In your 20s/30s feeling down on your luck about job situation and your future? Read this - it will [not] cheer you up!

[Armitage]

Originally posted by: mithrandir2001

Originally posted by: Shockwave
Ameesh, you dont strike me as someone who's in the real world yet. How old are you??

Viper. Man, I hope it works for you. Hell, I couldnt HOPE to save 750 a month. My rent alone is more then that. Plus, what really kills me is the fact my 1 income has to support 5 people (Me, the wife, 3 kids) I probably wont hit the dual income stage until 30ish, when the kids are really old enough to handle themselves so the wife can seriously pursue a career.

It adds up fast, the bills. I'd say an average for most people would be...

600 rent
400 car + insurance (Thats a 4 wheel car, not some fancy crap)
200 utilities (Assuming basic cable, regualr phone, etc etc)

Thats 1200 a month, just in stuff you HAVE TO HAVE to survive (except a car, but lets be realistic) That doesnt include food, upkeep for said car (gas, oil, tires) doesnt include an occasional movie or going out (Unless you have NO social life), doesnt include ANY other payments (CC, student loan)

So, my question is, how much do you think someone in the real world livin on their own can really save?? I know few people who's bi weekly paycheck totals 1200 after taxes. Well, among my friends, among my co-workers, thats actually probably the smallest of the paychecks handed out. Too bad its mine

Either way, people who DONT fully support themselves really have no room to tell us who DO support ourselves, and others, just how easy it is to save or any other crap like that. Now, if you ARE supporting yourself and can save like that, hell, I applaud you!! But, alot of people just dont realize how hard it is, especially if you have any obligations other then yourself (kids, a fish etc etc)

I hate to say it but you can't afford kids anymore.

Fine, that is a stupid statement but there is some validity to it. The people who are most financially stretched where I work are the ones with kids. Singles and childless couples typically aren't always crying the blues like the working parents are. Child care is a big problem. It's very expensive. We have an on-site child care center at work and it costs around $500 per child per month (varies based on age, of course). That's not chump change. My mortgage's P&I is $656 so in that light the costs seem ridiculous.

On the other side of the coin, my sister works in a day care center and she gets paid crap. I think she makes around $8 an hour with medical benefits. This is simply unacceptable compensation, I think, for somebody with a 4 year degree and a state certification. She can't live on her own, not in the suburbs and not without looking and living like a rat. She lives at home, like I did.

So day care costs are too high, but day care workers are underpaid.

The Moonbeams of this world will argue that we manufacture our own problems, that our materialism breeds a lifetime of debt and financial struggle. Perhaps, but I think the real problem is our burdening government, who taxes too much and spends too much and has almost single-handedly destroyed the middle class in this country. About half of my income goes to taxes: Federal, state, county, local, sales, gasoline, alcohol taxes, telecomm surcharges, regulatory fees. We don't work for ourselves, we work for others, the government. If we don't have enough money to save for our future, it's because too many arms of government have laid claim on our earnings.

And of course, the new "epidemic" is that women are having children too late. Unlike men, women must fight a biological clock when wanting to bear children. Some are waiting until they are 35, 40 or even older before they have their first child. I can't blame them. If I had to support a child, that would cause havoc on my financial plan. Children are expenses, they do not provide any income, not for a long, long time, if ever. Of course I am being very clinical and cold about this, but when you look at how financially troubled many people are, you have to wonder if kids should be in the picture. Yes, pro-creation is a necessary function for the species to survive but modern realities seem to suggest otherwise.

Yea, daycare is outrageously expensive, yet still pays barely better then minimum wage.
Whaere is all that money goig?

My guess is insurance. Liability insurance for daycare has got to be outrageous.
Yet again, the lawers rape us.

Of course, it's not just the lawyers, they're just the opportunistic parasites that lubricate the system & reap most of the benefits.
Alot of it is idiot juries, and insurance companies that cave in & settle instead of fighting.

In any case ... daycare is our second highest single expense after the mortgage. Can't wait to get out from under it.

