Should You Save or Spend?
Discussion
DonkeyApple said:
Correct. And how much of the stuff in the CPI do you need to buy? What’s essential?
The point is that one of the largest monthly costs for the average Briton whonis a home owner has fallen dramatically in the last decade. An awful lot of other things have to go up an awful lot for your actual cost of living to have risen. Inflation, within reason is quite a personal number.
I don’t really buy much, when I do, I usually buy used. Old cars, old furniture etc. I work quite hard to not pay VAT. As a household, the majority of things that we buy will hold their value. We don’t own many of the goods that comprise either the RPI or the CPI, certainly no new. Neither are really indicative of my household.
The fact is that an awful lot of people have gotten into the habit of buying things they just don’t need with money they haven’t earned yet and also a lot of excess tax but then claim they don’t earn enough to save anything for the time when they can’t earn income from work. In reality they do earn more than enough to save more than enough for the future but they are making the personal choice not to do so. Which is fine but they don’t have the right to complain that they haven’t enough money afterwards.
L
It makes me laugh sometimes that it takes things like computer games into account. Food and utilities and petrol and housing are useful things to measure. Computer games are hardly a staple need, and are completely irrelevant to very many peopleThe point is that one of the largest monthly costs for the average Briton whonis a home owner has fallen dramatically in the last decade. An awful lot of other things have to go up an awful lot for your actual cost of living to have risen. Inflation, within reason is quite a personal number.
I don’t really buy much, when I do, I usually buy used. Old cars, old furniture etc. I work quite hard to not pay VAT. As a household, the majority of things that we buy will hold their value. We don’t own many of the goods that comprise either the RPI or the CPI, certainly no new. Neither are really indicative of my household.
The fact is that an awful lot of people have gotten into the habit of buying things they just don’t need with money they haven’t earned yet and also a lot of excess tax but then claim they don’t earn enough to save anything for the time when they can’t earn income from work. In reality they do earn more than enough to save more than enough for the future but they are making the personal choice not to do so. Which is fine but they don’t have the right to complain that they haven’t enough money afterwards.
L
joyless lobotomised parrot said:
There are also complicated issues of defamation which can reach to people spreading or encouraging the spread of defamatory articles. Got a feeling you don't have the cojones for that. 
Priceless.https://www.dailymotion.com/video/xco10
Jimmy Recard said:
It makes me laugh sometimes that it takes things like computer games into account. Food and utilities and petrol and housing are useful things to measure. Computer games are hardly a staple need, and are completely irrelevant to very many people
It could be left handed screwdrivers if it meant the bucket of goods was supportive of whatever inflationary target was in mind.I don't think the original question should be "Should you save or spend". It should instead be: "Have you thought about saving?".
I think that alternative better captures the reality of the topic and invites us to present things in a less black and white debate.
We know that most people don't save enough and - more importantly - can infer that this is not usually because people have taken close look at their habits (and the alternatives) before making a decision. I suspect that most advocates here, be they spenders or savers, respect a view that it based on having sat down and gone through things with a pencil and pad. But to not look at one's finances, habits and plans is a less easy position to defend.
I'm actually an example of having not thought things through... albeit as a saver rather than a spender. I started saving via ISAs into equity funds for no particular reason than the encouragement of my father-in-law, in the mid-2000s. Although I tracked these on a regular basis, I had no inclination of what I was saving for. For reference, I've saved about 25% of my post-tax income for 11 years now - on top of contributing 13.5% into a pension scheme and building-up equity in our soon-to-be-mortgage-free house.
I came across Mr Money Moustache as a result of a tip in this very forum (the only part of Pistonheads I habitually read now!!) about 18 months ago. I devoured those blog posts and upgraded my Excel spreadsheets to accommodate a new early retirement plan as a result.
I have a wife and 2 kids and used to think I'd work until 60+; but with some wind in my sails from my earlier saving habit and a decision to spend less on cars, I came to see how I could actually take a step back in my mid-to-late 40s.
