5 ms·

Housing and childcare are also outpacing inflation and wages. It’s crazy how much more things cost as a percentage of income than in the ‘90s. We’re going to ha

Housing and childcare are also outpacing inflation and wages. It’s crazy how much more things cost as a percentage of income than in the ‘90s. We’re going to have an inevitable retirement crisis when most millennials are forced to work until they die since they won’t have anything left to put into savings. 70% of Americans can’t even put together $400 in an emergency. I see things getting even worse unless something significant changes.

war1025 8y ago
Part of that is the structure of the economy, like you say. A significant proportion of it, as a millennial myself, is people having a terrible understanding of personal finance. If you spend all your money on things to impress people or because "you deserve them", then you end up with an empty pot.
- diogenescynic 8y ago
  There have always been people with bad personal finance. The difference is that the necessities that you cannot avoid all cost orders of magnitude more—-healthcare, housing, college, childcare. This means people how a smaller margin for mistakes and even one hospital trip can put them in debt for years/decades or bankruptcy.
  - war1025 8y ago
    The rules have changed and people are still trying to live like their parents did. Healthcare is expensive. If you are on Obamacare, it is subsidized. Housing is expensive if you want to live in a "good" neighborhood. There are a lot of "okay" neighborhoods that people can afford just fine. College is expensive, but it really depends on which university you go to. As much as anything, the college issue is intentional misdirection by the people who are steering parents and kids into those choices. There are very economical options, but the price tags and ramifications of those choices are usually not spelled out very well to the people making those decisions. Edit: Childcare is absolutely expensive, to the point that I really expect having a parent stay at home to swing back around to being more normal. We have three kids and if my wife worked, it would cost more to have them in daycare than she would make while they were there.
    - gdfasfklshg4 8y ago
      One parent not working has massive negative externalities for everyone. For society the labour force shrinks and the economy follows. Your wife's career is effectively over after 5-10 years off for childcare. If you lose your job your family will be in trouble. If you get divorced you will not enjoy the results.
      - war1025 8y ago
        Two parents working has negative externalities as well. Costs adjust to what families can bear. Double incomes means increased prices and reduced purchasing power for everyone. My wife's career never started. Her degree was worthless so she was working as a barista before we had kids. She does some work on the side, but she was never going to generate the kind of income I do solely based on our respective career choices. If I lose my job, we can live off savings for several years. If I am unable to find work, the economy has bigger problems that are independent of my wife working or not. If I die or become disabled, that's what insurance is for. No one enjoys divorce. In some cases it is a necessary evil, but I don't think anyone would ever characterize it as pleasant.
        deleted 8y ago
        [deleted]
    - normal_man 8y ago
      Instead of just going "welp, this is how things are now", there is always the option to change the rules back. How about we go back to 90% taxes on the top brackets and see how millennials fare then?
      - war1025 8y ago
        The rich don't make their money off of taxable income. They make their money off of appreciating assets. You can tax them all you want and it won't change a thing. You could try to create a wealth tax, but basically anyone with any assets would fight it tooth and nail and it would never go through without something akin to a communist revolution.
raisedbyninjas 8y ago
The likelihood of a crisis isn't just propagating out current trends. Once enough boomers die off, how will policy change? In 5-15 years, universal single-payer healthcare and tuition debt forgiveness are conceivable.

war1025 8y ago

Part of that is the structure of the economy, like you say. A significant proportion of it, as a millennial myself, is people having a terrible understanding of personal finance. If you spend all your money on things to impress people or because "you deserve them", then you end up with an empty pot.

diogenescynic 8y ago
There have always been people with bad personal finance. The difference is that the necessities that you cannot avoid all cost orders of magnitude more—-healthcare, housing, college, childcare. This means people how a smaller margin for mistakes and even one hospital trip can put them in debt for years/decades or bankruptcy.
- war1025 8y ago
  The rules have changed and people are still trying to live like their parents did. Healthcare is expensive. If you are on Obamacare, it is subsidized. Housing is expensive if you want to live in a "good" neighborhood. There are a lot of "okay" neighborhoods that people can afford just fine. College is expensive, but it really depends on which university you go to. As much as anything, the college issue is intentional misdirection by the people who are steering parents and kids into those choices. There are very economical options, but the price tags and ramifications of those choices are usually not spelled out very well to the people making those decisions. Edit: Childcare is absolutely expensive, to the point that I really expect having a parent stay at home to swing back around to being more normal. We have three kids and if my wife worked, it would cost more to have them in daycare than she would make while they were there.
  - gdfasfklshg4 8y ago
    One parent not working has massive negative externalities for everyone. For society the labour force shrinks and the economy follows. Your wife's career is effectively over after 5-10 years off for childcare. If you lose your job your family will be in trouble. If you get divorced you will not enjoy the results.
    - war1025 8y ago
      Two parents working has negative externalities as well. Costs adjust to what families can bear. Double incomes means increased prices and reduced purchasing power for everyone. My wife's career never started. Her degree was worthless so she was working as a barista before we had kids. She does some work on the side, but she was never going to generate the kind of income I do solely based on our respective career choices. If I lose my job, we can live off savings for several years. If I am unable to find work, the economy has bigger problems that are independent of my wife working or not. If I die or become disabled, that's what insurance is for. No one enjoys divorce. In some cases it is a necessary evil, but I don't think anyone would ever characterize it as pleasant.
      - deleted 8y ago
        [deleted]
  - normal_man 8y ago
    Instead of just going "welp, this is how things are now", there is always the option to change the rules back. How about we go back to 90% taxes on the top brackets and see how millennials fare then?
    - war1025 8y ago
      The rich don't make their money off of taxable income. They make their money off of appreciating assets. You can tax them all you want and it won't change a thing. You could try to create a wealth tax, but basically anyone with any assets would fight it tooth and nail and it would never go through without something akin to a communist revolution.

raisedbyninjas 8y ago

The likelihood of a crisis isn't just propagating out current trends. Once enough boomers die off, how will policy change? In 5-15 years, universal single-payer healthcare and tuition debt forgiveness are conceivable.