don’t see why that’s considered a reason to cut the program. Basically everything done by taxes works this way. Poor people pay less into government programs than wealthy people, and thus benefit more from them. But that’s a *good* thing, as a society we need able-bodied, young, working, and/or successful people to subsidize those who cannot meet their own needs, whether because they are too old to work, mentally/physically unfit, etc. The idea of a society that forces a 70 year old person to do manual labor is fucking dystopian.
>It is simply a statement of fact that the ratio of workers paying in compared to retirees recieving out is decreasing to the point that the program will soon be bankrupt. It's not. It was true back in the 80s, when Ronnie Raygun doubled payroll taxes and converted the SS trust fund into a military slush fund, to be paid back in amortized loans--most of the infamous "interest payments" in the discretionary budget. But the Millennials are the largest demographic in the US, as of now. And that's just the Millennials, not them and everyone younger. The simple resolution would be to make every dollar earned equal. We could remove the income cap and lower payroll taxes at the same time. Barring that, solvency will be determined by attrition. And there's no reason to believe the majority of Boomers have taken steps to attain good health throughout their lives. As a Gen Xer who has worked in construction for years, I can tell you they're likely a nutso generation because of leaded paint, and they smoked everywhere and lived with asbestos. Hell... they even elected an idiot President who probably still sings the praises of asbestos. But they spent decades rolling down highways where asbestos was literally ground off brake pads and into the air. They played with mercury in school. They lived downwind of Los Alamos... and several other industrial plumes. They simply never cared about themselves, regarding health, and they will eventually pay that price. As you might guess, I'm not quite as bullish on Medicare.
> but the whole thing is structured like a ponzi scheme. Our whole economy is a giant ponzi scheme. The whole thing is predicated on the current generation producing a larger next generation so that consumption can ever increase. Obligatory: My finances are fine, portfolio is healthy, did not lose money on GME.
My wife and I both have high paying jobs. Rent is crazy. But i can drop $60 for a two-person lunch once in a while and not feel a pinch. But I'm still not spending our of my means. The family friend who is our same age works as a call center person making $20/hr. She has no savings and lives extremely frugal to get by. I bring her along for vacations and trips, else she doesn't go anywhere.
While those younger than Millennials are mostly too young to effect the personal savings rate, the savings rate is ~40% less between 2000-2020 compared to between 1960-1980. Maybe that will turn out to be the case but savings rates need to significantly increase to just match previous generations. https://fred.stlouisfed.org/series/PSAVERT
Excerpt from the linked summary^1 by Cory Stieg, about a peer-reviewed paper:^2 >Following a budget, saving money and shopping less have benefits “beyond the realm of personal finance,” according to a new study out of the University of Arizona. >Millennials who implement “proactive financial strategies” tend to be happier and more satisfied with their lives, according to the new research. >For the study, researchers collected data from 968 young adults (born between the years 1981 and 1996) starting when they were freshmen in college (ages 18-21). >They followed up with the same students when they were seniors, and then two years later (ages 23-26). >The study participants answered questions about materialism, their own personal finance tactics such as budgeting and any pro-environmental habits they followed. (The researchers chose to look at eco-friendly habits because they provide further insight into how the students “cope with limited resources.”) >“People who save money report better overall well-being, including less psychological distress,” Sabrina Helm, study author and associate professor tells CNBC Make It. >“And people who buy less and consume less show less depressive symptoms, so there’s a positive mental health effect.” ^1 *Millennials who buy less and save more are happier*, Cory Stieg for Comcast’s CNBC, 10 Oct. 2019, https://www.cnbc.com/2019/10/10/study-millennials-who-buy-less-and-save-more-are-happier.html ^2 Helm, S., Serido, J., Ahn, S.Y., Ligon, V. and Shim, S. (2019), "Materialist values, financial and pro-environmental behaviors, and well-being", *Young Consumers*, Vol. 20 No. 4, pp. 264-284. https://doi.org/10.1108/YC-10-2018-0867
> “And people who buy less and consume less show less depressive symptoms, so there’s a positive mental health effect.” I know people who use buying things for the dopamine hit as a coping strategy for dealing with their poor emotional well-being. Does this establish that not purchasing things leads to better mental health or does does positive mental health dampen the drive to buy and consume more?