However, last year was a bad one for family and friends' health. As a result, I'm a little more ambivalent about the thoughts and plans I drew up. In fact, since having a minor ill-health moment myself a few months ago, I've slackened off my general tightwad tendencies (e.g. I've replaced 3 of my 4 bikes in the last 6 months - after peering into the abyss of life without being able to cycle! - and bought a Cooper S to replace a Cooper). It made me see that there are certain things I will appreciate - like mountain biking - to a greater extent while I am younger rather than older.
This hasn't adversely affected my plan, but it does make me inclined to compromise it, if I felt like it was holding back on today's fun / experiences.
Going back to the original point, I do wish more people would have access to examples and opinions that promote saving - for them to at least think about their habits:
The Millionaire Next Door
I think that alternative better captures the reality of the topic and invites us to present things in a less black and white debate.
We know that most people don't save enough and - more importantly - can infer that this is not usually because people have taken close look at their habits (and the alternatives) before making a decision. I suspect that most advocates here, be they spenders or savers, respect a view that it based on having sat down and gone through things with a pencil and pad. But to not look at one's finances, habits and plans is a less easy position to defend.
I'm actually an example of having not thought things through... albeit as a saver rather than a spender. I started saving via ISAs into equity funds for no particular reason than the encouragement of my father-in-law, in the mid-2000s. Although I tracked these on a regular basis, I had no inclination of what I was saving for. For reference, I've saved about 25% of my post-tax income for 11 years now - on top of contributing 13.5% into a pension scheme and building-up equity in our soon-to-be-mortgage-free house.
I came across Mr Money Moustache as a result of a tip in this very forum (the only part of Pistonheads I habitually read now!!) about 18 months ago. I devoured those blog posts and upgraded my Excel spreadsheets to accommodate a new early retirement plan as a result.
I have a wife and 2 kids and used to think I'd work until 60+; but with some wind in my sails from my earlier saving habit and a decision to spend less on cars, I came to see how I could actually take a step back in my mid-to-late 40s. However, last year was a bad one for family and friends' health. As a result, I'm a little more ambivalent about the thoughts and plans I drew up. In fact, since having a minor ill-health moment myself a few months ago, I've slackened off my general tightwad tendencies (e.g. I've replaced 3 of my 4 bikes in the last 6 months - after peering into the abyss of life without being able to cycle! - and bought a Cooper S to replace a Cooper). It made me see that there are certain things I will appreciate - like mountain biking - to a greater extent while I am younger rather than older.
This hasn't adversely affected my plan, but it does make me inclined to compromise it, if I felt like it was holding back on today's fun / experiences.
Going back to the original point, I do wish more people would have access to examples and opinions that promote saving - for them to at least think about their habits:
The Millionaire Next Door
The Cardinal said:
I came across Mr Money Moustache as a result of a tip in this very forum (the only part of Pistonheads I habitually read now!!) about 18 months ago.
Yep, this section is my go to - then eventually I'll catch up on automotive news.Debates can get heated here, but well written contrasting viewpoints help balance things out.
Thanks for the ebook (link)!
joyless lobotomised parrot said:
If you're confident and capable of making a living at any time and to any age especially doing something you're good at alongside people you like there's a certain pointlessness to saving up for a rainy day that'll never come.
Or a zillion varieties of the same.......
Times are changing, snowflakes!
I will always be able to hold down a very good job, but if the music stops that could be on a tenth of what I am on now.Or a zillion varieties of the same.......
Times are changing, snowflakes!
I don’t know exactly how much extra pleasure would be got by spending fifty thousand on the summer holiday rather than five, or on spending a thousand pounds on a night out rather than a hundred, but I suspect it would be minimal or zero.
You may revel,in spending all you earn, but for many people (me included) it is far nicer to spend a reasonable amount and to put the rest away for later.
Turning fifty, losing the trading job and having to get by on an average wage would not be so much fun, and I would hate to think of the millions I spent in the decades before just because I could.
James_B said:
You may revel,in spending all you earn, but for many people (me included) it is far nicer to spend a reasonable amount and to put the rest away for later.
The thing is James, JLP does exactly the opposite of spending all he earns. Hence why he has managed to accumulate a rather nice property portfolio. Which is great for him and his family, no question. And it goes to show the benefits of not following his spending advice on this thread EddieSteadyGo said:
James_B said:
You may revel,in spending all you earn, but for many people (me included) it is far nicer to spend a reasonable amount and to put the rest away for later.
