In the aftermath of the Great Recession, Americans—feeling on edge and overly cautious, coupled with an inability to take out loans to buy houses and cars due to tightened lending practices by bailed out banks—began to save. Moody’s, which provides economic related data and research shows that more Americans began saving as a whole since the financial crisis, but if you break down the savings data into demographics, you’ll find stark differences in who’s actually doing the saving:
• Americans 55 and older have a savings rate of 13 percent • Those ages 45 to 54 have a savings rate of 6 percent • Gen X-ers ages 35 to 44 have a savings rate of 3 percent • Millennials. Those under 35 have a savings rate of negative 2 percent.
Negative 2 percent!
Yes, according to Moody’s and The Wall Street Journal, young Americans as a whole are burning through their earnings and going deeper into debt.
In the Times’s “Booming” section (about baby boomers) Jim Sollisch has a really sweet essay about his son Max, a 25-year-old singer/songwriter signed to an indie label, who although doesn’t make a ton of money, is living a life he seems to love. Sollisch says that we often measure success by how much money we make but, of course, there’s much more to it than that:
What my friends don’t know is how to measure any of this on the only scale most of us have. You know, the one the I.R.S. uses. And to be honest, I’m not sure how to answer the question either. How successful is Max’s music career? What is a tattoo on the forearm of a 20-something in a medium-size Midwestern state worth? The Eskimos have all those words for snow, and it seems the only language we have for expressing success is numeric. It may be a universal language, but it’s an impoverished one. Maybe we need a word for “never having to sit in a meeting where someone reads long power point slides out loud.” Maybe we should have an expression that captures the level of success you’ve achieved when you do exactly what you love every day.
Max gets up when he likes and does what he loves. He avoids most of the things that most of us numerically successful people complain about all the time: racing from one unreasonable deadline to the next, sitting in unproductive meetings and watching simple things made complicated by committees. And he doesn’t want for much, largely because he’s smart enough to know that the only way to be rich is to want little. He takes no money from his parents. If he doesn’t make enough from a particular tour to cover the next few months, he gets jobs substitute teaching. Somehow he manages to save a little money.
Sollisch still worries what his son will do if his music career doesn’t work out (because dads worry about their children), but when he looks at his son, he believes that Max’s success is “off the charts.”
With the zeal of a motivational speaker, Behnke tells her clients they can buy in the District at a cost comparable to the pricey rents here if they take in roommates to help make the mortgage. Twenty-five-to-34-year-olds in the District might earn a median salary of $44,680 (nationally, the median income for millennials in metropolitan areas is $27,025). But rents in neighborhoods such as Columbia Heights, Adams Morgan and Logan Circle average $2,000 per bedroom — far above the generally recommended income-to-expense ratio of 30 percent. Why not pay yourself rather than a landlord, Behnke reasons.
Yet after a day of showings, the 29-year-old will trek up 11th Street NW to a Columbia Heights rowhouse she shares with three friends. With the city’s median home price at $460,000, the agent who sells the Washington dream is a renter.
This weekend’s Washington Post Magazine is all about millennials and though I generally can’t bring myself to read pieces about the youngs these days, I just couldn’t help myself. It’s not terrible? I did find the story about the millennial real estate agent trying to convince her peers to buy houses and then rent out the rooms so they can actually afford to live in them a little batty. Also, Georgetown is apparently trying to be cool with the young crowd again (what, was it not cool when I worked in that neighborhood nine years ago and went to piano-sing-alongs at Mr. Smiths?).