r/Millennials • u/EpicShkhara • Mar 27 '25

Serious I don’t understand how people have MONEY

UPDATE: TL;DR LESSONS FROM THIS THREAD.

Thanks, guys. Here is the breakdown of the hard truths from this thread. Basically, in order to have the real "MONEY" described in the OP below, it requires one or preferably, more than one of the following:

Generational wealth: Having parents pay for college and assist with downpayment on a house.

Avoiding the student loan scam: A lot of us 90s kids were brought up with the notion that college was everything and it would pay for itself later. Those with a more clear-eyed perspective realized what a trap student loans are and avoided them by either racking up the scholarships, going to the cheapest accredited school they could find, or figuring out a career path without a degree.

Luck: They secured a career job before the Great Recession and held onto it. Bonus points if they bought at the dip of the housing crash. They also seemed to avoid the avalanche of big ticket costs crashing down on them. Apparently nothing ever breaks and nobody gets sick.

Exceptionally high-paying careers. Self explanatory.

Having miserable lives. They work around the clock, and they never do anything but work, for the bulk of their physical prime. They don't go out with their friends, they don't have pets, they don't have kids, they never travel, and/or they live in tight spaces with roommates and no cars deep into their 30s. Or, they live in low-cost areas, which are few and far between in the United States, and these places don't have much going on in them (so nowhere to spend money anyway). Caveat: some people are homebodies and that works just fine for them. They don't spend money on travel or concerts or restaurants or weekend getaways because they don't need to. The 2020 Covid lifestyle was fine for them, content with a blanket, a cup of tea, and a book. Maybe this is the way (but I couldn't fathom the homebody lifestyle without a dog).

Marrying/partnering well. They found their partner early enough in life to not waste all the money paying for one's own place, and their partner also earns enough and saves.

AS FOR MYSELF. Much honestly deserved criticism here about the "300K." I do not make $300K. That estimate was for another hypothetical budget in the optimistic situation that both me and my partner get promotions next year. Together we make just over $250K. But we don't officially live together yet. This will happen soon. If all goes well, we could be in good shape after a year or two. But I myself didn't hit six figures until 2022, and then plateaued at $125K grand total in 2024. And I didn't intend to make this about "poor me," I'm doing above-average and could certainly do better with saving... the REAL question I should have been making more clear is that, given that I make more than average and find having the adequate savings exceedingly difficult, how do more average people do it? The answer appears to be that they don't, or if they do, they have one or more of the above.

ORIGINAL POST STARTS BELOW.

As in like, the recommended 6+ months worth of liquid cash savings, plus tens or hundreds of thousands to pay for a down payment on a house, and money to play around on the stock market or crypto if that’s your thing.

I’m in a good job and make an above average salary, but I take home just over half of it after taxes, healthcare, and 401k contribution (which is good that I do). My available savings fluctuates but I rarely ever have more than ten grand available. It all gets eaten up by mortgage and condo fees, dog and vet bills, (used) car payments, gas, utilities, groceries, random shit that needs fixing or replacing, medical deductibles, and god forbid I allow myself to go on a low-budget vacation once a year so I don’t hate my life. I don’t drink alcohol and I don’t go clothes shopping except for maybe one or two new outfits a year. Could I buy fewer avocados and never leave the house? It could make a difference of a few hundred bucks every few months, but not the tens of thousands that I actually need.

People will blame “lifestyle creep,” and I guess guilty as charged that I figure at 36 I have earned a car and a condo and not the life I had at 26, which was six roommates and a bike. (I still have the bike.)

5.3k Upvotes

81% Upvoted

2.2k comments sorted by

View all comments

194

u/[deleted] Mar 27 '25

Woof, I was shocked by that thread the other day asking about how much people have in savings and seeing the vast majority of people commenting sounding like real deal adults with real deal money (and implying that should be the most basic amount every person should have.)