The thing is James, JLP does exactly the opposite of spending all he earns. Hence why he has managed to accumulate a rather nice property portfolio. Which is great for him and his family, no question. And it goes to show the benefits of not following his spending advice on this thread But hang on a sec. Isn't all this property accumulation the product of over-leveraging? Y'know. Buying property with 100% financing until the banks spanked me and recalled those loans? Or is that just the mad fantasy of a braying Donkey? Another load of pish
There's something not right here. I mean, if the over leveraged portfolio was collapsed by the recall of the leveraging, how the f did the 'rather nice property portfolio' accumulate?
Very confusing. Hmmmm.
Anyway, I like that "saver" idea. I'll go with that. In the old days we used to call it 'ploughback' - the concept of returning profit back to the business to expand it. But I'll go with "savings"! See Da! It turns out your dropout spendthrift son is a canny saver after all!!
Edited by joyless lobotomised parrot on Friday 22 June 01:19
Why would you return the profits to the business though? Based on your words you should spend it now rather than hoping for better returns in the long term in your business. After all, putting your money in stocks etc is exactly that, just with less leverage.
In terms of banks recalling their loans - I'd guess the banks gave you enough time to sell some of the houses to pay back enough/the remaining loans. And since you were so leveraged before/ had a lot of gains then you still had a lot of extra cash left over. Which you continued to put into houses but reduced loan %. The banks are unlikely to call you in immediately.
In terms of banks recalling their loans - I'd guess the banks gave you enough time to sell some of the houses to pay back enough/the remaining loans. And since you were so leveraged before/ had a lot of gains then you still had a lot of extra cash left over. Which you continued to put into houses but reduced loan %. The banks are unlikely to call you in immediately.
Camelot1971 said:
I appreciate your thoughts.
I'm not sure that they received much joy from having that money though. They were more worried about the "just in case" for them (which is fine) rather than saving every penny to hand to their children. My mum was always telling them to spend it on themselves - live a little, travel, do things! Live is about experiences as much as tangible objects.
I agree, in the end, there is no downside of leaving money, as such. But there is a downside for the person leaving it if they get to later in life and wished they had done things they now can't do.
I don't agree with live fast, die young. I do agree with live your life to the full. You only get one.
Absolutely. It’s about finding the right compromise. Living like Scrooge is one end of the extremity while living like the latest disco diva on the scene is at the other. As always it is about being in balance between what is sensible, viable and what you want. Or looking at it another way, recognising that you need to consider the future when you make choices in the present. I'm not sure that they received much joy from having that money though. They were more worried about the "just in case" for them (which is fine) rather than saving every penny to hand to their children. My mum was always telling them to spend it on themselves - live a little, travel, do things! Live is about experiences as much as tangible objects.
I agree, in the end, there is no downside of leaving money, as such. But there is a downside for the person leaving it if they get to later in life and wished they had done things they now can't do.
I don't agree with live fast, die young. I do agree with live your life to the full. You only get one.
If you talk to a lot of elderly people you soon realise that there is a fear that grows as you get older, as the frailty begins to bite and that holding on to money seems to be the alleviation. Money helps protect you from the State as well as helping you retain the concept of being the family patriarch or matriarch. In more insidious cases it is used to manipulate and control.
But anyone who has seen inside care homes soon gets a wake up call as to the abject dangers of the disco diva lifestyle and the price that is paid later. There is no surprise that there is a higher than average suicide rate among young men who live this lifestyle and I suspect that as the Millenial generation age we may see a weird rise in such sad events as more men see it as the solution to not being able to maintain a desired lifestyle.
The important thing to appreciate is that if you have the money to do all the things you want to do then you also have the money to save and invest in making sure you don’t end up having to do all the things you don’t want to do. But this is why we tend to fall into two groups, the natural savers and the natural spenders. The spenders will always end up dependent on others ( whether that is the State, charity, family, friends or a husband) but it’s not in their nature to consider their future. What spenders all have in common is a total denial that the merry go round can ever stop. Deep down they know which is why they come up with so many catch phrases and excuses and apply them so liberally but they can’t stop and don’t want to stop.
