How Gen Z became so nihilistic about money
bbc.com
bbc.com
Maybe that's the idea.
You're saying this as if the price of housing is decided by some guy/group of guys.
Edit: also this https://www.ftc.gov/business-guidance/blog/2024/03/price-fix...
I see this belief in a lot of younger co-workers. Newsflash: You're highly likely to outlive your ability to work. If your plan is to die the day after you retire, that may happen, but in all likelihood you won't, and not having savings is going to end up unpleasantly for you. Save for retirement, people!
But the hidden assumption, that these metrics would be coupled with second-order metrics like life expectancy, home ownership, health, and well-being? That no longer holds.
These consequences today are all the results of political decisions made decades ago. The unfortunate reality is that turning this ship around will also take decades.
my retirement plan is an overdose.
Everyone seems in such a rush to stop earning money. Maybe be in a rush to get a "rest and vest" job instead? I plan to be some senior director at the 2050 equivalent of a sleepy and comfy giant company like IBM or Salesforce. By the time they realize I've stopped delivering value half a decade ago and lay me off, I'm already old enough to get the maximum possible monthly social security benefits AND will have prolonged my tech wealth earnings, likely with a house which is hopefully paid off. And I haven't even mentioned the golden parachute of long term severance packages!
I get it if you're doing back breaking work, but this is HN! Most of the folks here have nothing more to worry about except eye strain/blindness, deafness, and carpel tunnel.
I haven't worked many places, but I have a feeling that working for a company that has tech but doesn't identify as a tech company is probably the way to go. Also stay the hell away from the Bay Area.
Tech company culture seems so dysfunctional (e.g. the normalized age discrimination, etc.).
The article names many reasons why it isn’t so simple. None of those reasons are that Gen Z decided against saving money.
I do agree that opening with a quote about other larger issues may not have been helpful. It’s not like other generations didn’t have to worry about e.g. nuclear war. It’s really not the point though.
The reason people don’t trust institutions is because the institutions aren’t working for them.
>"I'm a Gen X-er," says Beal. "We lived to work. Generation Z works to live. They work to enjoy life, to experience life, to travel. They have a completely different mindset
Which is more a point about the current culture than about the state of economy.
> including falling wages and a challenging real estate market in which rent increases outpace earnings.
> Around the globe, the eldest Gen Z-ers are heading into their late-20s amid undeniable economic headwinds.
> Financial wellness company Brightplan's 2024 Wellness Barometer Survey of 1,400 US-based knowledge workers at global companies found that a majority, regardless of age, report feeling stressed about their financial situation, citing high inflation, rising interest rates and market volatility as complicating factors.
Are we reading the same article?
Literally read a sentence beyond what I quoted.
>"I'm just living life, but that's how everyone is," she tells me over the phone, noting that most of her friends are enjoying their early 20s without too much regard for the future.
How hard is it to engage in a point rather than trying to prove that I somehow didn't read the article?
I'll sleep on a couch and call it a day. That's the best retirement anyone can ask for.
I still set aside 10% for retirement though. Maybe I'll get lucky but even I doubt it'll amount to anything.
>That's partly why Brama now splits her time between the United States and Europe
I wish I was broke enough to split time between two continents.
But even setting that aside, the article goes on to mention Albania (low CoL) and access to healthcare. The latter, in particular, checks out. I have great insurance, but my out-of-pocket max equals somewhere between 5 and 10 round-trips to Europe. It's not hard to imagine there exist people who can setup the circumstances such that working in the USA part of the year and living somewhere else part of the year is massively more economical than staying in the USA.
Actually, doesn't that exact situation describe a huge fraction of the US agricultural labor force?
I see this less as how inexpensive things are elsewhere and more how excessively expensive they are in the US. In the Bay Area for example the housing stock is incredibly expensive but relatively low quality even compared with other US cities.
Literally true.
Piketty, T. (2014). Capital in the twenty-first century. Harvard University Press.
And also, it's a pretty stupid way to handle wealth.
Lietaer, B., & Dunne, J. (2013). Rethinking money: How new currencies turn scarcity into prosperity. Berrett-Koehler Publishers.
The actual reality is that every generation has complained about crippling prices when they're in their 20s, especially property, only to find that as they get older their salaries eventually rise and then they start earning over the median salary, they find they're actually in a good place.