 

[vi edit]

Guy I work with actually had his wife quit teaching because they damn near saved more with her taking care of the two kids full time than with her second income.

 

[bsobel]

Savings are good, but remember that a balance statement is cold. You derive no pleasure from money itself, only when you convert the money into goods and services. Moderation, moderation, moderation. You need to create a financial plan where you save an appropriate amount and still have money left over for fun. Too much of anything isn't good, including saving too much.

I learned all I needed to know about finance from the 3 S's. Spend some, save some, share some.

Bill

 

[OutHouse]

I will be 34 next monday. I dont think im in that bad of shape considering i was in the military from 18-28 and everybody knows you dont make a whole lot of money in the military. I have been out for 5 years now and landed a pretty good paying job, have bought a house, paid off my two cars, started a 401K.

I dont know where they got those numbers that at age 32 you should have 100K in cash, but i sure dont fall into that catagory, would be nice though. I would say between the equity that i have in my house, 401K and other assests i have about 50K.


Viper, i applaud you if you can keep up your plan for the next 10 years and meet your goal. but 10 years is a LONG way away and many things can change like kids....

 

[OutHouse]

Originally posted by: vi_edit
Guy I work with actually had his wife quit teaching because they damn near saved more with her taking care of the two kids full time than with her second income.

I am one of those. My wife was a teller until we had our third and last child. the cost of daycare for 3 kids was more than what she would have made working 40 hours at the bank. she quit and hasnt looked back and really enjoys being betty crocker.

 

[StageLeft]

Starting now, at age 20, a modest contribution of $750 a month with a mere 4% interest will yield over $100K by the time I'm 30.

Especially if you have two incomes, $750 a month really isn't that much. I know several individuals my age who spend more than that on their car + insurance.

Viper GTS

That may be possible for you but others cannot do this. Take me and some of my friends for example: Got out of school when I was 22 with about $20k CAN in debts. I've only been in the market 2.5 years, 6 months of which was spent unemployed. Now if I lived alone with my parents most of my cash could go into saving up and $750 month is child's play, but when you're in an apartment and have to pay for everything yourself, plus supporting a spouse while they get through school you're doing well if you can break even. When it really comes down to it many many people can't even start work properly until they are 23 or 24 and due to debt or other uncertainties having $750/month left over isn't easy; and at that point $750/month isn't gonna cut it anyway.

Lots of people waste money on cars. I've never done it and have been good with money for the last couple of years, but still I'll never have $100k by the time I'm 30. Just too many things that pop up that you never expect to curtail that ambition.

 

[Gand1]

I'll be 32 in January. 100K in worth is not happening for me. Unfortunately I was not well supported by my parents so I'm STILL attending college. I have a decent job now working for the state at a bit over 40k a year, I rent at 550/month, have a betty crocker for a wife and no children. It's not financially worth it for my wife to work. I have about $13K in a 403b (state job thing) and that's about it. Life throws a lot of unexpected things at you. I just spent 2K getting the cat fixed! (Bladder problem) I applaud those who are working hard and are saving the money to support themselves. As for the ones who have mommy and daddy pay for thier world..... reality really needs to kick you guys in the balls!

 

[Zebo]

Good thread

and the Secret is dual income


For middle class incomes that is.. I was broke making 60K but no debt.

 

[StageLeft]

Originally posted by: Carbonyl
Good thread

and the Secret is dual income


For middle class incomes that is.. I was broke making 60K but no debt.

You can say that again. We've been on my income alone for the past couple years. We're doing ok, but still drive a 93 sentra, so that we don't blow ourselves up buying a new car. I can't wait until the day mrsksoorb gets past this red tape BS and gets her damn nursing license in the mail!