You don’t really see savers rolling at catch phrases to justify their actions but on the other foot there is always the ‘richest in the graveyard’, ‘you only live once’ etc. And there is a very good reason for catchphrases appearing and it’s all to do with people knowing what lies ahead but selling themselves their own snake oil and seeking affirmation from others like them that it’s all ok.
The fact that modern society is swamped with these catch phrases certainly tell us that there is a huge imbalance in society today which sees many people taking the money that should be invested for their future and spending it on cars, food, media and lots of things that there is no true need or benefit from in the long run. I’m not sure that in 50 years all the people eating dog food and dancing in the shopping centre for coins will find much solace from a memory of buying a TV they never really needed but said it was half price and also said it was zero finance and the lady on TV said it would be great for the impending football tournament.
Like anything you can only save those on the periphery of either extreme. You can save those at the extremities.
But when it comes to finding the logical balance it’s worth asking whether you’d prefer to fall slightly more on the side of your grandparents or more on the side of the local tramp that like all spenders is reliant on alms from others but has run out of anything society wishes to trade for in exchange other than pity.
joyless lobotomised parrot said:
But hang on a sec. Isn't all this property accumulation the product of over-leveraging? Y'know. Buying property with 100% financing until the banks spanked me and recalled those loans? Or is that just the mad fantasy of a braying Donkey? Another load of pish
There's something not right here. I mean, if the over leveraged portfolio was collapsed by the recall of the leveraging, how the f did the 'rather nice property portfolio' accumulate?
Very confusing. Hmmmm.
Anyway, I like that "saver" idea. I'll go with that. In the old days we used to call it 'ploughback' - the concept of returning profit back to the business to expand it. But I'll go with "savings"! See Da! It turns out your dropout spendthrift son is a canny saver after all!!
Edited by joyless lobotomised parrot on Friday 22 June 01:19
You may have an issue with ‘wide boys’ in the City and frankly, who doesn’t. You’ve found your way of avoiding them by avoiding all wrappers and structured products but that doesn’t mean they are wrong.
What is also at odds is that you preach from a position of denial that you are a classic saver and you’ve recognised for years that you needed to create a portfolio that generated the income in later life to allow you to do what you want to do with your retirement. Constantly arguing against people who suggest doing exactly what you have done and what you very much believe in is what is strange about your posts.
What you need to do is disconnect your hatred of certain people from the reality of these discussions. The irony being that you and I completely belive in the exact same things when it comes to investing for one’s future.
DonkeyApple said:
That’s just it. You are a ‘saver’. You’ve invested money that you’ve earned into creating an income for you’re retirement. That is essentially your pension.
You may have an issue with ‘wide boys’ in the City and frankly, who doesn’t. You’ve found your way of avoiding them by avoiding all wrappers and structured products but that doesn’t mean they are wrong.
What is also at odds is that you preach from a position of denial that you are a classic saver and you’ve recognised for years that you needed to create a portfolio that generated the income in later life to allow you to do what you want to do with your retirement. Constantly arguing against people who suggest doing exactly what you have done and what you very much believe in is what is strange about your posts.
What you need to do is disconnect your hatred of certain people from the reality of these discussions. The irony being that you and I completely belive in the exact same things when it comes to investing for one’s future.
You may have an issue with ‘wide boys’ in the City and frankly, who doesn’t. You’ve found your way of avoiding them by avoiding all wrappers and structured products but that doesn’t mean they are wrong.
What is also at odds is that you preach from a position of denial that you are a classic saver and you’ve recognised for years that you needed to create a portfolio that generated the income in later life to allow you to do what you want to do with your retirement. Constantly arguing against people who suggest doing exactly what you have done and what you very much believe in is what is strange about your posts.
What you need to do is disconnect your hatred of certain people from the reality of these discussions. The irony being that you and I completely belive in the exact same things when it comes to investing for one’s future.
DonkeyApple said:
...
The fact that modern society is swamped with these catch phrases certainly tell us that there is a huge imbalance in society today which sees many people taking the money that should be invested for their future and spending it on cars, food, media and lots of things that there is no true need or benefit from in the long run. I’m not sure that in 50 years all the people eating dog food and dancing in the shopping centre for coins will find much solace from a memory of buying a TV they never really needed but said it was half price and also said it was zero finance and the lady on TV said it would be great for the impending football tournament.
