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My wife Suzie has been organising a hen party for our daughter, nothing spectacular, just a group of girls heading into the big smoke for a candle-making course, followed by dinner and a cocktail bar. Because there were quite a few people attending, all three venues required small deposits, which my wife happily paid. All told, the combined deposit came to around $100 per person.
Most of the group are around our daughter’s age: very late twenties through to mid-thirties. When my wife posted in the hen WhatsApp group to say she’d paid the deposits and to share her payment details, the replies came flooding in, almost without exception, all saying the same thing: they’d need to wait until payday to pay her back.
This surprised me. Most of these young adults have well-paying professional jobs and are part of double-income households with nice homes, nice cars, and a taste for dressing well. On the surface, at least, a $100 deposit shouldn’t be something that can’t be managed before payday.
It’s a good reminder that what you see on the surface masks the stress and difficulties a lot of young professionals face. Financial life can be difficult, even when you face the world in all your finery.
Behind those well-appointed front doors and polished social media feeds, the financial math most likely looks vastly different. The nice car is often leased, the stylish wardrobe funded by buy-now-pay-later schemes, and the beautiful home carries a mortgage that swallows an eye-watering percentage of two solid incomes. When every dollar is pre-committed to maintaining the standard of living expected, there is most likely shockingly little margin left for the unexpected, even a routine $100 deposit.
Watching the messages trickle into that group chat was a reality check. It served as a humble reminder that prosperity is rarely as simple as it looks from the outside. Underneath the fine clothes, the nice cars, and the carefully curated lives, many young people are treading water, trying to keep their heads above the tide, and hoping no one notices how hard they’re kicking underneath.
I’m maybe a bit naive, but their professional lifestyles are not what I envision when I think of people living paycheck to paycheck. My mental image, traditionally anchored to low-wage or service-industry struggles, definitely needs an update for the 21st century.
Mark, I find this fascinating. Like you, when I hear “living paycheck to paycheck,” my first thought is someone struggling on a low income, not a professional couple with two good salaries.
It’s also a reminder that income and financial security aren’t the same thing. You can earn a very good living and still have little financial breathing room if nearly every dollar is already committed. Perhaps the real measure of financial well-being isn’t what we earn or what we own, but how much margin we’ve managed to create between the two.
The social-media-psychology experiment has been a bust IMHO ;). It has wreaked havoc on too many Millennials, Gen Xers and Gen Zers – mentally and financially. Thankfully, my boys and wives seem to have a good handle on things.
Thanks Mark. I had a slightly different take. If I go out for some form of entertainment, I would usually expect the whole event to be less than $100. But when just the deposit is $100, that’s well out of my league!
Greg, I hear you! I’m much the same. It seems like the prepaid cocktail night is the main culprit behind the hen party cost. I love taking my daughters out and spending time with them, but I have a hard time getting past the price when they order cocktails—most places charge around $25 a pop!
Thanks for sharing, that is quite amazing, telling me most young people are living paycheck to paycheck, or hoping someone else will pay.
It took me 2.5 years after college graduation, with a decent income at the time, to begin to spend less than I made. My entire life up until that time I spent everything. I never had much, so out the door it went. But once I had a nice car in the driveway, a nice apartment amply furnished, with my pay increasing, I began to pay myself first, so to speak, and invest and save. I suppose I had to get to my level of “enough” to begin to save. Some people never seem to get enough. The hedonic treadmill will wear you out if you can’t get off.
Patrick, 2.5 years after graduation, that’s impressive. Although my memory is a bit hazy, it sure took me a bit longer to be cash positive.
I have two children. One who makes a lot more than the other. Whenever we front them for something, and require reimbursement, the one who earns 3x as much as the other takes 3x as much time to pay us back. I can assure you, the delay is not due any liquidity issues.
The other child, the one who earns much less, routinely pays at their first opportunity.
We make assumptions about situations that aren’t always based in fact.
John, I’m slightly jealous, at least you get paid back.
A few years ago, one of my daughters moved into her first home, and we offered to cover the big-ticket appliances as a housewarming gift.
Then we went couch shopping with her. She fell in love with a leather lounge suite so expensive it came with motorised everything — recliners, headrests, probably a built-in espresso machine for all I know. When I saw her about to sign up for retailer finance, I stepped in and said, “Don’t be silly, we’ll cover it — just pay us back whenever.”
That was three years ago. We’re still waiting for instalment number one.
I learned you have to be clear. For these kinds of loans you need to discuss what the expectations are, like $500 a month, and I always add, at least some payment. My belief is your child thought you meant another house warming gift! My take.
William, honestly, I don’t mind. My daughters will inherit our wealth eventually anyway, so occasionally front-loading part of that inheritance isn’t a big deal. Plus, I get the added satisfaction of actually using the furniture myself and enjoying its quality.
When we were young parents we would be in the same predicament, but this was because we paid ourselves first via 401K contributions, so cash was tight. We were essentially living pay check to pay check, but because of our savings habits.
Amen, that worked out great for us. Now at 80, our RMD’s provide us all the extra $’s needed to offer large gifts or vacations.