 

[wyvrn]

By the way 401k's are not the only way to invest My wife and I have income real estate, which helps a little. It will help a hell of a lot more once we pay of the mortgage, I figure about 80% of the monthly income then will be profit

Studies show that the upper class is taking more percentage of the wealth in this country. US has the biggest income gap between rich and poor of any industrialized nation, according to census figures printed in my Govt. book this semester. That means middle class and poor are depending on their jobs for their income, and not doing anything else. Employers cut costs (salaries and labor), which means the middle and lower class will never be able to catch up unless.. they use the tactics the rich use to grow money. Stop putting all your money into low interest accounts (like checking, savings, cd's and money markets) or liabilities like cars, gadgets, and monthly services, and move them to higher risk, higher yield investments. This means real estate, 401k's, life insurance, businesses, etc.. I have begun doing this and I see that financial freedom is attainable in my lifetime for my wife and myself. The US is still the land of opportunity for those willing to put in the work to get there. My advice: go to the library and read up on investing and business, and do something more than just work for someone else for a living.

As far as taxes go, the US also has the lowest tax rate of the industrialized nations. While many people feel like our govt. robs us in taxes, they need to check the income (gas, etc..) rates in other countries and do a reality check. I am personally amazed that citizens of the US pay relatively little in taxes and have such a great quality of life when compared to other countries, overall.

 

[Zebo]

Originally posted by: Skoorb

Originally posted by: Carbonyl
Good thread

and the Secret is dual income


For middle class incomes that is.. I was broke making 60K but no debt.

You can say that again. We've been on my income alone for the past couple years. We're doing ok, but still drive a 93 sentra, so that we don't blow ourselves up buying a new car. I can't wait until the day mrsksoorb gets past this red tape BS and gets her damn nursing license in the mail!

Nursing by Mail? My wife is a RN. She had to go to school 5 years to get a B.S. in nursing. Hey whatever works. Good thing is she works graves so we spend nothing on child care since someone is always home day or night (she sleeps when the 2 kids are at school and one sleeps with her). Something to keep in mind when your wife/gf graduates.

 

[mithrandir2001]

Originally posted by: Skoorb
Lots of people waste money on cars. I've never done it and have been good with money for the last couple of years, but still I'll never have $100k by the time I'm 30. Just too many things that pop up that you never expect to curtail that ambition.

Cars are evil!

I am a Quicken fiend. I've recorded every single expense I've made since late-1996 in my Quicken file. And I mean everything. My registers show a total of 7197 transactions.

Anyway, a nice thing about being so anal with your finances is that you can learn a lot about your spending patterns. Quicken says I have spent $58,000 on automotive items since 12/13/1996. Automotive items include car payments, fees, fuel, maintenance, repairs, highway tolls and insurance. The whole shabang. That's a little over $800 a month. It's too much for prudence but that's what happens when you buy a new car, drive it 18 months, buy another new car, drive it 29 months, buy yet another new car and drive it 22 months to the current day. I'm sure a nice chunk of that $58,000 is depreciation.

But yet look at this board. NFS4 is always bringing us car news and these topics are some of the most popular here. Young people love cars and we spend too much on them. Heck, I haven't even riced up a car...that's gotta cost a pretty penny.

But wyvrn makes a good point. We middle class dummies are the ones buying the new cars (or worse, SUVs) and losing much of our earnings to asset depreciation. You need private transportation, obviously, but many of us buy new cars too often. They are poor uses of money.

Of course, the benefit I realized from new car ownership is that I never really worry about getting stranded or dealing with endless problems and repairs. I like gas-and-go. The prudent thing is to buy a new car to satisfy the thirst for crisp, clean sheetmetal but keep the damn thing for 5+ years. Ugh, that sounds like sacrifice. <clenched fists>

 

[Stallion]

I have an excelent 401k. For every dollar I put in my company puts in 50 cents up to 8% of my check. But I can put 20% of my check into my 401k. I have been in it now for about 12 years, at times I was only contributing 10% but I am doing quite well and am 36.

They also pay all my school fees and up to 1K for book per year. All i need to do is pay the tax on my school tuition when ever it goes beyond $5,250 a year. Which is nothing. So if school is 20K a year it will cost me about 1,800 bucks.

The bad thing is I'm not sure how much longer I'll be working here. It looks like we're at the up swing but that can change very fast.

 

[bizmark]

ok I haven't read the thread yet so sorry if this has been said before (hey, it's a Skoorb thread after all ) but I've just gotta say BLEARGHHH!!! It's a pregnant Prince on crack!