....
Thing is DonkeyApple... who or what is to blame for this unnecessary spending attitude with most millennial's?The fact that modern society is swamped with these catch phrases certainly tell us that there is a huge imbalance in society today which sees many people taking the money that should be invested for their future and spending it on cars, food, media and lots of things that there is no true need or benefit from in the long run. I’m not sure that in 50 years all the people eating dog food and dancing in the shopping centre for coins will find much solace from a memory of buying a TV they never really needed but said it was half price and also said it was zero finance and the lady on TV said it would be great for the impending football tournament.
....
Is it society/media... or poor financial acumen inherited from parents?
A few posts back you talked about the blue/white collar mix. I'm not sure I entirely understood it. So, blue collar parents can have offsprings today that are
much more likely to attain white collar job positions, and thus have a different approach to spending money?
I sometimes log onto the DailyMail (trash journalism I know) and I'm often amused at all the side articles glorifying young C-list celeb lifestyles, from their clothes, cars, private jets. I do wonder if this sets unrealistic expectations for the younger generation... eg. "If you don't have the latest Range Rover on your drive you ain't living mate! Get one now!"
To clarify my point further, for the last decade our TV has been dominated by craptastic reality shows, x-factor and love island to name a few. These shows put lots of significance on image to achieve success. Image is everything to this generation.
Then there is a whole other argument regarding cheap credit.
I'm trying to track how we've got here vs previous generations.
JaredVannett said:
Thing is DonkeyApple... who or what is to blame for this unnecessary spending attitude with most millennial's?
Is it society/media... or poor financial acumen inherited from parents?
A few posts back you talked about the blue/white collar mix. I'm not sure I entirely understood it. So, blue collar parents can have offsprings today that are
much more likely to attain white collar job positions, and thus have a different approach to spending money?
I sometimes log onto the DailyMail (trash journalism I know) and I'm often amused at all the side articles glorifying young C-list celeb lifestyles, from their clothes, cars, private jets. I do wonder if this sets unrealistic expectations for the younger generation... eg. "If you don't have the latest Range Rover on your drive you ain't living mate! Get one now!"
To clarify my point further, for the last decade our TV has been dominated by craptastic reality shows, x-factor and love island to name a few. These shows put lots of significance on image to achieve success. Image is everything to this generation.
Then there is a whole other argument regarding cheap credit.
I'm trying to track how we've got here vs previous generations.
My own personal view is its a mix of factors. Is it society/media... or poor financial acumen inherited from parents?
A few posts back you talked about the blue/white collar mix. I'm not sure I entirely understood it. So, blue collar parents can have offsprings today that are
much more likely to attain white collar job positions, and thus have a different approach to spending money?
I sometimes log onto the DailyMail (trash journalism I know) and I'm often amused at all the side articles glorifying young C-list celeb lifestyles, from their clothes, cars, private jets. I do wonder if this sets unrealistic expectations for the younger generation... eg. "If you don't have the latest Range Rover on your drive you ain't living mate! Get one now!"
To clarify my point further, for the last decade our TV has been dominated by craptastic reality shows, x-factor and love island to name a few. These shows put lots of significance on image to achieve success. Image is everything to this generation.
Then there is a whole other argument regarding cheap credit.
I'm trying to track how we've got here vs previous generations.
Diluted attitude to saving from the parents (not extinguished entirely, but diluted to the extent "some" credit is no longer dirty).
Attitude of peers/C list celebs/everyone does it so why can't I
Exposure to spending habits of peers by way of social media. No longer is it just A-listers in the Mail in jets wearing Gucci (they were sufficiently removed from Joe Public before that you would know you couldn't emulate them). Now its every tom, dick and harry on Instagram drinking champagne.
Linked to the above, the try-hard attitude and globaility of social media. Bragging rights can now expand globally, even for the average Joe. Before you could only show off your bling to the local pub/club or wherever. Now you can hashtag yourself globally from your 1 room bedsit in Burnley.
The increase in house prices versus earnings multiples. The belief is now its out of reach so why bother. Perhaps the same can be said of pensions (although I believe these are just conveniently overlooked rather than a considered rejection).
