We weren’t and aren’t either - and we traveled, though our version of travel and other’s might differ since we did a lot of tent camping around the US/Canada. Where we cut costs was in everything else (clothing, lavish Christmases and birthdays, summer camps, expensive sports, house updates, putting off retirement contributions during the college years, etc). We also purposely chose a non-HCOL area, though we’re not in a super low COL area either.
Our kids chose colleges where they got merit aid mostly - some need-based, but not oodles as I’ve seen true “low economic” kids get.
It amuses me that people who earn 300K consider financial life difficult. It would be interesting to see their thoughts if they had a median (or less) income and some “freebies” instead.
We all make our choices and spend accordingly. No regrets at all here. Our kids tell us they loved their upbringing plus tell me their friends are often envious, and if we guessed wrong about our retirement needs, they’ll be there for us. (I don’t think we guessed wrong.)
One can’t get time back. We cherished the time with our kids and did things with them. They’ve seen a lot of our planet compared to their peers and have no desire for “designer” anything (like their parents). It’s ok that they weren’t full pay at the college of their choice. They all speak positively about their colleges and all are doing well as adults with no real desire to be in the top 9.9%. They’d rather enjoy the journey than do nothing while squirreling away all (vs some) $$ for college (or retirement).
Sometimes I swear I inhabit a different universe than some other posters. Maybe I do.
But my kids have technical jobs but don’t live in the Bay Area, NYC or DC or wherever it is that you live where it’s impossible to buy a house or live without roommates. They do live in cities on the East coast. They have both been entirely self supporting since the day they graduated university.
One lived by themselves until moving in with a SO at age 29. Saved 6 figures in their Roth 401k before 30. The other lived with their SO, which I guess is a roommate and saved 6 figures to buy a house and a wedding. Before 30 also. And funded their 401k.
I have no idea how they attained these things. Other than working their jobs and having no college debt. They owned cars (small economy cars) and live in cities. They occasionally go on vacation and eat out. I have no idea how this is unattainable to this generation. I really don’t.
Real estate markets depend on many factors and are difficult to predict well. However, there are several factors that suggest the recent rapid increases in home prices are not sustainable, and a significant decrease is possible. These factors include:
Steep home price increase fueled by COVID-related factors that may change without COVID-related factors
Near record low interest rates with large federal borrowing may not be sustainable
Lack of inflation in spite of large borrowing and large printing money may not be sustainable
Fed buying trillions of mortgage back securities at start of COVID and considering beginning gradual taper may impact several of above
Stock market may be unnaturally high due to Fed support activities
Silicon Valley tech companies have become more open to employees living out of the Bay and working remotely
Bay Area population has had a gradual decline for past few years, after steadily increasing for decades, which may influence demand for housing
People often have short memories about the health of the economy. In many areas of the Bay Area, home prices lost nearly half their value between 2007 and 2009. Home prices didn’t return back to inflation adjusted 2006 levels until earlier this year. Rapidly increasing home prices over a period of a few years is by no means a guarantee, particularly in a market in which home prices are unnaturally high.
I’m going to go out on a limb and say that a single adult making an income in the mid 5 figures would do very well in most of New York State above Westchester County.
Well, let’s take Albany NY as an example. $75k salary yields take home of $55k. Average rent, yearly, is another $16k. So that leaves 39k for insurance (health, car, renters, life, disability), food, utilities, commuting, car payments, health care and miscellaneous costs, which could certainly add up to $20k or more.
Your kids are being exponentially more responsible than so many people in their 40s & 50s in this country.
In the summer of 2020, at the height of the terrible time our country went through because of Covid-19, I remember seeing a video of lines of cars (I think in Texas) for people waiting for free groceries to be handed out. I can understand being on your own in your teens & twenties and not being financially prepared for a months long emergency, but the lines were filled with people in their 30s, 40s & 50s, all driving expensive cars and talking on expensive smart phones, waiting hours for $40.00 worth of free groceries. I think a surprisingly large segment of our adult population doesn’t save, and they just live for the moment.
