Millennials What is more important? Saving for short-term or long-term? | Hacker News Reader

Millennials What is more important? Saving for short-term or long-term?

7 pointstheodenanyoh20 comments

I'm trying to understand if millennials value short-term savings to long-term and why?

Asking this question on HN is probably not the most effective way to understand what "millennials" value, but I'll offer my anecdote.

My #1 priority is to have $10k in emergency savings. I guess that's my version of short-term savings.

Once I've hit $10k in liquid savings, I try to max out 401k and Roth IRA contributions. I am working towards having enough for a good down payment on a house by the time I am 30-32 (~10 years from now).

Out of curiosity, why would you max out your retirement contributions if you are trying to save for a good down payment on a house?

some of those let you pull out tax advantaged for your first house.

True some will though I believe only $10,000 without taking the tax penalty. Definitely worth talking to a cpa before making any decisions.

As far as I'm aware, you can pull your contributions out of a Roth IRA without penalty - they are post-tax dollars when they go in, until a regular IRA or 401k. Earnings and returns are different.

Most do not. Financial illiteracy is rampant; most do not understand how to use credit intelligently, or to figure out how much interest rates cost them if they do use credit. Consequently far too many people either avoid using credit entirely, or treat it like monopoly money and content themselves with paying minimum payments.

Besides, an alarming percentage are still working shit jobs for no money, and paying everything extra towards college loan bills for degrees in useless things that do not make them employable, or worse, that they did not complete.

The idea of socking away enough money for a down payment on a house is, depending on where you are, a daunting to Herculean task. When the dating pool is filled with other people in a similarly fucked and precarious position as yourself, incentives are not great to pair up and expose yourself to a partner's poor financial decisions, further depressing the drivers to home ownership.

So a lot of people just float around hedonistically, and maybe start to wake up and become an adult around when they hit thirty. Or not.

Definitely short-term right now. If I made a SDE's salary instead of a SDET's salary and didn't live in a high COL area and didn't have to support a parent, I'd be more inclined to value long-term savings. Objectively, planning for the long term is better than planning for the short term, and I'd like to actually make enough money to plan for it, but I gotta make do with what I got for now. I do have a 401k via my job, and my credit is good, but nothing else.

I prefer long term; I've my pension and house sorted at 30, and will be able to retire early.

But I live pretty cheaply, and earn a decent income. When I'm saving for something short term (a holiday, new tech, etc) I usually just pick up a couple hours extra work, or don't over-pay into my savings/mortgage that month. I think if that wasn't the case saving for the shorter term, more experience-based things would be the priority in actually enjoying life.

Currently short-term-ish?

I have achieved more than half-a-year of income in my short-term savings, but I feel unsure if I should start long-term i.e. pension-fund-style savings. As I will be 30 next year, I probably should. I probably should start saving for my daughter's college.

If you have to save, I'd probably advise against doing it through long-only pensions. In 2008 when everything was wiped out, a lot of retirees had to settle for next to nothing.

I'd strongly recommend watching this video: https://www.youtube.com/watch?v=eBVx0Fw1VXo

It totally flipped my savings approach.

I saved a lump of money for the short-term and took a very long vacation. I have a bit saved for the long-term from before, but now the focus is long-term saving.

Millennials don't have enough money saved to apportion what they're saving. As of 2017, 46% had 0 money saved. Another 36% had <$5k saved.

I don't think there's anything long-term about a 4-figure bank balance.

I think it doesn't have much to do with the generation. You'll find rich people saving long-term and poor people saving for the short-term(or not at all).

What does saving for short-term mean? Spending quickly?

Saving for short-term goals like a deposit on a home, purchasing a car or other big ticket items, starting a family, taking a vacation.

I'm lucky enough to have thought about my retirement planning first, before I had most other expenses. So I set up a standard boring Roth 401(k) and have been contributing to it with only one break, when I had some expensive car trouble. My wife and I managed to pay off my school loans and our car loans, but we still have a lot of credit card debt and it's going to be tough for us to get a house, which we both really want to do.

I'd say I'm extremely lucky to have a job where I can fund my retirement account and also pay rent and pay off loans etc. But if you're asking about priorities, long-term saving has always appealed to me more.

Thank you. I really appreciate your input.

Living, not saving.

I do like the governement do worldwide: spend money today, not caring about saving or repaying

If that were true, government bonds would be worthless.

Compared to crypto, recently they have been.

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