Personally, I couldn't afford to get on the property ladder until I was 28, and I've always been a big saver. Just before I actually bought my house, there was a massive property price boom in the UK - 18 months earlier I'd looked at a house on the same road as the house I eventually bought, with a loft conversion (extra room) and in better condition. The house I bought 18 months after viewing this one (and deciding I couldn't really afford it) was 50% more, and my salary was exactly the same 18 months later. In fact, I could only afford it because the bank was running an offer on its graduate accounts that allowed a 4x mortgage instead of the standard 3x. In that brief moment of eligibility for that mortgage, I went for it, despite knowing that it'd be even more financially burdensome than the much cheaper house I'd decided against on financial grounds.
As it turned out, I ended up buying at the peak of the market, and the value of the house remained stagnant for 10 years. Along the way, I had other setbacks, like getting a 5 year fixed rate mortgage for 5.5% three months before the Bank of England dropped rates down to 0.25%, but the exit penalties were so high I had no choice but to suck it up.
But the thing is, even though the value of the house didn't change for 10 years, my salary did. What seemed impossible right up to the point of stretching myself to the limit and committing to the mortgage, a few years later was tolerable (although I didn't change my spending habits, instead I overpaid my mortgage as much as I could because of the high interest rate and terrible savings rates), and after 10 years, everything was very comfortable because I'd had 10 years of inflation in my income, but my minimum mortgage payments were still roughly the same. Finally, after overpaying like crazy, I paid off my mortgage after 18 years into the 25 year term. Now it's all paid off, my life is definitely on easy mode, but I do feel somewhat aggrieved when a gen-Z'er says "oh, you're just the generation that had money", because I sure as hell didn't have any money at the start of my working life - it took ploughing everything I had into savings, and then into the mortgage for the house to make that happen.
So, what can a gen-Z'er take away from this? They could just say "yeah, it's too hard" and just give up. Sadly, I think a lot of them do think that way. Or they could think, "life is hard, I need to save hard". Sooner or later, the opportunity will come - house prices are cyclical, sometimes they go up in value at insane rates, other times they stay about the same for years. But to take the advantage of the opportunity when your salary is relatively high and the house prices are relatively low, you need to have made some savings in the meantime. If you give up too soon, you're guaranteed to hit the failure state. If you persevere saving, even a little, sooner or later, there will be an opportunity for you to seize.
I know for some people, it's going to be impossible - if you are genuinely living pay cheque to pay cheque, it's tough. The smallest thing can completely ruin you. That's why it's even more important to save what little you can, whenever you can. That £5 coffee, even as a once-a-week weekly treat, is £250 a year of missed savings opportunity. That £10 netflix subscription, £500 per year. That £50 on alcohol going out on a Friday night, £2500. I know these latter comments will sound ridiculous to people who are genuinely spending everything they earn just to get by, and I'm sorry if this sounds flippant, but equally there are gen-Z'ers complaining they will never afford a house who can afford to pay abroad for a "holiday experience" because they're "living in the now" or some nonsense. Those people could easily save up the deposit they need for a house if it was genuinely a priority for them. Maybe it'd take 5 years until the market conditions work in their favour, but the point is not to give up because you think life is unfair. It's been just as unfair to almost everyone in the past too. You need to just get on with it and press on through.
As an example of what it is to live a frugal lifestyle, I currently spend about £700 per month on council tax, utility bills, food and entertainment. In the last 2 years, I've spent about £4000 on travel and holidays. If I hadn't already paid off my mortgage, I could rent somewhere for about £700 per month. That comes in at about £1600 per month, so my equivalent income to sustain this lifestyle is £21000 per year. That's far below the median UK salary, but it's easily achievable because I choose not to go out drinking very often (around once a month, £15-£20 for the evening), I don't have lots of TV subscriptions, I just have a single subscription to a video-on-demand service that's £35 per year. I have the money to spend much more if I wanted, but my priority is still saving - only now it's for retirement.
That is surprisingly low. Here in the US it is over $1300/£1000. Rent has increased 20% since 2020 due to collusion among landlords, among other things.
Rent/housing is such a big part of monthly expenses that it doesn’t even matter whether you have subscriptions or not. Savings from cancelling your Netflix will quickly be eaten up by any small increase in rent. These are changes caused by large-scale political decisions, not personal moral failings of vast numbers of consumers.