 

[B00ne]

Originally posted by: shifrbv
I think people just need to get used to the idea that retirement is just a buzzword in the historical scheme of things. We'll be right back to the way things have been for most of history. That is, people worked until they died and life was harsh. The sooner we lower our expectations and face this reality, the easier it will be to deal with it.

Just that most ppl dont even reach retirement age working. I am not totally sure if it is most ppl but it seems like it, PPl above 50 get laid off first and they will never find a job again (usually).

 

[IGBT]

So what's the bottom line here? America's in decline? How come there seems to be plenty of jobs for forign imported labor? Many of the engineering new hires are comming from India and Pakistan..why is that??

 

[vi edit]

Originally posted by: IGBT
So what's the bottom line here? America's in decline? How come there seems to be plenty of jobs for forign imported labor? Many of the engineering new hires are comming from India and Pakistan..why is that??

Bottom line is that those of use in our late teens to mid to late 20's are getting a wake up call. The stock market is volitile, $20,000 sign on bonuses are not the norm, you have to be wise with your investments, you have to wise of your spending, and finally, job markets are volitile and you always need to be improving yourself to make yourself more marketable/valuable to a current/future employer.

 

[crystal]

Originally posted by: kt

Originally posted by: mithrandir2001

Originally posted by: MaxDSP
im about to turn 21 next month and graduating in february with my loans amounting to about $11k. I have about $12K saved up from working since i was 16 so Ill easily be able to pay the loans back within a year, if not less. My income per month after taxes is about $1700.

Don't plow your $12K savings to pay off your $11K student debt. Thanks to low rates, student loan debt isn't expensive and it's also tax-deductible, even if you don't itemize. Pay it down, of course, but make sure you keep some cash on hand.

Yup, I have an idiot friend who did this. He has about $15K in student loans and he somehow saved up $20K from working. After he graduated, he paid off ALL his loan at once. I asked him why he did that. His answer was, "I don't want to be in debt".

Low interest rate only happen in the last year or so... But no debt is really a good thing. You don't have to worry about it. Let say he chooses to make min. payment. with 8.5% for that loan. He had to make at least 12-15% on interest on that money ($20k) to break even. That is because of taxes on your interest. So he might not be stupid after all.

 

[mithrandir2001]

Originally posted by: crystal

Originally posted by: kt

Originally posted by: mithrandir2001

Originally posted by: MaxDSP
im about to turn 21 next month and graduating in february with my loans amounting to about $11k. I have about $12K saved up from working since i was 16 so Ill easily be able to pay the loans back within a year, if not less. My income per month after taxes is about $1700.

Don't plow your $12K savings to pay off your $11K student debt. Thanks to low rates, student loan debt isn't expensive and it's also tax-deductible, even if you don't itemize. Pay it down, of course, but make sure you keep some cash on hand.

Yup, I have an idiot friend who did this. He has about $15K in student loans and he somehow saved up $20K from working. After he graduated, he paid off ALL his loan at once. I asked him why he did that. His answer was, "I don't want to be in debt".

Low interest rate only happen in the last year or so... But no debt is really a good thing. You don't have to worry about it. Let say he chooses to make min. payment. with 8.5% for that loan. He had to make at least 12-15% on interest on that money ($20k) to break even. That is because of taxes on your interest. So he might not be stupid after all.

Interest rates aren't at 8.5% which is why it's probably better not to accelerate debt repayment. Sure, being debt-free is nice but what's the point if it means you have to use up all your cash to pay off the debt. Should you need cash in the future, you might have to use credit cards or unsecured bank loans. These are going to be much more expensive than student loan debt. Cash is good. Milk the loans while rates are low.

 

[SuperTool]

The problem is that if your interest payment on student loan is less than the standard deduction, it doesn't help you at all.
On the bright side, the interest rate on college loan is 4% now.

 

[Martin]

a nice warning for my generation.


If all goes well, I'll graduate in 2007 with ~10k in loans, computer engineering degree and 16 months work experience. Not a bad start I reckon.

