Generation Y and Z Debt

[kirk89gt]

The root of this is not a Republican problem or a Democrat problem...the root is a parenting problem.

Parents need to counsel their children (young adults) wisely, and to diligently be realistic in their kids abilities. Watching kids go to college without an end game is largely a sign of bad parenting advice. And this is one mistake that can be extremely costly!

Little kids....little problems. Bid kids...big problems.

Especially when the parents haven't "figured it out" yet and are "getting by" on a shoestring budget, or no budget at all. A lot of learned behaviors there.

While I agree that it is harder for the middle class to make it in today's age, it appears that we confuse "wants" with "needs" waaayyyyyy to much. I look at the differences between what is standard by today's......well standards, and what would have been considered standard even a generation ago and the costs of said new standards. Keep in mind that this is a very conservative look at things (i.e. no crazy sport fees / associated travel expenses, etc.).......On a personal side note, I was pretty proud that I went without internet in the home for ~9 years. No way I can do that now with the kid and their toys, and more importantly, their school work - kind of forced the issue.

Today's typical expenses (most of which didn't exist, or were more affordable 20 years ago)
Phones - $50-$60 per phone / per month - $600-$700 per year per phone
Cable - $125 / month - $1500 / year
Internet - $75 / month -~ $1K / year

For a family of four - that is about an extra $5K / year just to "keep up with the Jones'".

This isn't including taxes, mortgage payments, vehicle payments (which seem like another house payment), monthly expendables (food, utilities, fuel, etc. all of which have gone up) and any other convenience items / monthly expense (Amazon Prime, App fees, etc.).

At the end of the day, we gotta be disciplined and say no, way more than we say yes. That is becoming increasingly more difficult (especially when you have kids and with the way we as a society have shifted to shying away from conflict / confrontation).

 

[coolerifyoudid]

I imagine there's something psychological going on. As an old millennial (born in the early 80s), I've had somewhat of this experience. My guess is that we were always told to "follow our dreams/passion." So we did that and then realized real life is not all rainbows and butterflies. There is no such thing as a "dream job" there are just jobs that are fun more than they are not. You're not going to find your "soul mate" where every moment is bliss, you're going to find someone you love despite the things about them you don't like. There will always be stresses: money, relationships, society, whatever.

In general, my generation tends to be idealistic, in my experience. So we build up this big event (entering the "real world") expecting that it's going to be soooo amazing. And then we realize, it's just life. Just like our parents and our parents before them. It's not bad, but it doesn't meet idealistic expectations. So we freak out a bit. We wonder if we're going about it the right way. Do I have the right job? Am I living in the right place? Should I change fields? We want to make the most of our time on earth and not waste our youth doing things we don't enjoy. So we spin ourselves up trying to find the "perfect" life because we're not living the one we imagined when we were 20.

Just my $0.02.

As a Gen Xer, I feel like this description fits most of my nieces and nephews pretty accurately. My generation grew up as the "whatever" generation and, while it's a blanket statement, it's contains some accuracy. From a schooling standpoint, my nieces and nephews had more opportunities for entering college with significant credits, but they also had the added pressure of being the first generation that needed to have their future careers picked out before entering college. For myself, I was encouraged to take a few classes and figure out what suited me. I feel pretty fortunate about that. I was not in any kind of position to make those choices in high school.

I think as my generation has aged and had kids in the social media age, there has also been an increased urgency to make up for some of our own shortfalls. A lot of that pressure is getting passed along to our kids. "Here's a picture of us on vacation, at a sporting event, with our new car, etc." So many people use their kids as self-marketing tools for their friends. And yet we wonder why kids seem self-absorbed, why they feel the need to succeed and have the perfect life, and why making mistakes is something that other people do.

 

[Sigmapolis]

As a Gen Xer, I feel like this description fits most of my nieces and nephews pretty accurately. My generation grew up as the "whatever" generation and, while it's a blanket statement, it's contains some accuracy. From a schooling standpoint, my nieces and nephews had more opportunities for entering college with significant credits, but they also had the added pressure of being the first generation that needed to have their future careers picked out before entering college. For myself, I was encouraged to take a few classes and figure out what suited me. I feel pretty fortunate about that. I was not in any kind of position to make those choices in high school.