The concept of delayed gratification among a society of spenders. Why would you "waste" the best years when you look around you (on instagram..) on all these smiling faces driving AMG's and partying like its 1999...
The acceptance of credit/rental. I heard a radio advert for a Fiat the other day whereby the cost of the car was never in fact mentioned - only the monthly cost. Intrigued me. The same applies with everything from TV/music streaming services through to phones. Some of it may be an advancement, some a set-back. I am not one to really judge what is in each category, but certainly the attitude of the 20 something is that most of life's "things" are paid for monthly and rented.
The fascinating thing to me is the division that is being created with regards to what is happening. In very basic terms, for each extra £ spent by those happy to agree to credit, the rich are getting richer and the poor getting poorer, as people pay their enhanced credit fee into the pockets of those lending them to buy their tat. As time goes by, that will only get greater and in a global economy you wonder where that will take us in a 100 years.
JaredVannett said:
Thing is DonkeyApple... who or what is to blame for this unnecessary spending attitude with most millennial's?
Is it society/media... or poor financial acumen inherited from parents?
A few posts back you talked about the blue/white collar mix. I'm not sure I entirely understood it. So, blue collar parents can have offsprings today that are
much more likely to attain white collar job positions, and thus have a different approach to spending money?
I sometimes log onto the DailyMail (trash journalism I know) and I'm often amused at all the side articles glorifying young C-list celeb lifestyles, from their clothes, cars, private jets. I do wonder if this sets unrealistic expectations for the younger generation... eg. "If you don't have the latest Range Rover on your drive you ain't living mate! Get one now!"
To clarify my point further, for the last decade our TV has been dominated by craptastic reality shows, x-factor and love island to name a few. These shows put lots of significance on image to achieve success. Image is everything to this generation.
Then there is a whole other argument regarding cheap credit.
I'm trying to track how we've got here vs previous generations.
I suspect that is a thread on its own and with no explicit right and wrong answers. In reality it’s going to be as a result of a raft of subtle changes Im sure. Is it society/media... or poor financial acumen inherited from parents?
A few posts back you talked about the blue/white collar mix. I'm not sure I entirely understood it. So, blue collar parents can have offsprings today that are
much more likely to attain white collar job positions, and thus have a different approach to spending money?
I sometimes log onto the DailyMail (trash journalism I know) and I'm often amused at all the side articles glorifying young C-list celeb lifestyles, from their clothes, cars, private jets. I do wonder if this sets unrealistic expectations for the younger generation... eg. "If you don't have the latest Range Rover on your drive you ain't living mate! Get one now!"
To clarify my point further, for the last decade our TV has been dominated by craptastic reality shows, x-factor and love island to name a few. These shows put lots of significance on image to achieve success. Image is everything to this generation.
Then there is a whole other argument regarding cheap credit.
I'm trying to track how we've got here vs previous generations.
What I have seen a huge amount of in 25 years working in the City which is the ‘my first bonus’ event. It’s an event where the recipient simply goes one of two quite distinct ways, they either rush out and buy a watch, car or suit (often all three) or they smack 90% of it into their property deposit fund and take their partner out for a lovely meal or weekend away. When you look at their social background it becomes very easy to have a pretty accurate guess as to which way they are going to go. The very crude rule of thumb is that childrennof home owning parents tend to save their bonus whereas the children from renting backgrounds gonoff in a huge binge. And the social split between parental home ownership and rental historically tends to be a rough divide between white collar workers and blue collar employment.
All very Crude metrics and with plenty of outliers but it’s something that repeats every single year almost without fail. What appears to happening in the wider environment is a very similar replication if this where youngsters are earning vastly more in new white collar employment than their parents who worked more traditional blue collar roles and you see the same reactions. It’s sort of that ‘new money’ event where the recipient can often not appreciate that the higher income that allows higher spending leads to higher living costs that creep up and soon you have exactly what we can see a lot of today which is above average income earners living hand to mouth. That used to be a wage to wage scenario not a salary to salary one. In essence, salary earners living wage earners lifestyles and forgetting or not appreciating that the salary earner needs to invest far more than the wage earner to maintain their notably higher standard of living.