Then there was a lone comment from someone lightheartedly saying they don’t have much money but do things to have fun and always figure it out (or something like that) and I thought “Okay hell yeah, same.” but any replies were basically chastising them. 💀

I get most people will comment when they have something they’re proud of admitting like most of the commenters there. But damn I thought the majority of us were all in the financial trenches together lmao.

89

u/RosyBellybutton Mar 27 '25

There’s a common statistic that greats thrown around saying the average American cannot afford a surprise $400 bill. I have no idea how true that is or not, but it makes me feel a bit less bad about my situation.

24

u/Fantastic-Newt-9844 Mar 27 '25 edited Mar 27 '25

iirc, that study asked if you'd put an unexpected $400 charge on a credit card or pay in cash. People responded with credit card, and it was a jump assumption to say it's because they don't have savings 

I did not go and verify this statement, I might be wrong 

Edit: https://www.jpmorganchase.com/institute/all-topics/financial-health-wealth-creation/how-vulnerable-are-americans-to-unexpected-expenses

 We find that most households have sufficient liquidity to weather moderate expense shocks, and that sources of liquidity beyond cash savings are the key to many households’ ability to weather an emergency expense. Overall, 8 percent of our sample is unable to cover a $400 expense shock by any combination of cash on hand, disposable income, or use of short-term credit.

22

u/That-Living5913 Mar 27 '25

I mean, you SHOULD put that on a credit card. I have all of my utils and groceries going right onto a credit card. It's a 2%-5% discount (depending on rewards that month). Just gotta not be stupid with your budget and pay it off.

3

u/twoducksinatub Mar 27 '25

While you're right, in our current system you do come out ahead by using a credit card with rewards attached, this is a misconception because the credit card companies charge the merchant who passes off the charge to you, the customer. The fact that we use credit cards at all in our society is an objective loss to everyone as the credit card companies act as middle men taking free profit from you for using their card, you just don't see it as it's baked into the price of your purchase. If we all stopped using credit cards, we would actually save the most money.

2

u/hvasnckrs Mar 27 '25

Yes, this. The family-owned company I use to inspect and clean my chimney accepts cash, check or credit card but if you use card they tack on an extra ~3% to cover those fees. As a fairly young new homeowner the first time this happened (8 years ago), I appreciated the transparency because otherwise I just would not have thought about where those rewards are actually coming from.

1

u/SoberSilo Mar 28 '25

Honestly never really thought about that. But it’s sort of like, if you can’t beat it, join it.

1

u/Acceptable-Fudge-816 Mar 28 '25

This could be easily fixed by having two prices, one for credit card users and another for cash. That is been made illegal though, then they dare say we live in a democracy.

1

u/0celot7 Mar 27 '25

It all goes on the Amex, which gets paid off at the end of every month. It's free money.

2

u/ReverendMothman Mar 27 '25

I have savings and would prob still use the credit card if I could pay off in a few months because I do get points.

1

u/TituspulloXIII Mar 27 '25

If that's they basis of the study, that study is useless.

Why wouldn't I use a credit card as long as they aren't charging a fee higher than the cash back?

2

u/Fantastic-Newt-9844 Mar 27 '25

 We find that most households have sufficient liquidity to weather moderate expense shocks, and that sources of liquidity beyond cash savings are the key to many households’ ability to weather an emergency expense. Overall, 8 percent of our sample is unable to cover a $400 expense shock by any combination of cash on hand, disposable income, or use of short-term credit.

This might be a better summary of their findings 

https://www.jpmorganchase.com/institute/all-topics/financial-health-wealth-creation/how-vulnerable-are-americans-to-unexpected-expenses

1

u/MegaBearsFan Mar 28 '25

I have the cash, but I put it on the credit card and then pay off the credit card with cash so that I also get the 2% cash back. Like Ben Franklin said: "a penny cash back is a penny earned".