I think as my generation has aged and had kids in the social media age, there has also been an increased urgency to make up for some of our own shortfalls. A lot of that pressure is getting passed along to our kids. "Here's a picture of us on vacation, at a sporting event, with our new car, etc." So many people use their kids as self-marketing tools for their friends. And yet we wonder why kids seem self-absorbed, why they feel the need to succeed and have the perfect life, and why making mistakes is something that other people do.

Social media has definitely allowed people to present an idealized version of their personal, home, and professional lives to their peers -- and it makes those peers feel worse and worse about themselves. What used to be private is now performance.

I think smaller families has something to do with it, too. When you are the only child or one of 2-3, it is easier to think you are important. My dad was 1/6 and my mother 1/5. Easier to realize the world doesn't revolve around you in such a family situation.

 

[coolerifyoudid]

Social media has definitely allowed people to present an idealized version of their personal, home, and professional lives to their peers -- and it makes those peers feel worse and worse about themselves. What used to be private is now performance.

I think smaller families has something to do with it, too. When you are the only child or one of 2-3, it is easier to think you are important. My dad was 1/6 and my mother 1/5. Easier to realize the world doesn't revolve around you in such a family situation.

I am the youngest of 8. Are you saying I'm not important?!?

 

[Sigmapolis]

I am the youngest of 8. Are you saying I'm not important?!?

Yes. You probably were not daddy and mommy's singular special little snowflake.

 

[Halincandenza]

They are useless because I recognize the realities that most people learn their jobs on the job and higher education mostly serves the purpose of signalizing/sorting.

Nobody has even tried to refute those points -- mostly because they are generally true.

You are right that a false premise leads to a false conclusion. But they ain't false.

Yeah they are. Just because you have an opinion doesn't make it true.

 

[Sigmapolis]

Yeah they are. Just because you have an opinion doesn't make it true.

Your lack of an attempt to refute it does not fill me with confidence about the validity of your point. Humans learn useful skills by doing and experience. It is our nature.

 

[SEIOWA CLONE]

They are useless because I recognize the realities that most people learn their jobs on the job and higher education mostly serves the purpose of signalizing/sorting.

Nobody has even tried to refute those points -- mostly because they are generally true.

You are right that a false premise leads to a false conclusion. But they ain't false.

So a person could become a doctor because they have watched every episode of Gray's Anatomy three times and visited their grandma when she was sick at the hospital? Watching Perry Mason does not make a person a lawyer, only going to college and getting the degree and then passing the bar exam does that.

Just because you are not using your education is your current work does not mean it was silly or not important to get the degree.

You learn a lot about yourself and others while in college, its more than just learning the major you are studying.

 

[Peter]

You've strayed from my original post quite a bit..

And to answer your questions, you join the military and make that equation work if you can't figure out another way to do it economically...

Why should someone have to join the military just to get an education? And why should our military be saddled with the ever increasing costs of college? Why don't we just make college affordable again?

The problem is colleges can charge literally whatever they want because there is an unlimited supply of loan money for students to borrow. End the gravy train, and make loan money contingent on tuition. If a university charges over $10,000/yr (or whatever the number), they are not eligible to receive federal student loans.

Additionally, we should increase the income threshold for pell grants, etc., and make community college and trade schools free. Help people get the training and education they need rather than demonize them for going into debt.

 

[Peter]

Especially when the parents haven't "figured it out" yet and are "getting by" on a shoestring budget, or no budget at all. A lot of learned behaviors there.

While I agree that it is harder for the middle class to make it in today's age, it appears that we confuse "wants" with "needs" waaayyyyyy to much. I look at the differences between what is standard by today's......well standards, and what would have been considered standard even a generation ago and the costs of said new standards. Keep in mind that this is a very conservative look at things (i.e. no crazy sport fees / associated travel expenses, etc.).......On a personal side note, I was pretty proud that I went without internet in the home for ~9 years. No way I can do that now with the kid and their toys, and more importantly, their school work - kind of forced the issue.

Today's typical expenses (most of which didn't exist, or were more affordable 20 years ago)
Phones - $50-$60 per phone / per month - $600-$700 per year per phone
Cable - $125 / month - $1500 / year
Internet - $75 / month -~ $1K / year

For a family of four - that is about an extra $5K / year just to "keep up with the Jones'".

This isn't including taxes, mortgage payments, vehicle payments (which seem like another house payment), monthly expendables (food, utilities, fuel, etc. all of which have gone up) and any other convenience items / monthly expense (Amazon Prime, App fees, etc.).

