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Counting My Pennies

The “Plight” of the Twenty-Somethings

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A recent article on Slate.com discussed how twenty-somethings are dealing with the recession.  I particularly like the title: “The Real World Threw Up All Over Us.”  The article does, at times, seem a bit whiny on the part of the twenty-somethings interviewed, but the author is careful to say that the e-mails she received were anything but whiny.  They just showed how uncertain people are feeling.
I think a lot of us understand.  As the article points out, we “set up [our] lives based on assumptions that suddenly no longer apply.”  And we don’t know what the new rules are.  A lot of us grew up with the belief that we should go to college, get a good education, and if we worked hard, we would get good jobs and by our late twenties, be buying homes and starting families.  And while that still occurs, I think everyone feels a bit more economic pressure.
One big problem, I think, is student loans.  I was always encouraged to aim high and to get the best education possible.  At eighteen, do you really understand what student loans mean?  Sure, I was a very smart eighteen-year-old, but I don’t know that I could conceptualize the idea of paying off loans for twenty years or more.  I just wanted to go to a good school where I could get a good education and have a great time doing it.   Plus there’s always the underlying belief that if you do well enough, you’ll get a great job and pay off those loans in no time flat.
Clearly, that’s not what’s happening.  And student loans are nothing new.  My mom still talks about the payment book from my dad’s college tuition and how she wrote that check every month for years until the loans were paid off.  But even with inflation, he wasn’t faced with the numbers that students are faced with today. I am astonished to see that some interest rates on student loans are now well over 10%. Students need to strongly consider the risk-reward of taking out these kinds of loans to pay for their education and how difficult repayment will be. Though you may not be able to get as good of a job with a high school degree, you won’t have any student debt to pay off. It is no longer automatically a smarter decision to attend college, you now have to really consider the risk you are taking on. It is smart to take a look at the average salary of a graduate from the schools your are considering. 
Sure, some of that is their fault.  Before law school, I distinctly remember a lawyer I worked with telling me “Be sure to take out extra loan money so you can go on a sweet Spring Break trip.  You can just pay it off later.  It’s totally worth it.”  I didn’t listen to that particular advice, and I can’t say that I regret that.
Given my recent work highs and lows, one quote in the article really rang true for me.  A woman taked about waiting for a promised promotion and not wanting to ask for more and be more vulnerable to a layoff, yet having always thought of herself as someone who would value her worth and demand fair pay.  It’s definitely a struggle.  No one wants to be undervalued at work, especially when others around you are compensated higher than you for equal work.  But sometimes, being the lower paid employee doing excellent work makes your position safer in the company.
At the same time, there are some positives.  The article speaks of learning to live more simply.  While it may seem tough to not have a lot of disposable income, if you can learn to live on less and be happy, then when you do find yourself making more money, maybe you won’t feel the need to go spend it immediately.  You’ll learn to save and spend your money on what’s most important.  My grandparents still live a very simple day-to-day life, doing everything they can to save a few pennies (rinsing foil and plastic bags, wearing clothing til it literally falls apart, then repairing it), but they’re financially very well off, probably due to this way of life.  Not that they’re cheapskates.  As I’ve discussed here before, they go on nice vacations and go out to dinner and to the theater where they splurge on the good seats.  But that’s what’s important to them.
I wonder if perhaps this struggle is a good thing.  I’m on the cusp between Generation X and Generation Y, but the general impression is that people currently in their twenties were all born with silver spoons in their mouths, even if our parents couldn’t necessarily afford it.  We never had to struggle for much of anything.  I went to a presentation by a eighty-something feminist historian who commented that young people, people under twenty-five (she looked very pointedly at me, though I passed that mark years ago), don’t know what it means to struggle.  They have been given everything they have ever wanted and they are weak because they don’t know what it’s like to have to fight to get what you want.  While I think that’s an overgeneralization, the idea that having to struggle and work for something makes you stronger and makes you value it even more.  So perhaps the good part to this economic struggle is that it reminds us that life isn’t always easy and can’t be planned, but hard work and determination pay off in the end.  And that building a substantial savings account feels pretty darn good.