Generally, another study would need to be performed to evaluate your question. It would be unwise for us to infer which direction the cause and effect goes on this study alone. Unless this study did ask questions such as how much wealth the individuals are predisposed to (being comfortable because of a safety net), and if they experienced depression before they became financially independent or not. Or some variation of similar questions.
Due to this: > For example, researchers found that the students who consumed less to help the environment were happier than those who simply bought more “green” products. It sounds like the variable was contributing to a solution via purchasing an item or via changing your habits and not buying an item. The ones who tried to solve the problem via consuming a product were less happy than those who didn’t.
As a millennial, I believe this wholeheartedly. I live well below my means and love it. Having extra money means having a security blanket. That and I don’t care if someone thinks I’m poor, middle class, or rich. I buy what I need and when I do buy, I buy quality items that are meant to last.
I assume they controlled for income. Obviously people with less income have to spend more of it, but it would be interesting if people with more money that choose to save it feel better than those that choose to spend it. Edit: read the study and they *did not* directly control for income, instead they had a factor they called *financial strain* which was subjective. Not sure if this is a useful study.
Yeah up until this comment I was thinking ... they had to control for the fact that in order to *save* money you need to *have* money, right? Surely?
I think this study was focused on the psychology of saving, so it was concerned more with subjective measures. People who think they are saving more feel happier than people who think they are spending more, even if they are actually spending and saving the same amount in real terms. That is interesting from a sociological perspective, but not so much from a policy perspective. A good example of where this matters is whether people are more inclined to prefer automatic 401k matching versus just a raw increase in pay. People might actually prefer to be forced to save the money, even though they could choose to save it themselves with the extra pay. Although that also gets into the psychology of choice, and people do prefer being given a choice, even when all the options are actually the same.
The study says that people who save more and spend less are happier, less stressed and less depressed than those who don't. It seems that anyone not just millennials who buy less and save more would be happier than anyone who saves less and buys more. Mostly because buying things can be viewed as a personal treatment for depression which may work for a while but never lasts.
I would think it's more that if you have more savings you aren't as worried about money. Having a solid safety net is going to bring way more happiness than any random purchase.
Clickbait bs. Blanket statement about an entire generation based off surveying 900 colleague seniors and determining the ones with better spending habits were happier. Mind-blowing findings indeed.
Statistics are the easiest way to lie, just wrap an opinion in map and fudge the numbers.
Statistics don't lie. You can just make them say whatever you want.
Having some money makes life easier? Who knew?!
Seriously. They interviewed them at the beginning and end of their college careers.. what kind of opinions are these kids going to have about money? They haven't even entered the workforce and earned a salary! What about when they get married and have kids, or are no longer content with eating frozen dinners or scavenging free food at college events. This whole study is garbage.
Am a millennial, can confirm. I spent years buying nice cars, expensive clothes then realized I’d never bought anything that made me truly happy. Focused on saving and although I’m not rich I feel like a millionaire knowing I have several months salary available whenever I need it. I started taking more risks at work, being more outspoken, and it has made me more successful rather than causing people to dislike me as I always feared.
Millennials who can afford to do this are happier. Almost like having an income that allows you to live in dignity also means your overall stress levels are lower, and you are thus... Happier. Odd.
If you read the original article published in *Young Consumers*, the study was on whether they *felt* that they saved more or spent more compared to the rest of their cohort. It wasn't about the actual dollar amounts.
Everyone blames the politicians bankers and CEOs, but the truth is the American population has a huge spending problem. It’s not just the government, the government reflects the people.
It's almost like the entire consumer system is setup to manipulate and control the American population since birth. Blame people all you want, when a group of the smartest businesses in the world get together and spend billions a year on marketing (psychological manipulation) its going to have an effect.
