Why millennials don’t save money

Duncan Black, a blogger in Philadelphia, explains:

How do you expect people to start their careers with a hundred thousand dollars in debt, and then save for a down payment, and then save for retirement?  This is un-possible even with high paying jobs, which most people don’t have.

It’s true that the magic of compound interest works really well if you start saving at age 21 and continue until retirement, but it’s also true that it’s stupid to save if investment returns are lower than the interest rates on the absurd amount of debt that you were supposed to rack up to enter civilized life.

Really no one should go into this much debt to go to college, but The Kids Today don’t even have the option of cheap public universities like The Kids In My Day did.

via Eschaton.

This is also the reason why the Millennial generation doesn’t spend money in the consumer economy the way previous generations did.

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3 Responses to “Why millennials don’t save money”

  1. williambearcat Says:

    Like almost everyone else of my generation, my part-time work at Burkies Drive Inn at $1.00 an hour made it possible to pay tuition, have a car (provided by dad) pay for gas in a car provided by dad and still live in fraternity house the last two years. Tuition, if I remember correctly, was $90 a year.

    Like

  2. Michael Says:

    Taking it a step further, what are the implications of having an entire generation characterized by less consumer spending?

    Like

    • philebersole Says:

      The implication, as I see it, is that we need a economic system that doesn’t require people to continually keep buying more stuff, whether or not they need it and whether or not it makes them happy.

      Like

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