That’s one aspect and it’s kind of human nature. The other absolutely enormous change has been the late 90s removal of the banking regulation that curtailed retail debt. Anyone who lives through the 90s can remember when our junk mail suddenly switch to being all about strange, previously unheard of credit card companies offering enormous credit limits. Our TVs filled up with advertisements for the likes of Ocean Finance while our post boxes were chocked full of irrestiable offers from MBNA. So suddenly the huge restriction to buying lots of things we didn’t need but really wanted that had been put in place originally to specifically prevent and curb this destructive element of human nature was gone and consumer money supply went through the roof.
You obviously have the scenario that young adults have the tendency to want to do the opposite of their parents and in this case their parents statistically sat in most evenings, going out was for special occasions, they saved money, they didn’t rush out and buy things that weren’t needed and didn’t go on overseas holidays all the time.
Maybe a schooling that seemed to tell every kid they were important and special has impacted on a section of society that as adults actually think they are important and special when they are just normal like everyone else in the planet? I know that I am being irrationally wound up by the Kayak adverts on TV at the moment where some chap stands on a mountain and talks about how really humbling this is. The implication to me being that it takes something as enormous as a mountain for his ego to be humbled and that he believes he is superior to everything normal in life. It’s almost certainly me reading something in to it but those adverts are really grating.
But in short you have a youth that has far more disposable income than before combined with the natural exuberance of youth where you think everything is new and that the old rules no longer apply, an absolutely monumental and practically unfettered access to debt and the rise of social media which brings spenders and savers together when they traditionally don’t socialise together, all wrapped up by an enormous retail selling machine that has invaded every aspect of their lives and preaches every second of every day that they are inferior if they do not own the same goods as these highlighted special people etc etc. It’s interesting to see how the selling machine has latched on so quickly to the whole transgender/gender free movement to bend goods and services. With the existence of the FANGS selling is so efficient it’s not true.
They have to be the most harvested humans that have ever lived. The system tells them to buy goods all day long and lends them the money they don’t have in order to comply (a bit like Germany and the PIIGS in the EU
) and slowly but steadily strips them of all wealth and hope and we will watch them becoming more and more desperate as they become poorer and poorer. Such is the effect of excess debt which only ever speeds up the removal of wealth from the poorer majority into the hands of the wealthy minority. There was a very good reason why every society since the dawn of time has regulated and restricted debt and why those that didn’t collapsed. I suspect the wealth divide among the Millenail generation is going to be absolutely enormous, very third world with very few in the middle ground. I consider myself incredibly fortunate to have grown up during a time of higher interest rates, strong lending regulation and the only direct debits being for utilities and savings plans and only really in regular social contract with similar peers. The temptations today are a barely defensible onslaught, day and night.
What is clear is that the new rules are the same as the old rules. They never change. We never change. But the way they are packaged and presented has changed manifestly and it is hugely exciting to see and be part of but we are in a transitional phase between ‘normals’ and it does look like a large element of the Millenial generation will be victims of this transition.
But the flip side is the amazing ingenuity that so many show and the absolutely amazing array of opportunities available that were never available before. A Millenial with their head screwed on who gets that the new rules are just the old rules has such breadth of opportunity ahead of them its phenomenal. But those who think the way things work are genuinely new and different and who succumb to the new peer group pressures and the immense marketing machine are sadly just the cattle to be harvested for the machine.
JaredVannett said:
Thing is DonkeyApple... who or what is to blame for this unnecessary spending attitude with most millennial's?
Is it society/media... or poor financial acumen inherited from parents?
I wonder if it was always the same. Small personal example; when I was fresh out of uni (admittedly over 20 years ago) most of my friends wanted to live in London and would take out loans for £10k+ (which sounded a lot at the time) to get a nice car etc. Is it society/media... or poor financial acumen inherited from parents?
I decided to pool together with my girlfriend at the time (now wife) all our money to see if we could save for a house deposit. So the car I purchased was someone's old "fishing car" which had lots of rust but which was mechanically sound. And it only cost £250. Plus it came with 6 months tax.
It took us 12 months of very modest living including living at home with parents before we could put together a £20k deposit. But that meant we could buy our first property aged 22.
