Let’s face it. Kids are financially doomed these days. If you are under 25, maybe even under 30, you might as well give up.
Or, to put it another way:
“Our generation sees the world
Not the same as before
We might as well just throw it all
And live like there is no tomorrow
The official view of the world has changed
(In a whole new way)
Live fast ’cause if you don’t take it
You’ll never make it
There’s only one problem. That quote is from The Offspring song, “Nitro (Youth Energy),” released in 1994 – almost 30 years ago!
If you are under 25 or the parent of someone who is. Don’t give up!
I’m here to give you hope.
Why Kids are Doomed Today
A friend of mine passed along this MSN article.
I’ll summarize the main points for those who don’t want to read it.
A TikToker named Gen X Jess is the mother of 25 and 28-year-old kids. She’s made a video about how frustrated she was about her kids’ financial difficulties. The kids have had to deal with rising housing and health costs. Let’s look at the bright side for a second: Student loans are not mentioned in the article. That’s the triple whammy for kids nowadays.
As the mother explains, working hard and getting a good job doesn’t get you what you want because the world has changed. She explains that when she was a kid, she struggled too, but knew it was temporary.
The TikTok went viral with millions of views and tons of comments, so it’s safe to say that it struck a chord.
The kids are definitely doomed.
Finding a Solution
There’s no silver bullet. Well, perhaps the government could fix a bunch of things, but no one will hold their breath hoping for that to happen.
Instead, I suggest looking into the following:
- Learn Financial Literacy
If you are here, you’ve already taken that first step. Learning about personal finance is so important.
I’ve been writing about my financial journey since 2006, when my net worth was probably under $50,000. I realize no one wants to read three thousand articles. I should write a more concise money journey, but in the meantime, I wrote this FIRE Hero Journey
You are in luck if you parent a kid in preschool through high school. You’ve got time to help them build great financial habits. I’ve created Kid Wealth because kids are going to need financial literacy to navigate this changing world. Kid Wealth is a one-stop financial literacy resource for parents and kids. You’ll find book reviews, games, apps, and even television shows to help kids become money experts.
- Frugality is the Key
I grew up in a family where my mother would clip coupons. She’d then shop at double coupon places and pair them with the right sales so that the products were free or maybe a dime. I don’t think I would call her an “extreme couponer,” as you may have seen in some shows. She just knew how to work the system.
Frugality is just the world I grew up in. My mother still has the same couches she had when I was a baby. Of course, things were better constructed back then, but that’s truly “Buy It For Life.”
There are a billion ways to save money on stuff. You can Google “Save Money On…[X]” and get some websites immediately. With ChatGPT and generative AI, you could ask it how to save money on any big purchase you have coming up, such as buying a car. You may have to do additional research, but you’ll start with 80-90% of the best solution.
A frugality mindset can go a long way. If you are young and frugal, you can…
- Take Advantage of Compound Interest
Compound interest is a river. You want the current working with you rather than against you. The housing market going up a lot every year is an example of the current working against you.
If you have time to invest and get the current working with you, it can neutralize that housing market working against you.
- Hack That House
After college, I lived at home for a little bit. I don’t remember it being too bad. It was kind of comfortable. Of course, that doesn’t work for every family dynamic. After that, I moved into a small apartment with a couple of friends. It was a nice place, so it felt like a nice upgrade. We lived together for maybe five years. Then he bought a condo, and I lived with his girlfriend/fiancée for a year.
Unfortunately, there was never a good buying opportunity from when I left college in 1998 to 2004. I bought at the top of the market, and prices crashed in the next 3-5 years with the Great Recession. In hindsight, it would have been best to continue renting and buying at a lower price when that crash occurred.
It doesn’t look like the crash is coming soon. It feels like 2003 when it might be years away. There’s just too much demand and not enough supply. As soon as supply becomes available and/or interest rates get better, there will be people with the money on the sidelines looking to buy.
In the meantime, there are several housing hacks, such as living in an accessory dwelling unit or a similar tiny house. You can have roommates as I did. Some people may be able to buy a condo and have roommates to help pay the mortgage. That worked with my friend and fiancée when they had me as a roommate.
There are numerous articles on house hacking. I’ve been thinking about writing a guide myself.
Maybe the kids are indeed doomed.
I like to be a little more optimistic. This is how kids will learn to be more resourceful. I had a friend who used to say, “I like when gas gets to $5.00. That’s when people start to make changes.” This was back in 2009 when Tesla had just released its first cars.
I’m encouraged to see Generation X recognize the difficulties. That means they may offer help if they can. Unfortunately, they (we) are in the sandwich generation, which may also mean helping older generations.
What do you think? Are the kids doomed?