Comments

  2. Karen says

    This is so true. I agree with you that we’ve had it too easy (I’m 24). I also agree that a LOT of 20-somethings are in trouble with student loans because they abused them.

    But I don’t think the lenders should get off the hook here. The student loan system is pretty screwed up. Private student loan companies are lending hundreds of thousands of dollars to kids who are barely 18 on the promise that they’ll be able to afford monthly payments that sometimes reach the thousands in 5 years. The problem is, a lot of students made those promises when the economy was growing, and now that it’s shrinking it’s a lot harder to meet them than expected. I didn’t borrow hundreds of thousands, but between my husband and me we have a good chunk of loan debt.

    The problem with the kids who make these mistakes with private lenders is that the lenders have nothing to lose. Private lenders guaranteed to get paid, and they can charge whatever interest they want. I’m all for guaranteeing federal loans, but there are limits on what students can borrow and what interest rates they can be charged. The same isn’t true for private loans, and yet the lenders don’t have to take on any risk. If private lenders had to take risks to loan money to students, you better believe they’d no longer give them a blank check to borrow hundreds of thousands of dollars to spend on electronics and vacations.

    Thanks for this great post! As you can see, it’s a topic I feel strongly about! 🙂

  3. asgreen says

    I am at the same point you are, on the cusp on both generations and I agree. One of the biggest issues we have to face that our parents generation didn’t is the overwhelming force of student loans. I also agree that having to struggle can help us, I only worry that if nothing is done about student loans, as a generation, Y could be in trouble.

  4. Sandy says

    Student loans are a hell of a thing. You start your life as an adult with a ton of debt and it take YEARS to get rid of it. Trust me, I know. student loans make up almost half of my total debt and it’s just crushing. Since I was amongst the first to attend college in my family I didn’t know better. I’m making sure that I educate my younger cousins about college loans though.

  5. tom says

    Well yes we certainly do not know what struggling really is.

    Furthermore, we as a generation are more lazy, we are living at home longer and longer and its not for good reasons either. We are racking up debt and living of others.

    I am 24 and taking responsibility now by paying for rent, utilities voluntarily to my parents.

    Also, this is also partly to blame parents of today because they want their kids to have a better life but wheres the balance?

    They put themselves in debt and struggle and give us everything or at least enough. Yet we don’t appreciate it, and don’t learn anything from it.

  6. Slinky says

    What’s really strange for me when I come across these articles is that I can’t relate to them at all, even though I’m considered gen Y. I wasn’t born with the proverbial silver spoon in my mouth. I always think these people sound whiny.

    “life isn’t always easy and can’t be planned, but hard work and determination pay off in the end”

    So true! I learned this lesson a long time ago. I’d have to add that life isn’t fair either!

    “young people, people under twenty-five (she looked very pointedly at me, though I passed that mark years ago), don’t know what it means to struggle. They have been given everything they have ever wanted and they are weak because they don’t know what it’s like to have to fight to get what you want.”

    I think I would have either punched this lady or walked out. Without the pointed look, it might have been tolerable, but what a rude thing to do! I may be gen Y, but I have fought tooth and nail for everything I have.

    Sure, it kind of sucks to be graduating college right now, and things look a little grim, but in a few years, it will (once again) be a completely different world. Whining and complaining doesn’t change anything. The only thing you can do is work with what you have and go from there. Life never goes according to plan, so you might as well get used to it now.

    (Also, what’s with all the complaining about student loans? Sure they suck, but you signed the papers.)

  7. Red says

    Did you find the tone about student loans odd in this article? I mean, sure, our generation is graduating with more in student loans, but unless you’re going to grad school/law school/etc., you’re not graduating with hundreds of thousands in loans. So, if you’re like the girl quoted in the story and you have $22,000 in student loans, I don’t think that’s an unreasonable amount to owe for school. She’s not able to pay it because of her location – DC, which has a much higher cost of living than other areas. Sometimes it irks me that people complain about debt they’re straddled with while they live in areas that are obviously too expensive. In Knoxville, $22,000 in student loans could be repaid in a year, and that’s on an administrative assistant’s salary.

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