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Who We Were

Jonathan Clements

MILLIONS OF RETIRED baby boomers struggle financially, and yet they don’t eat avocado toast, don’t have a daily Starbucks habit and didn’t graduate college with a degree in women’s studies.

What’s my point? In the comments section of HumbleDollar, there are two recurring themes—that young adults spend recklessly and that college is of questionable value. I understand these concerns and even share them to some extent. But I’d favor a more nuanced view.

Let me start with four points of agreement. First, I agree that college has become unaffordable for many families and that college pricing is maddeningly opaque. Second, I agree that many school systems fail to instill the basics in their students, forcing colleges to teach remedial math and English—not a great use of tuition dollars. Third, I agree that college isn’t for everybody, and that encouraging teenagers to pursue a trade often makes sense. Finally, I agree that we should encourage 20-somethings to spend less and save more.

But this is where I part ways with some HumbleDollar commenters, and it all begins with a vague recollection of who I was as a teenager and 20-something. Put it this way: There are those of us who recall acting irresponsibly—and then there are those who suffer from amnesia. That leads me to offer two perhaps unpopular opinions.

First, kids need to go away to college—for the sake of all concerned. I raised two children, and also had a hand in raising two stepchildren. College came at just the right time.

It gives teenagers a chance to learn how to fend for themselves—not just the basics like nutrition, personal hygiene and managing money, but also how to balance the demands of academic work and extra-curriculars. This is an ugly process, and it’s best if Mom and Dad don’t watch.

Even the Amish understand this. There’s the tradition of rumspringa, during which the rules are relaxed for Amish teenagers. It isn’t clear how much misbehaving goes on. I suspect it’s far less than depicted in the documentary Devil’s Playground. But I also suspect that, like the rest of us, most Amish parents realize that kids often mature more quickly if they’re left to figure it out for themselves.

College, of course, is meant to be more than an extended summer camp. When we pay six figures for those four years, we’re hoping our kids get a good education. But what does that mean? If your student is studying engineering or architecture, it’s obvious. If it’s history or English, it’s harder to connect what’s learned directly to a future paycheck. But that doesn’t mean going to college isn’t valuable.

We shouldn’t throw up our hands in horror just because students never use the knowledge they acquire during their undergraduate days. Instead, what matters is learning to work effectively and think critically. In that regard, writing papers on Weberian sociology and Wittgensteinian philosophy may not seem like preparation for the real world. But that’s how I spent my college years.

Second, today’s high spending among young adults is a sign not of excess, but of success. I recall spending virtually every dollar I earned in my teens and early 20s. All that changed when I married at age 24 and became a father at 25, and had no choice but to become super-careful about money. My hunch: Most HumbleDollar readers were also financially wayward youths.

Today, I’m a fierce advocate of saving diligently early in life, so you quickly buy yourself a sense of financial security and put yourself on the fast track to financial independence. But I’m also a realist. It takes time for young adults to develop a long-term financial view—and, in the meantime, we shouldn’t be surprised if they spend more than we did at their age.

After all, per-capita GDP climbs over time. It’s up an inflation-adjusted 49% over the past three decades. We should expect each successive generation to live a little more lavishly. This is something to celebrate, rather than clucking with disapproval at the folly of youth.

I never dreamed of taking a gap year before or after college. I’ve never leased a car. In fact, I’ve only once bought a new vehicle, and it was a Geo Metro, at the time the second-cheapest car on the market. I clean my house myself, rather than paying someone. If I order food for takeout, I almost always pick it up myself, rather than have somebody deliver to my door. I almost never get Starbucks. I like avocado toast—but I make it myself.

This is not how today’s young adults think. But who’s being foolish? I’m happy with my spending choices. I’m not really comfortable with the idea that somebody’s going to clean up my mess or bring food to my door. But I also realize that I’m not taking full advantage of the bounty offered by today’s economy—and that those who are younger may be striking a better balance than me.

Jonathan Clements is the founder and editor of HumbleDollar. Follow him on Twitter @ClementsMoney and on Facebook, and check out his earlier articles.

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Tooney
Tooney
6 months ago

Jonathan:
Time for you to buy a new car.

Take a test drive, like I did recently in an all electric Porsche Taycan. Not only instant-torque, tremendous acceleration, with 0 to 60 mph in 3 seconds “launch mode”, but as an electric vehicle it is “green”…..

Lot safer than that bicycle you owned. 😛

macropundit
macropundit
6 months ago

>> Instead, what matters is learning to work effectively and think critically.

I studied philosophy too. But if you’ll permit it I’d like to suggest that essentially repeating the common phrase that college teaches “critical thinking” is one thing, and what occurs in writing papers on Weberian sociology and Wittgensteinian philosophy is another. I think the type of critical thinking of the sort you did is of a classic type that was simply called becoming educated. Learning to think better through practice and learning to think as if for the 1st time are very different things. It seems pretty clear to me the latter is what is meant by the now popular phrase “critical thinking”. A cynic might call it re-education.