At the end of the day, we gotta be disciplined and say no, way more than we say yes. That is becoming increasingly more difficult (especially when you have kids and with the way we as a society have shifted to shying away from conflict / confrontation).

Knock knock. Its the 21st century. If you don't have a phone or the internet you are probably living off the grid in an Amish community.

 

[kirk89gt]

At the end of the day.........Life is tough and it isn't for the faint of heart. It isn't all lollipops and puppy dogs. Like my grandfather used to say. There are only two things you are entitled to in this world, "Breathing and sh***ing...... and that is only if you eat enough."

What helps make it more bearable are those closest to you (Family - can't choose these, friends - choose these wisely), being comfortable / confident / in love with with who you are, what you are doing, and where you are going- not giving a hoot for what others are doing. Having said all of that, you are still going to screw up, make bad decisions, and if you live long enough, life is going to test you, knock you down, throw you curveballs and knuckleballs, that you could never imagine. How you choose to respond speaks volumes about you as a person, and your character. Don't fear mistakes. Some will say that if you aren't screwing up, you aren't stretching yourself and your capabilities enough. The key, if you can help it, is to avoid the "Oh, sh**!" mistakes. This thread's topic can easily be one of those mistakes that you can pay for (literally and figuratively) for a very long, long time.

Where I believe education is valuable comes in is helping get you in the habit of learning and learning how to learn. These are valuable lifelong skills and bell weathers for prosperity in a capitalist society. There are many ways to skin this cat and it doesn't mean you have to end up six figures in the hole to do it. As an employer, the days of doing the same thing 1000 times a work day are over (hired from the neck down). Employers need problem solvers and employees that can think and figure things out (hired from the neck up). Being able to pick up and figure things out is a valuable life skill that translates into the workplace and employers will pay up for.

 

[SEIOWA CLONE]

And what are we teaching others if we say..don't worry about individual responsibility, we will just add the expense to others or to future generations?

Is it greed when we want others to pay for the services they choose to use? No one is forcing anyone to go to college, and the idea that a college degree is the only means to financial success is false.

We are telling "welcome to the Republican Party."

 

[Sigmapolis]

So a person could become a doctor because they have watched every episode of Gray's Anatomy three times and visited their grandma when she was sick at the hospital? Watching Perry Mason does not make a person a lawyer, only going to college and getting the degree and then passing the bar exam does that.

Just because you are not using your education is your current work does not mean it was silly or not important to get the degree.

You learn a lot about yourself and others while in college, its more than just learning the major you are studying.

My wife spending three years as a resident, under the close supervision of more experienced fellows and attending physicians, and then three more years as a fellow learning about her specialty again under the supervision of experienced attending physicians, before becoming an attending herself and being able to practice on her own/supervise others, as somehow being the equivalent training to watching Gray's Anatomy is a ludicrous comparison on your part. You should feel ashamed for such a malicious and bad faith comparison.

 

[kirk89gt]

Knock knock. Its the 21st century. If you don't have a phone or the internet you are probably living off the grid in an Amish community.

Smart phones and their popularity aren't that old (~10 years) and internet (good, usable internet - in addition to something on the other end that is mildly useful) hasn't been around that long.

 

[Sigmapolis]

Why should someone have to join the military just to get an education? And why should our military be saddled with the ever increasing costs of college? Why don't we just make college affordable again?

The problem is colleges can charge literally whatever they want because there is an unlimited supply of loan money for students to borrow. End the gravy train, and make loan money contingent on tuition. If a university charges over $10,000/yr (or whatever the number), they are not eligible to receive federal student loans.

Additionally, we should increase the income threshold for pell grants, etc., and make community college and trade schools free. Help people get the training and education they need rather than demonize them for going into debt.

Moving the bill from the Department of Defense to the Department of Education and from the state of Iowa to the federal government does not mean there is no longer a bill. You have just put it somewhere else, but the public costs are ultimately the same.

The rest of your post brings up a very good point -- military service is far from the only way to Moneyball your way through college. There are income-based grants and scholarships, like the Pell Grants, there are academic scholarships, RA and TA positions, other work, and then things like earnings credits at a JUCO before transferring to a four-year school. I did a combination of many of those to make it through debt-free through my MA at ISU.

On top of that, I guarantee I have paid off more in student loans than anybody else in this thread. I paid off my wife's nearly $200,000 student loan bill right before we got married, using only my earnings from my software sales job. I have been on both sides of this -- making it through as cheaply as possible AND facing down the most mountainous student loan bill one can basically imagine at this point. And I survived and did fine nonetheless.

