Missing the Point

Richard Quinn

IN EARLY MAY, I WROTE about 16 ways that people waste money on everything from tattoos to shoes to children’s toys. That blog was subsequently posted on MarketWatchwhere it collected almost 800 comments, most positive, but many not so much.

I was called out of touch, accused of having an entitlement mentality, talking down to people, privileged and more. I had clearly touched a nerve. Some commenters went into great detail about how difficult their lives were and how there was no money to waste. Others said they worked hard and deserved a vacation. I never said not to take a vacation, just not to go into debt while doing so. Is that unreasonable? One woman took me to task, claiming her children deserved toys. I had noted that U.S. parents, on average, spend $6,500 on toys during a child’s upbringing. Doesn’t that seem even a little excessive?

In short, detailing the ways money is wasted got people’s attention. But many seemed to miss the point—that it’s crucial to live within your means, and that necessitates spending prudently, so you have some savings for financial emergencies and long-term goals.

It’s now clear to me that the way people look at money varies greatly among generations. One commenter said I had a lot of nerve telling people how to spend their money. Hey, I don’t want to dictate how anybody uses his or her money—but I do believe you need to find a way to spend less than your entire paycheck.

In any case, I doubt many millennials would be happy following my example. I’m cheap. But I’m also patient, which means that, at age 75, I’ve reached every financial goal I set when I was 18. Seriously, it’s in my high school yearbook.

The way I see it, younger generations don’t have the same patience. One survey found millennials expected to receive a raise within one year of being on the job. A friend who does hiring for a large financial institution says many of the prospects give off the impression that they’re doing the company a favor by applying for a job, even if they’re just out of college.

Financial prudence isn’t just for the wealthy. In fact, they’re the ones who need it least. And yet my biggest critics seemed to be of average means. They were struggling financially but failed to make the connection between their struggles and their spending. If you can’t convince folks that spending on little things like tattoos, designer coffee and toys all add up, there may be little hope for changing their ways. That raises an important question for society: If we have younger generations who see today’s spending as their top priority, who will support them during their retirement years—or will the whole notion of retirement disappear by necessity?

Richard Quinn blogs at Before retiring in 2010, Dick was a compensation and benefits executive. His previous articles include An Old Man’s GripesMoney Pit and Crying Poverty. Follow Dick on Twitter @QuinnsComments.

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