Peter Blanchette
Peter Blanchette
7 months ago

The top 2 reasons for bankruptcies in the US are from medical expenses and job loss. The 3rd reason is what you are talking about in your column. I would add a minimum wage of $7.50/hr in much of the US and a drop in availability of pensions for Boomers. That tends to stunt the ability of people to live now and in their retirement years. It is far from strictly a matter of the spendthrift tendencies of those darn Boomers. That increase in GDP you talk about is very skewed to those at the top by the way.

Ronald Wayne
Ronald Wayne
7 months ago

Those first two reasons resonate with me. One year, back when I was the main breadwinner in my family with a wife and two minor children, I used up $5,000 in a flexible medical spending account by June of that year. And that was with medical insurance.

Ronald Wayne
Ronald Wayne
7 months ago

Thanks for this nuanced perspective. For many boomers, college wasn’t possible or even desired if they lived in industrial cities where union factory work paid a decent living, way more than teachers or journalists. Some were lucky enough to have held onto such jobs as corporations moved jobs elsewhere and now have pensions. Many were not, and retraining hasn’t worked for them. I’ve also come to realize many people whose families have been in America for a few generations created generational wealth and inheritances that ease the bumps of misfortune for their heirs. I think our society is way too quick to blame the poor for being poor, whether they’re seniors or younger.

IAD
IAD
7 months ago

Thank you!! You are spot on!

Scrooge_McDuck88
Scrooge_McDuck88
7 months ago

I have a standing offer to my children… if they want to skip college and start a business I will seed them with 250K. The basic skills to succeed in business can be acquired at night school, and IMHO consist of reading a balance sheet, and basic knowledge of excel. Everything else can be learned by doing and through mentorship. I have been invited to speak to several MBA classes about Entrepreneurship. It’s amazing that so many kids with an undergrad in business and 2nd yr MBA students ask the most elementary questions about starting a business.

Mark Eckman
Mark Eckman
7 months ago

“It’s amazing how much you need to learn to understand how little you need to know.” – Jason Zweig

The education system as a whole has been neglected. We have some excellent schools, but many public schools are warehouses. When graduates move on to college, the result is remedial needs.

Donny Hrubes
Donny Hrubes
7 months ago

This is so cool!
First, thank you John for creating this great forum. It’s a wonderful way to acquire different points of education on the better ways of finance and, indeed life. I have gotten a lot of insight from articles from you and Mr. Quinn and Mr. Conner, my favorites! I’ve sent some articles to my own kids and others to hopefully share learning.

I totally agree kids are best let go to be in the ‘real’ world as they become more equipped to cope. I fee, like most here that the knowledge to make good decisions comes from early childhood parental education.
I grew up on a small farm in Montana learning the value of work. Our family had no margin for extravagance. I was the third boy and only got hand me down clothes times 2. There were patches over patches but I didn’t suffer one bit.
I left Glendive in May 1969 to go to a tech school in Denver after high school. I did get paid a small amount after each harvest and I had simply deposited over time in my savings account and that was used to start my ‘grow up’ phase of life.
Imagine a farm boy in the big, scary ol city on his own 600 miles from home.
Well, getting away from that rural culture and seeing so many new possibilities was very good for me. Not thinking of the possibility of maybe failing this new experience, I changed my thinking and that made all the difference.

Today I still do have attachments to my frugal roots. I also have purchased only one brand new car ever and currently have my ‘not from this millennium’ vehicle. I do NOT eat avocado toast however, I just made a $2,500 investment in a startup company and even if that goes away, just one of my next monthly net pension checks will be greater than that one expenditure.
That’s my extravagance of choice.

I’m making another donation for Humble$ NOW! 😉
Won’t you join me?

Jonathan Clements
Admin
Jonathan Clements
7 months ago
Reply to  Donny Hrubes

Thanks for the monthly donation — and best wishes for the holiday season!

Kari Lorch
Kari Lorch
7 months ago

Great article. Kids also seem to learn from their upbringing, my kids are frugal because that’s what we modeled. Also re: college I am always amazed at how few parents save via 529, starting early and just putting in small amounts over time it really adds up and then college costs are more manageable. Not that I disagree with the fact that it’s too expensive but that’s a system issue. I’m amazed in our area with all the 2 income, large home, extravagant vacation taking, fancy car, lotsa toys neighborhood that when it comes to college it’s woe is me! It’s easy to save via a 529.

SanLouisKid
SanLouisKid
7 months ago

My parents helped me obtain a summer job that included running a jackhammer, working hot tar on roofs, installing sewer pipes, and mixing concrete by hand. This was their subtle way of telling me, “You need to think seriously about going to college.” I did (think seriously and go).

An
An
7 months ago

Strange how we boomers sound a lot like the older generation did back when we were becoming adults. Aren’t we the parents/grandparents of the current generation of adults? We need to take responsibility for our part. The one thing I admire most about my deceased mother was her approach to life – don’t complain about it, act on a solution to it.

