But isnt that what was said about the millennials and gen x’ers back in the day? Seems its more likely the issue is the initial desire of the younger, 20-something’s wanting to play and have toys before they buckle down.
Another example of the impact of student debt (Fortune) [$64k debt, $166k/year income in upstate NY]
2 Likes
Home prices may or may not be the problem here, but if they are in this couple’s case, then they bought a house before they could afford it. That is no argument for student debt relief. That’s been a problem for a very, very long time. The author and the couple profiled think they are special because of how much debt they chose to take out, but they are not. They could pay off the student loans if they wanted to.
There is an overall shortage of housing, but not for people making over 160k/yr.
1 Like
Am guessing a 2 br house in upstate NY in 2020 wasn’t all that expensive. And unless they got financial help from family, they apparently qualified for the mortgage, even with their debt level. Was it a good decision? Who knows. But now they feel burdened by payment requirements so probably not so good in retrospect.
1 Like
We used to call them hippies. But that label came with more societal disapprobation than today’s “seeking work/life balance”.
1 Like
Agreed.
If I was advising them (which I am in no position to do), I would advise them to sell the house, use the equity that they have gained since 2020 to pay down their debt, and then rent until they pay off the debt. Renting is not evil and it is not child abuse to raise children in rental homes. People have done this successfully since time immemorial.
And if they don’t want children, then they should grow up and be honest with those around them. Parenting kids requires far more sacrifice than paying off 65k in debt in a few years requires, no matter what class you are in.
3 Likes
Degrees (or progress toward a degree) are required for NAEYC-accredited facilities. Most facilities are not accredited in this way, but many high priced ones in urban areas are.
1 Like
I hadn’t thought about that. How expensive the house was depends what month they bought it and what part of NYS they’re in. People left the City in droves starting in the spring/summer of 2020 (after COVID hit but before the vaccines). Real estate prices skyrocketed from the northern outskirts of NYC well into the Hudson Valley. If their income was ~$100k that year, I think they either bought early in the year or bought in the Capital Region or Mohawk Valley.
1 Like
and – also adding – their house value has risen 100K in the past 3 years. That has never happened, nor will it where we live in the midwest. Not feeling too sorry.
my first thought on this was “she doesnt want kids.” I’d love to revisit this couple in 7-10 years.
3 Likes
Mine has likely gone up $200k in the same time, thanks to the bidding wars that happened last year. Not much use to me since I can’t even sell and downsize in the area.
that’s fair. but, as i’ve said before, we’d love to have new residents in the landlocked midwest! the families who have moved here from the coasts have been able to purchase beautiful houses. the margin of equity in coastal housing has risen exponentially over midwest housing, so if it was purely a matter of money . . . this would be an option.
i know. i know. no one wants to move away to cash out on their equity (because once you move away, it’d be hard to afford to move back). But - it is thinking outside the box … .
1 Like
The article says they bought before the market went bananas, and if their little 800 sq ft 2 br house is worth 100K more now, they may live in a more hotly desired area. Also, the article says her job may also give her a 10% bonus so she may have another $12,500 at her disposal that we aren’t factoring into her ability to pay down her loan.
1 Like
This article came out in USA Today a couple of days ago and it might help the myopic couple and their friend behind this Forbes article. I also didn’t have to pay to access it and it explains this better. Another social trend online that’s a rebranding of an idea from at least the 1980s and possibly before, but they make it relevant and trendy, so worth a read. No mention of saving for college, though, so colleges may want to reconsider their price increases if they want students in the future. It’s a trend that doesn’t look tied to any particular social class at all:
https://money.usnews.com/money/personal-finance/family-finance/articles/what-is-soft-saving
Yup.
I don’t want to sound ancient, but I am also having a hard time sympathizing.
“I should have been saving for 10 years and I wasn’t.” And that was your choice. So buckle down now and pay off those loans.
5 Likes
Problem is when people decide to do this on essentially other people’s dime (in this case, taxpayers). When you take on student loans, you are making a promise to at least try to earn enough to pay it back. Not enjoy life, remodel your kitchen, travel and so on. I have no problem with people deciding they don’t need to make a lot, or not have kids or whatever they choose to do. It’s deciding to go to a $60k a year college with a degree in latin and then deciding that you’d rather travel and brunch than pay off your loans. I am however ok with a small one time forgiveness for people who truly came into hardship and are working multiple jobs and still can’t pay off. This situation is not one of them.
5 Likes
Even millions aren’t enough if you don’t have financial responsibility. That’s why people win lottery and lose everything in no time.
2 Likes
There was a Netflix documentary recently about money and debt - i forget the name. One of the guys the financial advisor was trying to help - he had $200k in student loans and made six figures salary, regularly spent boatloads of money on brunch, shopping, traveling. and flat out said he had no intention of ever paying that off. Didn’t even try to make minimum payments. Until the advisor explained the bad credit would end up costing him. I wonder how many people are in that boat. Where’s the sense of obligation and integrity? If you borrow a pot from your neighbor do you just keep it??
When I was growing up, my parents simply didn’t believe in debt - if they couldn’t pay for it in cash, they didn’t buy it. Maybe they were extreme, but that meant no vacations, one old car for as long as I remember, no eating out, an apartment so small, they slept in the living room for years. But they had zero debt other than a mortgage after years of renting.
2 Likes
There is no such program. There is forgiveness for a disability but not for someone who has been on the treadmill for years just trying to pay the accruing interest. No bankruptcy forgiveness except in a few cases (sort of recently).
3 Likes
Yes, I’d call your parents extreme. There’s nothing wrong with debt. What’s wrong is not fulfilling your obligations.
I’m not sure I’d call it that extreme. It sounds like they didn’t have a lot of disposable income. My parents were similar, but they did have a mortgage by the time I was born. They were in their mid to late 20s. But definitely never a car payment. That was a big no no. And we didn’t really go on vacations other than to grandmas house. And we never ate out that I can remember other than fast food. And definitely never any credit card debt. That was a big no no too.
5 Likes
Maybe it was a different generation thing (delayed gratification) - they were also first generation immigrants with very little money or relatives to depend on - they came here with one long term goal - to improve their kids lives and get them a good education so they weren’t going to mess that up. The later mortgage was probably just because they had not built up any savings yet. Credit card debt was a big no no in our house too.
1 Like