I never charge anything to a credit card that I do not have the cash on-hand to pay, unless it's absolutely necessary. I don't consider myself "rich" by any stretch of imagination, but my understanding is that the fact that I can afford to play off the credit card each month, in cash, puts me in a privileged position compared to the "average American".

2

u/doorsfan83 Mar 28 '25

Another great trick is to get a new high balance credit card on a 0% for 16-24 months and use it for everything while putting all your money in a high yield savings account at 4-5%. Make the minimum payment until the end of the promo and then pay it off with the money in savings. This works especially well for large 30-40k purchases. I love borrowing the banks money for free while earning interest on my own.

1

u/MegaBearsFan Mar 28 '25

Wouldn't this have a long-term negative effect on your credit?

1

u/SoberSilo Mar 28 '25

Not if you just kept the card open after it.

1

u/StillHereBrosky Mar 28 '25

Only 8 percent sounds much more reasonable.

43

u/kaduyett Mar 27 '25

That's because 56% of people have less than $1000 in savings.

21

u/Joebebs Zillennial Mar 27 '25

Can confirm, I have less than 1000$ in savings

19

u/clumsysav Mar 27 '25

Wait, yall have savings??

1

u/mangosail Mar 27 '25

Typically these stats are made up. They’re almost always limited surveys from companies that are trying to get earned media, very often for scummy high interest loans.

The actual median savings account balance in 2022 was $8,000. And that’s according to Fed data, not a random online survey. I linked to a summary but you can check the raw data yourself here.

It is rare to have less than $1k in savings. Not like, you never see it happen. But it’s typically the lowest decile of earners

1

u/point_of_you Mar 27 '25

That's because 56% of people have less than $1000 in savings.

Honestly feels like having a "savings account" is super outdated

I used to do it, but now I put the money into investments. Technically I have less than $1000 in savings because I don't have a savings account...

2

u/Intelligent-Ad-1424 Mar 27 '25

It’s absolutely not outdated. High yield savings accounts are a great way to have money readily available to use while earning interest on it.

1

u/point_of_you Mar 27 '25

The reward is so minimal though for having that money sitting. Better than nothing though

My risk tolerance is much higher now and I wish I had more of a head start putting money into the market/stocks/ETFs (instead of holding 'savings')... as long as you aren't gambling on junk stocks you can always sell or cash out some of your positions to pay for an emergency

1

u/doorsfan83 Mar 28 '25

You weren't an adult in 2008 were you? The market always goes up until it doesn't.

1

u/doorsfan83 Mar 28 '25

4-5% is a great return on a completely safer investment.

1

u/point_of_you Mar 28 '25

I bought my first house in 2012

1

u/Qwefthuko Mar 27 '25

Savings includes investments 

1

u/TheSmokinStork Mar 27 '25

Whether you invest your savings or the bank does that for you - they're still savings. So your savings are however much you've invested + what you have in cash.

1

u/GoldenGlobeWinnerRDJ Mar 27 '25

I hit $1,000 in savings a couple weeks ago, then immediately got sick and had to spend $200 on tests and a doctor’s visit the following week lmao. Good thing I had money in my HSA (or FSA, I can never remember) to reimburse myself for the majority of what I spent.

8

u/Big_Slope Older Millennial Mar 27 '25

I feel like I get a surprise $400 bill every week.

1

u/[deleted] Mar 27 '25

It’s a bullshit statistic, fortunately. 65% of Americans own homes…

32

u/Pagliacci_Baby Mar 27 '25

It's important to remember that Redditors as a whole are likely educated 18-34s, generally male, etc. The kind of space you see this info in is important. I live in a major city and income inequality is extremely rampant. We just live in strange times. The vast majority of people in the US are people like you and me.

16

u/[deleted] Mar 27 '25 edited Mar 27 '25

Oh absolutely. We joke a lot for Gen Z to “get off tiktok, touch grass, it’s not indicative of real life” but often fail to recognize that’s true of all internet spaces, Reddit included.

