Except someone actually did, and that’s what we’re here to talk about today. It’s hard being financially responsible in your twenties. A lot of us in our first few years of work live paycheck to paycheck, come up against months where we have to eat PB&J for two weeks straight because we were stupid with our money and bought $200 boots we didn’t need, or our car broke down and we had to buy a new muffler, or we hit a lot of birthdays in one month and forgot to put money aside to pay for gifts, blew through too much money on a night out, the list goes on and on. Living paycheck to paycheck doesn’t leave a lot of room for these types of financial life curve balls. Sometimes it’s unavoidable, especially if you’re on a small entry-level salary, but it’s certainly not desirable.
An Elite Daily article titled “If You Have Savings in Your 20’s, You’re Doing it Wrong” has been circulating the internet since yesterday, and is causing quite a stir. I hesitated to even post the link to this article, at the risk of further disseminating what is at best a piece of flagrant clickbait, and at worst, dangerous and misguided financial advice aimed at a generation of people who are still figuring out what the heck finances are. It is riddled with stellar advice (read, sarcasm) such as “don’t save money, make more money” and “We’re taking our time growing up, refusing to be shackled by mortgages and diapers. We’re not trying to live with safety nets; we’re trying to live on the edge.”
My initial response to the article was LOLOL OMG WHAT AN IDIOT, WORST ADVICE EVER. I think I actually typed that exact eloquent phrase to the friend who sent me the link in utter horror. The more I thought about it though, the more concerned I became, and the more compelled I felt to compose a response to this completely absurd article. The Elite Daily has a wide readership. I know some people who read it as their primary work day reading source. The publication has something like 40 million plus readers, most of whom are millennials. And I’m generalizing here, but I would bet that the vast majority of young millennials don’t know what the hell they’re doing when it comes to personal finance. We’re the demographic that is just getting our first salaried jobs, opening our first credit cards, paying back our first loans, learning what 401K’s are, renting our first apartments, thinking about playing with stocks for the first time- it’s a time in our lives where we’re encountering lots of financial firsts. We’re constantly bombarded with contradicting financial advice, and it’s hard to know what’s the right advice to take. It dawned on me that while my reaction to “If You Have Savings in Your 20’s, You’re Doing it Wrong” is “OMG I can’t believe this was even allowed to be published”, some of my peers may on-board it as solid financial advice, and that is damaging, dangerous, and overall NOT OKAY.
Let me break down what’s wrong with this sort of financial advice. First of all, anyone who says you don’t need a safety net, clearly is an idiot. Take it from someone who has been there. Unexpected expenses WILL come up. They just will. Even if you do everything perfectly. Your car could break down. You BFF could get engaged and demand you come to the wedding. You could get a new job, fill out your tax forms correctly, and then have HR screw them up for a whole year before you catch their mistake (not bitter about that still, not at all). If you don’t have savings in the bank for these “what ifs”, unless you have mom and dad to bail you out with no strings attached (which is very possibly what allows the author of that article the ability to be so carefree with her spending), you are in serious trouble. Not being able to pay your bills is a deep, soul-wrenching, anxiety inducing, sleepless nights-type feeling. It’s bad.
Lauren, the article’s author, states, “We don’t have kids. We’ll be renting for the foreseeable future, and we have no problem eating McDonald’s when we’re skint.” I hate to say Lauren, but when a unexpected financial crisis hits, you sometimes discover there is a level below McDonald’s skint. When #taxpocalypse hit me completely unexpectedly, McDonald’s would have been considered a splurge. “Yay, I’ll just eat McDonald’s!” is not the answer when you’re staring at your bank account wondering how on earth you’re going to make it to the end of the month. So no, setting yourself up to have no safety net for when bad things happen, and they will, is NOT a good idea.
Beyond the fact that not having a safety net is a recipe for complete and utter disaster, and I’m literally getting hives just thinking about it, the “spend it all before the next paycheck comes in” mentality also doesn’t leave room for the positive side of saving- saving up for meaningful experiences and things. How can you save up for the big things, like an incredible, life changing trip to a country you’ve never been to, if you don’t leave anything left over at the end of the month? I’m going to Istanbul and Cairo next month and I absolutely cannot wait. I am so excited and so energized by having such a grand adventure to look forward to, and it wouldn’t have been even remotely possible if I didn’t save for it. Yes, I had to skip fancy dinners and nights out to get there, but it will be totally worth it. The author states, “People who are saving in their 20s are people who don’t set their sights high.” I don’t think setting sight on travelling the world, is setting my sights particularly low. And I think it is anything but boring.
Finally, I can’t speak from personal experience because I’m not in the stage in my financial journey where I’m saving for retirement yet (not because I think it’s stupid, but because I haven’t yet figured out how to add it to my budget and not come up short), but saving up so you can quit your job and just chill and have fun when you’re older sounds pretty flipping awesome to me. I know retirement isn’t exactly just “chill and have fun”, but why shouldn’t we aspire to getting out of the rat race as soon as we can? Having to slave away at your job until the age of 70 because you didn’t save at all during the first 10 years of your working life doesn’t seem like a great trade off.
As a traveler and travel blogger, saving, and saving carefully and often, is the only way that I’m able to afford to travel. I follow strict budgets, both in every day life and on the road. I scour the internet for the best deals, and I weigh big purchases in terms of what sort of adventure I’m trading in in exchange for purchasing the material possession. As much as I want to, I don’t chuck all of my money into my travel fund, because I know what happens when an emergency strikes, and you need to tap into an emergency fund. Financial independence, to me, allows freedom, and that happens when you eventually don’t have to live paycheck to paycheck. When you don’t have to stress out about making sure you have enough in your account to cover rent. How do you get there? Saving.
Rant over. Did anyone else read this article and have a burning desire to speak out? Let me know your thoughts!