 

[LAUST]

Good article... very sad I know, but it's nice to see the truth come out for once in this fading republic.

 

[SagaLore]

Originally posted by: Skoorb

Halfway to pension age, she has just $5,000 in a 401(k) and $20,000 in home equity. Ideally, someone her age should have at least $100,000 stashed away. "I don't have a corporate pension, and they aren't what they were," she says. "Social Security is obsolete and ineffective. And I already know that I'm going to have to have a private health-care plan. I'm angry that I can't seem to get a break."

On the one hand I want to tell her to buck up and start taking responsibility for her actions, but the fact is I won't have $100k saved up by the time I'm 32, and I'm way better with money than the vast majority of people my age. That's only 8 years away. I've only been out of school a few years and with the loans I have (which are below average), it's still not doable. For me personally job stability is far and away the biggest concern. Give me secure employment (at reasonable pay) and I know 100% that I will have the money I need to go into retirement at an early age.

Another thing is that I'm doing better than many people my age and yet I still worry constantly about my financial future. Hell I have a friend with his degree who is now entering month 16 of unemployment! It's sad but another guy I went to school with who was smart went to work at Avis renting cars after university, and only go that through connections.

There is almost no area in the economy right now that a person can confidently enter and know that they will have employment in the future. Health care is about the only one and since most people don't want to be a doctor or don't have what it takes to be one, that leaves nursing or other health care professions. Beyond that what can a person really do but hope they get lucky coming out of college in debt? More than half the people my age from home still live with their parents because they don't even have "real" jobs. F**king sucks!

Word of Advice for people: Go to college for a degree you know you're going to get a good job in to pay it back.

Another Word of Advice for people: Paying back your student loans wouldn't be such a hassle if you'd had not blown your credit on shoes and beer for 4 years

Last Word of Advice for people: Don't ever rent if you can get out of it. Stay at home if you're in college, and saved up for buying a house, don't settle with renting.


<------ is 22, owns own home (reasonable for living), has most of credit cards payed off, is married, money to spare at end of each month -- I'm a statistical anomoly

 

[DevilsAdvocate]

29 years old. Recent law school graduate. No permanent job. None on the horizon.

F*ck. :|

 

[crystal]

Originally posted by: mithrandir2001

Originally posted by: crystal

Originally posted by: kt

Originally posted by: mithrandir2001

Originally posted by: MaxDSP
im about to turn 21 next month and graduating in february with my loans amounting to about $11k. I have about $12K saved up from working since i was 16 so Ill easily be able to pay the loans back within a year, if not less. My income per month after taxes is about $1700.

Don't plow your $12K savings to pay off your $11K student debt. Thanks to low rates, student loan debt isn't expensive and it's also tax-deductible, even if you don't itemize. Pay it down, of course, but make sure you keep some cash on hand.

Yup, I have an idiot friend who did this. He has about $15K in student loans and he somehow saved up $20K from working. After he graduated, he paid off ALL his loan at once. I asked him why he did that. His answer was, "I don't want to be in debt".

Low interest rate only happen in the last year or so... But no debt is really a good thing. You don't have to worry about it. Let say he chooses to make min. payment. with 8.5% for that loan. He had to make at least 12-15% on interest on that money ($20k) to break even. That is because of taxes on your interest. So he might not be stupid after all.

Interest rates aren't at 8.5% which is why it's probably better not to accelerate debt repayment. Sure, being debt-free is nice but what's the point if it means you have to use up all your cash to pay off the debt. Should you need cash in the future, you might have to use credit cards or unsecured bank loans. These are going to be much more expensive than student loan debt. Cash is good. Milk the loans while rates are low.

Hey, that 8.5% was what my load interested when I have to pay for it. But no matter what, if you think your cash can not pull in more money (higher interest gain) than the loan, you will loose money. For example, let say right now interest for student loans is 5%. Do you think the cash you have right now will have ROI of 5% (+ taxes) or higher if you invested it? BTW, as for the guy case, 5k is more than enough for the rainy day. And remember, from this day forward, he can saves more and not worry about payment.