I actually just checked spareroom.co.uk and you can get a double in a shared house for a bit under £500 in my area. I only found one flat for rent (smaller than my house, but closer to the city) and that was £750. Prices in London are a lot higher. A few years ago, a double room outside central London was at least £700, and at least £1200 for inside Zone 1.
> Savings from cancelling your Netflix will quickly be eaten up by any small increase in rent. These are changes caused by large-scale political decisions, not personal moral failings of vast numbers of consumers.
To be clear, I'm not saying having a Netflix subscription is a personal moral failing. I'm just saying, not having it is an easy way to save £120 a year. Most people actually have a lot of discretionary spending, all of which seem small on their own, but when considered as a whole become a large chunk of expenditure.
> Rent has increased ... due to collusion among landlords, among other things.
> ... is such a big part of monthly expenses that it doesn’t even matter whether you have subscriptions or not. ... These are changes caused by large-scale political decisions, not personal moral failings of vast numbers of consumers.
To me, both these statements are indicative of passivity and lack of agency about the situation that exemplifies the Gen Z mindset towards money. The first attempts to blame someone or something else for the high rents, which doesn't achieve anything apart from increasing the feeling that life is unfair. This mindset doesn't allow a way to break out, because it relinquishes agency over the situation to someone else.
The second has so much to unpack - it's pointless even trying to spend less; it's the government's fault; lots of others are in the same boat; trying to help someone to save is pointing out their personal moral failings. But none of these things are actually true.
It's not a personal moral failing to be short of money. Arguably, there'd be a case to be made if someone was gambling thousands of dollars away every month while their kids starved. If you're just working a job, struggling to make ends meet and having to live pay cheque to pay cheque, that's not a moral failing, that's making the best of a bad situation. People in that situation usually have already cut out all unnecessary spending, because they've often had to make the choice between things they actually need and had to do without something they actually need. There are still ways out in that situation, and sadly the easiest to say and the hardest to actually do is just to leave the situation, move somewhere cheaper to live and try to start again.
That isn't what the article is about though, it's about how Gen Z is nihilistic towards money. How does someone who does have a decent income, but chooses to spend it on a fun lifestyle, on experiences, etc. respond to the statement "if you make your life a little less pleasant now by giving up X, then you can save that money and make your future life better"? I can totally understand why people don't want to give up X - they obviously want to keep life with its current level of pleasantness, so then it comes down to priorities - what is really more important to an individual? For example, a cup of coffee every day for a year, or no cup of coffee each day and having a a month's rent in savings at the end of the year so e.g. a random car breakdown doesn't stop you paying rent? Maybe after a month of skipping the coffee and seeing that it wasn't that hard after all and seeing the difference in the bank, they might then consider not having lunch out every day, instead taking in sandwiches 4 days a week. Maybe they might consider whether they really need Amazon Prime instead of just waiting 3 days and using the free shipping. But I think most of them won't, and that's the point of the article. Most Gen-Z'ers don't prioritise the savings and the future reward, because they want the short term experiences and happiness. More than that, their peers all agree that it's not their fault, they're powerless to do anything about the situation, they could never hope to ever save up the deposit for a house, and so they might as well not even try. It's this mindset that's depriving them of their own agency, not the government, not previous generations, not anyone else.
It used to be possible in America to buy a house and raise a family with free education. This is no longer possible. It was a choice to only zone for single family housing. It was a choice to cut state funding for universities which has led to unsustainable tuition bloat. It was a choice to allow companies to ship jobs overseas for pennies on the dollar. All of these choices reallocated money from younger, poorer people to wealthier, older people.
These statements are the very essence of the nihilism in the article.
It doesn't matter if a situation is less advantageous to you than it was to someone 10, 20, or 50 years ago, or why the situation has changed. What matters is how you can best deal with the situation you find yourself in now.
Giving up, saying it's too hard so there's no point trying, blaming someone else all have the same outcome - nothing will change.
To use a card analogy: maybe you haven't been dealt the best cards in life, but if you fold every hand, you're never going to win. But if everyone else has terrible cards too, you can easily win with a bad hand if you play to your strengths.
Your card analogy hides the fact that your cards weren’t dealt randomly. Opportunity isn’t evenly distributed. The cards were deliberately chosen. Politicians chose winners and losers when they rewrote the tax code to reward capital over labor, make it easier to ship your job overseas, cut funding for education, and now allow companies to buy up a quarter of new housing. And the only way those trends get reversed is if people become more aware of it, not less.