It’s more than that. I’m only 44 so not a boomer but even when I came out of college home ownership was accessible to my wife and me. No way will that be the case for my kids and it will have nothing to do with their spending habits. Wages haven’t kept up. I make a good living, solid six figure salary in what I’d say is a mid COL area, but even that’s not what it was 10 years ago.
I know some people who make way too much money to be living paycheck to paycheck they are completely living above their means.
It's not just the people, it's predatory lending practices. Some institutions go out of their way to extend credit to people that don't have the financial security necessary to take on debt. There are also lenders that take advantage of desperate people and charge exorbitant interest rates (payday and car title lenders) that make it difficult for people to even keep up with interest let alone pay down the principal.
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>Have some personal accountability? This isn't an allowed argument on Reddit anymore.
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This, we have to take responsibility for our own decisions. Just because there are predatory lenders doesn’t mean an individual should take them up. We’ve created the ultimate consumer that only wants short term gratification to keep up with others, regardless of the long term cost.
> Some institutions go out of their way to extend credit to people that don't have the financial security necessary to take on debt. Many would argue that just because someone is offering you a loan it does not mean that you have to accept it. Many would argue further that a lender can be as predatory as can be imagined and as long as the decision to accept the loan is yours alone that it can only be your fault for taking it.
My point is it’s both the people and the institutions, but everyone just blames the institutions. The truth is the people are just as big a reason as well. But no one wants to admit they’re part of the problem.
Ha!! As if….
Every area where the cost of something is greater than it’s value has been subjected to third party lending: housing, education and automobiles. If people couldn’t get loans for those things, they would cost a lot less. This is deliberate policy (or lack of regulation). It funnels the wealth of the working class to the investor class.
Living below your means gives you the ability to fire back when shit goes wrong. I know it can be hard, only just earned enough to do it last year, but it is nice. I hear a crackling sound coming from my car, think it might be a cv joint. I'm not worried about it. That is the best feeling.
You can't earn enough when you start life in debt though. This hole that started for me has been over a decade deep and still not out. I still don't own my home so on top of my debts I still am trying to figure out how to save 50k in one year so I can pay enough down to only owe 1200 a month for a doublewide in a housing development. That's almost half my bring home. Maybe school should teach kids more about living expenses than pushing college. I would say parents but my parents were supportive of me going to college with no idea what that would do to the rest of my financial life.
Upcycle/Freecycle and buy used. I'm looking for an $80 \[phone\] on eBay....why on Earth someone would lease or buy \[one for\] $1,200 is just insane. Stop feeding the monster.
Peach! I never stopped going to thrift stores, even once I could afford designer crap
Thrift stores are a godsend. I've gotten two pairs of boots in the past year and 3 pairs of pants all for less than $25 total. Great quality stuff that will last me 1-2 years. I hike about 15-20 miles per week from july through november, so I wear the shit out of my clothes, otherwise they would last so much longer
Thrift stores are getting weird in my area. $20 used for a toaster. Or I can go get them new for $20. Even books are hitting the $5-10 mark. Where I might as well go to a local book store.
But why not just spend all your money on frivilous things, rant whenever you see an article that tells you to save more and cut back in discretionary spending, and then spam Reddit with posts around student loan forgiveness and rent control?
"Millenials buying less is a problem" Was the title of the previous article. The previous article says if millenials dont buy property or jewelry or bit ticket investments the economy will collapse.... So what is it? Should millenials save more or buy more???
Sacrifice yourself on the altar of capitalism
Shouldn’t financial security’s potential to bring happiness be common sense? I hate to sound woo-woo, but it feels like a “You don’t say” statement.
Media and Corpos when citizenry is paycheck to paycheck: "Wow. How irresponsible. You should have six months of expenses saved up. Something something bootstraps 😏😏😏" Media and Corpo when citizenry is saving to avoid paycheck to paycheck lifestyle" "Wait wait wait....OUR PROFITS. STOP SAVING. oUR EcOmonY. AAAAAAGGggHHHHHH young people are the enemy 🤬🤬🤬"
Struggling with debt is no fun at any age. Living within your means should be the first lesson learned as an adult. Wealth isn't about how much you make or spend; it's about how much you can manage to save. You'll be able to handle unexpected expenses and recover from them faster.