Yep, and the FinAid officer will not be impressed by that feeling. At 300k you absolutely can and should be expected to pay for college - if it’s „difficult“ for someone in that bracket, then it’s likely a matter of priorities, not of means.
If other indulgences are more important, then there are always less costly college options. Pick your poison (not you, literally)
How could one not be moved by “I need your money to pay for my kiddo’s college. Do you have any idea what a house in the Hamptons costs these days? And the Bentley is a 2018, for heaven’s sake! Do you really expect us to eat domestic caviar? Isn’t it for domestics? Like the label says?”
If three kids are the plan, then instead of a „very nice“ house, a practical one might be prescribed, and a Hyundai 3-row SUV instead of the X7.
Those are not „hard“ or „difficult“ choices, just pragmatic ones.
(There are people facing actual difficult life choices with <50k family income, and their kids having food insecurities - at high school and even college.)
My ds lives in the L.A. area. He currently rents a house with three other guys. Their monthly rent is $7,500.
As a single person, I don’t see any quick path to home ownership for him, notwithstanding his excellent salary. Even if he were married and at the household 9.9% income amount of $201,000 listed above, buying a decent starter home would still put a payment well above the recommended 30% of take home pay (that is the rule of thumb, correct?).
It is a choice. He could live elsewhere, but he likes it there.
Ds has a friend who bought a house in San Jose. He and his sister (who lives elsewhere) bought it together. He has to rent to two housemates to make it work financially.
Not every young, single person needs to have a quick path to home ownership, including ones with a high salary. While not the traditional “American dream”, there are many advantages to renting + saving, not spending a large portion (often far above 30%) of income on home expenses, and having the flexibility to easily move.
I also moved to a high cost of living southern CA region after college and have known many in that age group during a time when inflation adjusted home prices were similar to today’s levels.
Among younger single persons, owning a home was quite rare. Most rented – usually apartments, but also sometimes a room of a suburban home. Single persons who did purchase real estate usually bought a condo, rather than a home. Among engineers I’ve known, home ownership usually occurred later on, often after having gotten married and having 2 salaries + some savings. This group generally chose location and size to fit with budget, avoiding the most expensive areas of the county.
One of the big issues now is corporate buyers outbidding everyone. There are 5 big wall street investment companies buying up everything. The houses go on the market, the investors jump in and make a cash bid and close immediately. There was a news piece that some neighborhoods are now 65% rentals, which isn’t good for neighborhoods.
We don’t have a lot of apartments for rent around here either. $2000 a month for a one bedroom, extra for pets, extra for parking.
Oh, I know ds is not in ANY hurry to buy a home. I was just attempting to add to the argument that even at the 9.9% income level for a household, it might be tough to buy a house in L.A.
Idk what big, East Coast city @deb922 kids are in. I think it is great that they and their S.O.’s have accomplished what they have. My ds saves as well, but it’s going to take him a very long time (especially if he remains a single person) before home ownership is within the realm of possibility for him.
He has high school friends who have remained in our former state who bought homes at 22 years old as singles. The also started off but still remain within the five-digit income levels.
I do think numbers that reflect location are more helpful. Which is why these threads often get into these circles about whether or not $300k (or whatever the number of the day is) isn’t, “enough.” We see this same discussion about wealth levels on the retirement thread. Definitely depends on many factors.
Ds and his roommate weren’t quite that high (maybe $3,500 for a 2-bedroom), but being in 935 sq ft while working from home was tough. After six months of that (they were already in a month-to-month situation), they stored all their belongings and lived a nomadic life for twelve months, becoming serial air BNB-ers. They just now signed on a lease in September of this year with these two other guys.
I should add that getting a rental house was also competitive. Landlords would have several people apply and had their choice among groups of tenants. You had to be ready to go with paperwork pretty quickly after something was listed.
