On payday, it feels like my wife and I have the means to do anything we want. The day before payday, the despair of inescapable long-term debt feels overwhelming.
Welcome to the middle class!
I realized, while doing our taxes this year, that we had joined this shrinking club — at least as far as the numbers go.
But the millennial middle class is much different from that of the baby boomers and even Generation X. We all want the same things — happiness, comfort and security — just, it seems, in a different order. That generational re-prioritization bucks historical expectations of how we should be spending or saving our money.
Listen, I’d love to buy a house, but I was told a college education was the key to my future (hey, it got me this far). That key used to open the door to home ownership, but the average college debt for my graduating class is $30,000.
Well look at that — I’m above average. And let’s not get started on wage stagnation.
With my laughable amount of college debt — because you can laugh or cry about it — owning a home seems like a distant dream.
My brother-in-law and my best friend, who both have well-above-average student debt loads, bought houses after saving while living with mom and dad. With rents higher than mortgage payments and no equity to show for it, how else can you do it?
If I could redirect my student loan payments into savings for a down payment I’d have a home in no time. Or I could survive on ramen noodles.
We’re already putting some money away, but my wife and I don’t plan on adopting the ascetic life just to afford a picket fence. And that’s fine, we’re in no hurry. And we’re not alone.
Millennials are slower getting into their first homes than previous generations. There are plenty of reasons for that, but a lot of it comes down to housing affordability in the cities we’re moving to — which in our case is 1,500 miles from our parents.
We’re not moving to distant cities because they’re affordable — the draw is in the experiences those great places such as Vancouver and Portland offer.
My wife and I, at least, are all about research that shows money can lead to happiness when it’s spent on experiences, not possessions. So you won’t find a TV at our apartment — though, fine, you will find four Apple products between us.
All those things once reserved for large disposable income-types have become staples. We’re staying home more often than not, but local beers, local eats, trips and concerts all get lines in our budget. Why else are we shelling out more than $1,200 per month in rent every month to live here?
Maybe you’re thinking I wasn’t taught the right path to financial success. Well, my parents tell me all the time to quit buying$5 beers and records — yes, I still listen to records — so don’t fault them. The only thing about finance I learned in school, without going out of my way, was how to balance a checkbook.
Again, this young middle class wants the same things as those before us. We have our own generational challenges, and we’re taking our own path.
So don’t fret, parents, economists and homebuilders. It will take time, but there can still be a chicken in every pot.