That type of approach has worked well for us over the years. Perhaps it wouldn't have suited everyone, as we would often compromise to some level spending in the present for some future trade off. But it gave us a great springboard and now just over 20 years later we are financially comfortable.
JaredVannett said:
Thing is DonkeyApple... who or what is to blame for this unnecessary spending attitude with most millennial's?
Is it society/media... or poor financial acumen inherited from parents?
A few posts back you talked about the blue/white collar mix. I'm not sure I entirely understood it. So, blue collar parents can have offsprings today that are
much more likely to attain white collar job positions, and thus have a different approach to spending money?
I sometimes log onto the DailyMail (trash journalism I know) and I'm often amused at all the side articles glorifying young C-list celeb lifestyles, from their clothes, cars, private jets. I do wonder if this sets unrealistic expectations for the younger generation... eg. "If you don't have the latest Range Rover on your drive you ain't living mate! Get one now!"
To clarify my point further, for the last decade our TV has been dominated by craptastic reality shows, x-factor and love island to name a few. These shows put lots of significance on image to achieve success. Image is everything to this generation.
Then there is a whole other argument regarding cheap credit.
I'm trying to track how we've got here vs previous generations.
Cheap credit is definitely the answer. For decades interest rates have been low enough for people (and government) to spend frivolously. We’re now addicted to a standard of living and service provision that we cannot really afford. It’s not youngsters who are entirely to blame it’s largely their parents generation who started living on credit, but everyone does have to take responsibility for their own actions at the end of the day.Is it society/media... or poor financial acumen inherited from parents?
A few posts back you talked about the blue/white collar mix. I'm not sure I entirely understood it. So, blue collar parents can have offsprings today that are
much more likely to attain white collar job positions, and thus have a different approach to spending money?
I sometimes log onto the DailyMail (trash journalism I know) and I'm often amused at all the side articles glorifying young C-list celeb lifestyles, from their clothes, cars, private jets. I do wonder if this sets unrealistic expectations for the younger generation... eg. "If you don't have the latest Range Rover on your drive you ain't living mate! Get one now!"
To clarify my point further, for the last decade our TV has been dominated by craptastic reality shows, x-factor and love island to name a few. These shows put lots of significance on image to achieve success. Image is everything to this generation.
Then there is a whole other argument regarding cheap credit.
I'm trying to track how we've got here vs previous generations.
EddieSteadyGo said:
I wonder if it was always the same.
I think it always has. I don’t believe there is anything new here. Societies have always warned of the dangers of debt and vanity and their power to destruct. And there have always been excessive consumers of debt and excessively vain people. I think what has changed is the ratio in society and the perception of such people. Gone are the stigmas. There is no longer any stigma to borrowing to consume and there is no longer any stigma to looking at yourself in the mirror all day and spending everything purely on yourself and looking fabulous.
Amusingly, most trendy bars of today are jammed packed with the people who 20 years ago would only be found flaunting their beauty and throwing their money around in gay bars. It’s the iconic gay male lifestyle which has become the normal male lifestyle for swathes of society. Spend everything, look fabulous and hope that a ‘saver’ will finance your lifestyle later in life etc.
The big cultural change is in the number of men now living a 20th century woman’s lifestyle of shopping, beauty and jewellery competitions. A lifestyle which has always required another person to pick up the bills.
Now that's one of the stranger posts I've read here in the Finance forum.
Something I would add is the truly staggering lack of understanding of the "cost of money". There's a generation of people who think they can genuinely afford their lifestyle so long as they can afford the monthly payments - and hence waddle through life with a staggering amount of debt at staggeringly high interest rates. No wonder they "can't afford the deposit for a house" and "can't afford to save for a pension". Meanwhile lenders think it's Christmas with base rate at 0.25% and people borrowing at 20% or more. That's a huge margin.
Something I would add is the truly staggering lack of understanding of the "cost of money". There's a generation of people who think they can genuinely afford their lifestyle so long as they can afford the monthly payments - and hence waddle through life with a staggering amount of debt at staggeringly high interest rates. No wonder they "can't afford the deposit for a house" and "can't afford to save for a pension". Meanwhile lenders think it's Christmas with base rate at 0.25% and people borrowing at 20% or more. That's a huge margin.
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