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Sep 21, 2014

You Don’t Have To Be Rich In Your 20s: A Pro-Millennial Read I Can't Get Behind

For college graduation my parents gave me a Roth IRA and the book The Defining Decade: Why Your Twenties Matter-And How to Make the Most of Them Now. While the gift felt underwhelming and slightly preachy, it made a point. It was time to start taking my life seriously and in my own hands.

I think we've all seen the articles about how messed up we are as Millennials; that we were given too many participation trophies and that we can't hold down our jobs. I usually roll my eyes. We are so not like that and I so do not need a participation trophy! 

Recently though, the article "You Don’t Have To Be Rich In Your 20s: How Much Money You Should Actually Be Making" from Elite Daily hit my radar. Oh. My. Gosh. This is everything that is indeed wrong with Millennial culture.

In the article, Lauren Martin, states "In your twenties and thirties, it’s not about fancy clothes and dinners. It’s about roughing it to get to that concert and swindling your way into shots at the bar. We’re not supposed to be making a lot of money because we don’t need a lot." She then goes on to state activities and items that we don't need a lot of money for.

Here are a few:
"You should be making enough to go shopping but return everything you buy because you really don’t need new clothes."

"You should be making enough to smoke weed but worry about where your next eighth will come from."
"You should be making enough to buy yourself some new shoes, but only because they’re for a once-in-a-lifetime date."
While I like the heart behind Lauren's arguments, that there is more to life than money and that we must enjoy our 20's, there are a few key realities of life that aren't discussed.

According to Business Insider, 2/3 of lifetime wage growth happens in the first decade of one's career. I spent the first year and a half after college in a job where my work life balance was far from perfect. I missed nights at the bar, days at the beach, and a girls weekend in Whistler (obviously, I'm not bitter about the last one at all). It wasn't always the fun 20's in Lauren's article, but it taught me that there will be times when we must work more than we play.

I should note that I don't have as much as I should in my savings account and I don't believe in choosing a job just for the salary, but I do believe that there is an issue with thinking the way outlined in You Don’t Have To Be Rich In Your 20s. There will come a time when #YOLO-ing on the reg is going to catch up to you.

After reading the article, here are the other things that we should be spending money on, saving for, and working towards in our twenties.

A House and Kids
CNN Money estimates that the average cost to raise a kid is $241,080. This is not something I have any interest in doing in my 20's, but it doesn't stop me from thinking about it and working towards being able to afford that one day. Add in the fact that I would like to raise my kids in a house and in a good neighborhood with a solid backyard, and suddenly that cost just went up. I will never be able to afford that in my 30's unless I continue to advance my career now.

Retirement
This Elite Daily article should really be You Should Be Rich In Your 60s: How Much Money You Should Actually Be Saving. Fidelity estimates that you need 8x your ending salary to help increase the odds that you won’t outlive your savings... that's a lot of money. Not to mention that is just a base number, I want to be able to travel and enjoy retired life.

Your retirement savings in your 20's matter. Consider this scenario:
If you begin saving for retirement at 25, putting away $2,000 a year for just 40 years, you'll have around $560,000, assuming earnings grow at 8 percent annually. Now, let's say you wait until you're 35 to start saving. You put away the same $2,000 a year, but for three decades instead, and earnings grow at 8 percent a year. When you're 65 you'll wind up with around $245,000.
A Last Minute Trip
I would like to say that I'm talking about a last minute trip to Mexico with some friends (and on occasion that type of splurge may happen), but you need to have enough money for a trip that you don't want to take. The ones that are unexpected and saddening. You should never miss the occasion to say a goodbye because you can't afford it. I had to buy a $800 flight to New York on a days notice and I am so thankful I was able to. You never know what will happen in life and these types of trips you should always be saving for.

Health Care
Last year I went to the ER for the first time in my adult life and I was blown away. I got the bill and couldn't believe that was the price after insurance. Your health is expensive, but it's pretty much the most important thing you have.

And...the number one thing I don't agree with in this article:
"You should be making enough to eat, but never feel completely full."
Screw that, have a sandwich, add avocado, and eat until your heart is content!

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