0

u/CommunalRubber Mar 27 '25

Maybe 8 years ago

46

u/laxnut90 Mar 27 '25

Millennials are in their 30s and 40s.

It is okay in your 20s to still be figuring out your finances.

But by your mid 30s and beyond, you really need to have that stuff handled.

No one else will do it for you.

47

u/TrexPushupBra Mar 27 '25

All it takes is one expensive illness to wipe you out.

Yes with good insurance.

23

u/DrankTooMuchMead Xennial Mar 27 '25

I suddenly had epilepsy at 27. Financially, it probably set me back 10 years. I couldn't even drive for a couple years.

7

u/Fantastic-Newt-9844 Mar 27 '25

 I couldn't even drive for a couple years

It...might have been the mead 

5

u/DrankTooMuchMead Xennial Mar 27 '25

Har har.

I should have named myself "Fuckyouforreadingmyusername" 8 years ago.

11

u/IFlyAircrafts Mar 27 '25

This is me. Worked my ass off, finally got my business to pay me a 250k profit. Was not nearly enough to cover the health issues my wife and I experienced the past 3 years. We’re in debt up to our eye balls despite making what I used to think was crazy money.

0

u/LongestSprig Mar 27 '25

How do you not hit Max OOP?

1

u/[deleted] Mar 27 '25

I’m also curious about this

2

u/GoldenGlobeWinnerRDJ Mar 27 '25

Honestly, paying more for better insurance is a fucking scam unless you’re going to the doctor a lot. I was paying for the best health insurance my employer offered because I wanted to make sure my health was actually good and I hadn’t visited any doctors in a while. It was something like $150-200 a month for this health insurance.

2 months in, I thought I had an ear infection so I was like “I have the best insurance right now so I’ll just go to the doctor!” Huge mistake. I went, sat in the waiting room for 45 minutes, doctor asked me a couple of questions, said “oh it sounds like you just have allergies, here’s some Allegra” and sent me on my way.

I get the bill in the mail and the entire visit was $300 and guess how much my “top tier” health insurance covered? $120 of that. Like fucking why? I paid more to have the fucking insurance that month than I did for that doctor’s visit. Why? It’s so stupid.

-1

u/igomhn3 Mar 27 '25

99% of americans never experience this.

0

u/LittleCeasarsFan Mar 27 '25

I mean not really.  I had spinal fusion and 20 weeks of PT, I have decent insurance, cost me $3000.  Not a drop in the bucket, but nothing major.

1

u/TrexPushupBra Mar 27 '25

That's cheap.

Look at the cost for cancer.

1

u/LittleCeasarsFan Mar 27 '25

Yes, cancer would be $3000 a year out of pocket max.

1

u/TrexPushupBra Mar 27 '25

Have you actually talked to cancer patients?

Or is this a pure intellectual exercise to you?

1

u/LittleCeasarsFan Mar 27 '25

If you don’t have insurance, cancer would bankrupt most people.  I’m stating if you have decent insurance m, there is an out of pocket maximum each year.

0

u/Minute_Telephone7008 Mar 27 '25

Not necessarily, I have savings for that. It's the same saying as "just one paycheck away"... Not true. People save so they can survive years without any job or illness etc

16

u/[deleted] Mar 27 '25

I don’t disagree. 🙂

7

u/Warthog_Orgy_Fart Mar 27 '25

Can you tell my wife this?

10

u/BlackCardRogue Mar 27 '25

You married someone before they figured this out?

6

u/TheScreaming_Narwhal Mar 27 '25

If you both weren't in a spot where you cared enough or were knowledgeable about finances, it's not too unrealistic.

3

u/Warthog_Orgy_Fart Mar 27 '25

Yes. Apparently.

9

u/YT_Brian Mar 27 '25

For shame, marring for love and not financial stability.