Luckless Pedestrian
Luckless Pedestrian
7 months ago

On the subject of college, I agree with much of what Jonathan has written here, especially about the need for young people to go away to college and the philistine notion that one should only study subjects that are directly related to some job in the “real world.”

Like Jonathan, I too read Weber and Wittgenstein as an undergraduate. Also Hobbes, Locke, Rousseau, Hume, Kierkegaard, Marx, Nietzsche, Plato, Aristotle et al. Decades later, having retired from my “real world” job, it’s obvious to me that studying the works of these Enlightenment and Classical thinkers constituted by far the most important and valuable part of my college experience.

What Jonathan neglects to mention is that these works are unlikely to be taught in a typical humanities curriculum today, and if they are, only as artifacts of patriarchy, colonialism, and racism. The dogmatism and intolerance that permeate the current campus climate, especially in the humanities and social sciences, has been amply documented by liberal scholars such as Stephen Pinker, Jonathan Haidt, Helen Pluckrose, James Lindsay, and others. It’s impossible to overstate the scale and magnitude of this problem. Every parent of a prospective college student should read Lukianoff & Haidt’s The Coddling of the American Mind.

I find it interesting that of all the many articles and comments on college that I’ve read on this site, none even so much as mention politicized curricula and rigid ideological conformism as reasons for rethinking the value of a modern university education.

parkslope
parkslope
7 months ago

I think you go too far in your criticism of today’s typical humanities curriculum. While too many colleges are bending over backward to highlight their commitment to diversity I doubt you can find any who have eliminated any of their courses in the classics in order to make room for “woke” courses. It is also the case that while schools now offer minors in xxxstudies, few offer majors, and only a fraction of 1% graduate with degrees in those areas in the schools that do. The truth is that STEM and business are as popular as ever.

Mik Cajon
Mik Cajon
7 months ago

Nailed it…thank you!

Last edited 7 months ago by Mik Cajon
Chazooo
Chazooo
7 months ago

I started college in 1962 and there were non-credit mandatory Remedial English and Remedial Math classes for those kids the tests indicated would not make it in the required English and Math 101.
My point being apparently the public schools were not doing a good job back in the Good Ole Days, either.

Last edited 7 months ago by Chazooo
corrupt
corrupt
7 months ago
Reply to  Chazooo

While there may have been some that required remedial instruction back then, most who would have needed it weren’t attending college. Today, pretty much any under achiever can and does.

Bernardo Pace
Bernardo Pace
7 months ago

The suspense is killing us: we’re all waiting for your avocado toast recipe.

steveark
steveark
7 months ago

I think the more things change the more they are the same. The reason so many Boomers struggle in retirement is because of the bad decisions they made in their younger years, and young people continue to make those same decisions that will put their retirements at risk. Most of my friends did not make those bad decisions, they majored in useful degrees, rose to the top of their companies, stayed married, worked out and stayed fit and are very happy in retiremen. They have no financial concerns whatsoever other than having a good estate plan that doesn’t mess up their kids. Of course that’s most, there are also many who had bad fortune wreak havoc upon their finances that would have prevented any of us from succeeding.

Mik Cajon
Mik Cajon
7 months ago

Priceless insight for all.

R Quinn
R Quinn
7 months ago

I’m with you on college, but I do feel we need to rethink the entire system and process.

But I’m thinking the young adults have muddled the definitions of wants, needs, necessities. As I have said many times. Save adequately for retirement and emergencies first, never pay a penny in credit card interest … and then spend whatever you like on whatever ever you like.

I fear too many younger people and middle age as well reverse the priorities with societal impact yet to be determined.

Mark Royer
Mark Royer
7 months ago

I have to admit I mirror your lifestyle choices rather closely, except for the avocado on toast. I save those for guacamole. On a rare cruise we have no interest in paying extra for the fancy restaurants onboard. The regular dining rooms are fine.

Our three daughters all graduated college debt free, thanks to Mom and Dad, but with the stipulation that none majored in anything XXXX Studies. All three are now productive members of society and we are funding 529s for each of our grandchildren to hopefully repeat and pass it on.

K Lacey
K Lacey
7 months ago

This is am important topic, but it has no one answer. Yes, both parents and kids need a break from each other after high school, and kids need space and freedom to grow on their own. College is not the only option. In our day the military had a way of teaching 17 year olds. Meals and clothes are free, and the kids will learn much not taught at home. Getting a conventional job or jobs for 2 or 3 years can also help mature the youngsters. And in my opinion money skills should have been taught by parents from 10 to 17 years of age for each child.

Jeff
Jeff
7 months ago
Reply to  K Lacey

You are spot on. One thing though , nobody taught my parents or my grandparents how to manage life and money. Which leaves me to break the chain with my kids. Trying to get them to listen is not easy.

John Goodell
John Goodell
7 months ago

Get off my lawn!

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