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Comment by wcummings | Hacker News Reader

>In the Reagan era, this age group spent 91 percent of their income. Today's millennials spend only 81 percent of their income.

What the what?!

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I guess it means they are saving a greater percentage of their income. Is that so surprising?

Not clear if it includes compulsory retirement savings though. In Australia you get 9% of your salary paid into a retirement savings account. If the "income" figure includes things like that then that might explain the higher apparent savings rate.

I think both numbers are really high.

Really? I'm a millennial on about average wage and I save about 35 percent of my income. I consider myself quite frugal. My biggest expense is rent, which is about 25 % of my after-tax income. It seems pretty hard to do much better. I could provide a breakdown of my finances, which I track fastidiously. I cook all my own food and bring lunch to work every day. My weekly grocery bill is $70 USD. Those savings rates seem normal to me.

I have the added expense of flights every now and again since I'm working in the US but my girlfriend and family are in Australia. It's a temporary arrangement. But without that my savings rate would only be a little bit higher. Maybe 45% instead of 35%.

>My biggest expense is rent, which is about 25 % of my after-tax income.

Yeah, you're not on average wage. HN is awfully biased, and I'm certain almost none of us here have actually lived on minimum to average wage for a long time.

Include comment about personal experience under this post.

Well, it is technically possible he is at the national average income (not the median wage) and lives in a place where rent is way more affordable than the cities most of HN lives in. U.S. GDP per capita is $55,836.79. That is $44,558 after taxes in Knoxville, TN (I am picking a city, but it could be more extreme, he could work remotely from a rural area in the U.S. or from, say, Belize). This means 25% towards rent is $1163. So, in Knoxville, Zillow says that is a 3 bedroom home.

More realistically, that same amount is a small studio in e.g. Austin, TX.

Now, the trick is that the average income might be $55,836.79, but the median personal income is ~$41,520 [1]

[1] https://en.wikipedia.org/wiki/Personal_income_in_the_United_...

Seems accurate to me. Local average individual income where I live is about $48,000 or $41,000 after-tax. 25% of that leaves you ~$850/month for rent. I see all kinds of listings at $575/month not including utilities. Assuming the parent is including utilities, $275/month for those should be sufficient.

I know that would not be possible in all markets, but it would take the same HN bias you mentioned to think that everyone lives in SF or NYC.

I'm on 55k USD per year pre-tax which is about average (mean) wage I believe.

I am not renting my own place, I'm in a share house. My rent is US$900 per month (including utilities).

A more accurate calculation shows that this is about 27% to 28 % of my after tax income.

This isn't just discretionary spending, it's total outflow of money earned (presumably after tax). They mentioned costs of housing, insurance and student debt repayments in the article as growth factors.

Thats what I thought, still seems insanely high to me, but I also dont have any student debt or a car.

You know the median millenial salary is like 28,000, right?

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