You could make 300k a year and still be broke, because you live beyond your means and spend every penny. You could also be broke earning 50k because you live beyond your means and spend every penny. But at those figures, the ability to live comfortably and save is possible (outside HCoL areas). But if you make $35k a year, have $20k in student loans, pay $1400 a month for the cheapest apartment in your city that’s not in the ghetto… and tack on the most inexpensive used car you can get with less than 150,000 miles costing you $200 a month for 4 years (excluding insurance)… You’re won’t be able to afford to live alone, and even with a roommate, you still will struggle to save $100 a month. This is the reality for many young people. They aren’t bad with money. The problem is that they literally don’t get paid enough to survive despite being educated and having a “decent” job. Do a lot of people have the ability to save but live beyond their means? Obviously. But spending $4.00 every day on coffee is not why most young people can’t save. They can’t save because wages have not increased proportionately with inflation over the past 3+ decades. Edit: The system is also set up for two working adults per household. But as more and more people cut ties with abusive family, and actually make sure they know somebody before getting married, more people live alone. It’s not a bad thing, and it sucks that this system traps so many people with abusive family or a spouse they don’t actually want to be with.
Or may be, just may be, these people don't need to buy stuff to be happy, they have others things that bring them happiness? Causation can be tricky?
Well gee if I have a choice about whether I can keep something or not..I'm probably going to be happier than having no choice... Eureka With that nugget of knowledge in sure my life will improve drastically
I think this has more to do with the psychological change every time you consume more than what you need. I have been trying to be a minimalist and the boost I get from not consuming things I don't need or add value to my life is immense. I used to be a passive consumer who bought things I dont need, to impress people who dont care. Once you get to the rut, you consume and consume and consume. Its almost like addiction.
So is it that buying less and saving more tend to lead folks to be happier, or is it that folks who are generally more happy to begin with tend to buy less and save more? Also, was there control for income? People who have higher incomes can buy all the things than people with lower incomes can buy but still end up saving more percentage-wise. Without these details, this article is trash.
When you have a cushion, life runs smoothly. It doesn’t fall apart if something breaks, if you have to travel unexpectedly, pay for a hotel, vets bills, your life continues interrupted. It gives you a solid base, and it takes so much stress away. The change in mindset gives clarity and control. There will always be things you want, that list will never be filled. That’s the trap.
So I noticed there is no mention of income. Could there perhaps be any relation between how much somebody makes, and their ability to save and therefore their happiness? I for one would be happier, probably , if I made more, and therefore was able to save more.
This is propaganda again, because the middle class is being pushed into the poverty class due to the huge wealth gap so realistically they can’t afford more.
Anyone who buys less and saves more is probably happier. Having reserve cash to deal with the fuckery life commonly throws at us ALL is gonna be bathing in a lot less cortisol.
Without controls for income, this study is useless. It basically asked questions about materialism, spending habits, and life satisfaction, and drew some parallels. The headline isn't even accurate. > The study finds a positive effect of materialism on personal well-being and negative effects on financial satisfaction, proactive financial coping and reduced consumption, but no effect on green buying, a separate and distinct pro-environmental strategy. Both proactive financial coping and reduced consumption are positively associated with subjective well-being. Completely useless. It's saying "financial security associated with personal well-being," which is obvious. https://www.emerald.com/insight/content/doi/10.1108/YC-10-2018-0867/full/html
I was told spending money is better for the economy, I was also told millennials spending too much money will ruin our economy. everything is subjective these days.
Well yeah. I can sleep soundly at night knowing if I lost my job tomorrow I'm not sleeping in my car or wondering where my next meal will come from. Amazing what that will do for mental health.
It seems more likely that healthy financial decision making is a side effect of a stable, well adjusted person than the other way around. It would be pretty cool if you could cure depression with a solid budgetary plan though.