The Brookings study says the average loan for an undergraduate is $16,000. Forgive me, for somebody who paid off something around 12x that, if I do not find the cost of a decent used Camry on the back of a 25 year old to be a "national crisis."

 

[SEIOWA CLONE]

My wife spending three years as a resident, under the close supervision of more experienced fellows and attending physicians, and then three more years as a fellow learning about her specialty again under the supervision of experienced attending physicians, before becoming an attending herself and being able to practice on her own/supervise others, as somehow being the equivalent training to watching Gray's Anatomy is a ludicrous comparison on your part. You should fee ashamed for such a malicious and bad faith comparison.

Sure its a malicious and bad faith comparison, just like you saying "you do not go to college, and you can learn it on the job".
The fact is your wife would not be allowed to do a residency, or fellow learning, if she had first not achieved an undergraduate degree and then attended and graduate from med school.
Whether is fair or not really does not matter, those are the rules, and we are not the ones that get to change them.

 

[Halincandenza]

Your lack of an attempt to refute it does not fill me with confidence about the validity of your point. Humans learn useful skills by doing and experience. It is our nature.

Your point was not backed up by any evidence or facts. Just your opinion. Asking me to refute it is like asking me to refute the assertion there are leprechauns.

I have not denied you learn on the job. Here is your argument though.

1) you learn a lot of stuff on the job you didn't learn in school
2) what you learn in school is useless
2) therefore what you learned in school is useless and education isn't needed nor are certificates

You accuse someone of begging the question when that is exactly what you did.
I am an attorney and the information I learned in law school wasn't useless. Far from it. I would say it it was essential to me in order to be able to perform my job competently.

 

[Halincandenza]

Moving the bill from the Department of Defense to the Department of Education and from the state of Iowa to the federal government does not mean there is no longer a bill. You have just put it somewhere else, but the public costs are ultimately the same.

The rest of your post brings up a very good point -- military service is far from the only way to Moneyball your way through college. There are income-based grants and scholarships, like the Pell Grants, there are academic scholarships, RA and TA positions, other work, and then things like earnings credits at a JUCO before transferring to a four-year school. I did a combination of many of those to make it through debt-free through my MA at ISU.

On top of that, I guarantee I have paid off more in student loans than anybody else in this thread. I paid off my wife's nearly $200,000 student loan bill right before we got married, using only my earnings from my software sales job. I have been on both sides of this -- making it through as cheaply as possible AND facing down the most mountainous student loan bill one can basically imagine at this point. And I survived and did fine nonetheless.

The Brookings study says the average loan for an undergraduate is $16,000. Forgive me, for somebody who paid off something around 12x that, if I do not find the cost of a decent used Camry on the back of a 25 year old to be a "national crisis."

You mean the study paid for by Sally Mae? Next.

Oh by the way, the average debt of a college grad in 2018 was close to 30k if I recall.

 

[cyclone101]

So, simple question: how many kids have jumped into expenses they really can't afford?

Answer: Too many

I'm less than 5 years out of college. Care to see all the exotic places, expensive food/drinks, etc. I see on a weekly basis on social media? I'm doing okay financially but there's no way I could afford the frequency of the extravagances they are taking part in. I'm completely supportive of experiencing things before you get married and have kids and get busy with life. But there's no way some of my friends' lifestyles are penciling out right now if they also intend to retire comfortably by age 65. I don't know how much they make but it's definitely not enough to eat at white table cloth places multiple times a month, hit the bars every weekend, go to some white sandy beach place, tour Europe for two weeks, and visit your friend on the west coast three times a year. Their new Nissan sure looks sharp too. Sorry, but I can't feel bad for you if you're up to your ears in debt if that's the lifestyle you a choosing.

Look at the size of houses today in the newer neighborhoods. Now compare them to the new neighborhoods of 1985. It's night and day. And some people are flabbergasted at why houses are so expensive? Well duh, twice as much house is considered "normal" now when in reality it's borderline insanity at the income level of some people.

 

[Peter]

On top of that, I guarantee I have paid off more in student loans than anybody else in this thread. I paid off my wife's nearly $200,000 student loan bill right before we got married, using only my earnings from my software sales job. I have been on both sides of this -- making it through as cheaply as possible AND facing down the most mountainous student loan bill one can basically imagine at this point. And I survived and did fine nonetheless.

Ummmm are you hiring?