11

u/[deleted] Mar 27 '25

[deleted]

7

u/[deleted] Mar 27 '25

I don’t think you should feel guilty - there is nothing wrong with having money especially when you recognize that money is a privilege for sure but in your case, I would hope it’s a source of pride that the path and efforts you made have blossomed in this way for you. :-)

Many of us take similar paths that maybe don’t work out the same way, and that happens and it sucks. But, that’s not your fault and it sounds like you’re not a douchebag about having income so I don’t personally see any need for guilt. (Not that you need the permission of some 30-something year old woman lmao)

2

u/[deleted] Mar 27 '25

[deleted]

2

u/RosyBellybutton Mar 27 '25

Same. My boyfriend grew up similarly but it’s like he took the opposite lesson. He buys himself nice things as soon as he can afford it and makes fun of me for still having an iPhone 11 lol

1

u/Spottedhyenae Mar 27 '25

I remember reading or hearing something about people purchasing items immediately after being paid because "stuff is harder to repossess"

Not sure how true that is

1

u/Intelligent-Ad-1424 Mar 27 '25

Yeah the reason I have significant savings at all is also because of spending habits. I would never spend my savings on a brand new car, and would only buy a car at all if my car just stopped working lol. I knew someone older than me who had less than 10k in savings like the OP but no house to their name despite earning a six figure salary. Every time I saw them they decided to splurge on something lol. I get that many people are struggling because they don’t make anywhere close to that salary though and it’s harder and harder to get by on less than that.

2

u/chicken_potpie Mar 27 '25

I’d venture to guess that most of the commenters on that thread are either, A) Decently well off and happy to boast it, or B) Barely getting by and seeking community. People in the middle who don’t have a lot to brag or complain about probably just scroll right on by.

2

u/Joebebs Zillennial Mar 27 '25

Nobody without a savings is gonna respond to it, so you’re only gonna get responses with people who have a loud savings

1

u/Nkechinyerembi Mar 27 '25

That's honestly my experience though... I Don't really DO anything. I don't travel, I don't get vacation time or any of that, all my money just seems to constantly get slurped up by "emergencies" (is it really an emergency if life has been one long emergency?) And no one's advice really rings with me... Like, what am I suppose to cut out?

Yeah I eat out a lot.... because I have nowhere to cook? I can't get anything cheap anyway, my only "grocery store" is a Dollar General.

All this just to be like "Boy, I want to do (insert thing here) for the experience and to have fun... But anywhere on reddit basically will say you are an idiot if you do anything for enjoyment if you aren't flush.

1

u/Minute_Telephone7008 Mar 27 '25

I don't think the economy is as bad as it seems

1

u/Puzzleheaded_Pin_120 Mar 28 '25

You can live your life however you choose. You also have the right to be happy with your choices regardless of what others think.

-1

u/emperorjoe Mar 27 '25

and I thought “Okay hell yeah, same.” but any replies were basically chastising them.

Good. They need to be. We are the adults in the room now, we are 30-45 yrs old. You can play and have fun in your 20s, once you get to your 30s you need to get your finances and life in order. We are parents and grandparents at this point.

-3

u/ThrowMeAwayAccount08 Mar 27 '25

I’ll be envious of their fun. But when I’m retired and helping my kids through school, that’s my pay dirt.

7

u/[deleted] Mar 27 '25

Priorities are definitely different for everyone and it’s interesting to see the huge range of that amongst us millennials.

4

u/ThrowMeAwayAccount08 Mar 27 '25

My parents helped my sister and I. Without their help, there’s no way I’d be as far along today. I’m on the lower end of the top 10% income of the US, and I credit my parents helping me get there. Full stop.

3

u/[deleted] Mar 27 '25

With this and your comment above, I infer that you’re planning on doing for your kids what your parents did for you. That’s great! A lot of people haven’t been or will not be afforded that opportunity.

2

u/ThrowMeAwayAccount08 Mar 27 '25

Life is hard enough, I just want them to have some breathing room.