Haha Mark,
Read today’s Jonathan’s Parting Thoughts: No 7 posting. He is commenting on your post from yesterday. Exquisite timing by Jonathan as per usual.
David, I read that over coffee this morning and that was my very thought!
That was my thought as well.
Maybe they are being fiscally responsible by not leaning on CC debt to fund a social obligation 😉
Lifestyle can trap people at any age. I suspect there are plenty of people who are doing fine in progressing in life but don’t have the cashflow at particular times of the month to prepay cash. Ultimately they need a promotion or a job move to get cushion. And a hen night would be a poor reason to tap an emergency fund.
Back in my late 20s or early 30s, sure, I could’ve scraped together $50 for a night out. But I think my situation was just… different. Our car was pushing 15 years old, and our house was a fixer-upper that I was, very slowly and with questionable skill, fixing up myself. Meanwhile, my daughter’s friends are rolling up in cars that are basically new, moving into homes that were immaculate the day they got the keys.
I’m not saying my way was better — plenty of it was just what I could afford, not some noble choice. But it does seem like the baseline expectation has shifted. “Normal” costs a lot more than it used to.
Maybe the CC just for the other stuff and fine clothes 🤑
Maybe they aren’t carrying CC debt but just live close to budget because they actually have prepared one and a future social event isn’t in this month’s budget.
OK it’s likely that some of them at least are overextending and at least carrying CC debt month to month. But it remains feasible that CC is just used for short term liquidity and is paid off next payday without having surplus cash to prepay other things.
Not having cash to prepay a non-essential frivolity like a hen night is not the same as being fiscally irresponsible. Yes there is a high chance that they lack liquidity because of other frivolities but it’s not certain.
The real test is whether they let such things burden them into family years and then building for their own retirement. Some will escape, some won’t. Often it’s down to choice of partner, avoiding divorce etc.
You don’t want my comment on this Mark and I don’t want the criticism if I did comment. 😎
It is OK to say it. Some will learn from your comments. We always have the right to disagree.
I hear you, Dick, and reading between the lines gets your point across loud and clear! Still, it’s a sad day when personal opinion has to be muffled just to comply with a consensus. Disagreeing with a worldview shouldn’t lead to unnecessary personal attacks. Your perspective is always welcomed by me…even when I disagree 😉
Thanks for giving me a chuckle.
I think you need to broaden your definition of pay check to paycheck. Folks in that age group have a lot of financial responsibilities including new mortgages, childcare costs, etc. The women didn’t say they wouldn’t pay or ask to put the $100 on a credit card— they just asked for a little time. I’d cut them some slack,
I didn’t get the sense that Mark was worried about getting paid, he just appeared to be making a “ things aren’t always what you see” comment, based on how these supposedly well off people were needing to wait for their next paycheck.
Marilyn, I’m not criticising — I know nearly all of them and they’re a great bunch of hardworking people. Suzie waiting until payday isn’t an issue at all. My point was more about how hard-working professionals on good wages still find it tough to stretch their budgets beyond everyday expenses. After all the effort they’ve put into bettering themselves, it just doesn’t seem right. Honestly, it surprised me that this was the case.
Call me crazy or whatever, but I would just have covered the deposit. The expenses younger guests at weddings these days incur seem out of hand. I can’t tell you how many bridesmaids dresses, required hair salon visits, plane tickets, hotel rooms, and gifts my daughter paid for. The fact these women might not have an extra $100 at the end of the month seems totally reasonable to me.
Ha, I appreciate the vote of confidence in my bank balance, but sadly my generosity doesn’t stretch to a further $2,600 deposit right now!
Between the (already eye-watering) five-figure wedding bill and covering the majority of a sixtieth birthday trip to the Canary Islands for 12 people — all landing in the same three-month window that also straddles Christmas— my wallet is having palpitations and threatening to consult the union over strike action.
I do understand your position, but isn’t all of this an example of life style creep? I think we can all be guilty of that regardless of our age or finances. Look at the party— 28 women and the deposit is $100 a head. Are all REALLY the closest friends? That number is large! And if the deposit is $100, the total cost is likely to be much greater — and this isn’t the wedding— just the run up. I’d guess that all the party participants are also invited to the weddin. So much more cost for them. They may well put the clothes for that event on credit cards (I doubt dresses from H&M will be acceptable) and each them will also have a plus one who will also need appropriate attire. Add in travel and hotel, and total grows. Also, it’s likely your daughter’s wedding might not be the only one they’ll attend this year. I don’t know about yours, but my wedding didn’t put that kind of financial pressure on my friends, My 58th anniversary is Monday.
Brace yourself — this is just the local hen do. A group of the girls are also flying to Rome for a three-day international hen in October. Not to be outdone, the groom’s going international too: his stag do is in Dubrovnik. My wife and I were invited to both, but politely declined. So yes, “wedding creep” is very much real, and it’s reached a ridiculous level.
And on your point about multiple weddings — my daughter’s been to three already this year, with another one just before Christmas. I guess that’s just the cost of being in that age bracket.
On a completely different note — happy 58th wedding anniversary for Monday!
How did you “manage” your share of the wedding extravaganza? Loosely, tightly, or something in between? I’d prefer a fixed $$ but maybe that’s not feasible.
Scott, we’re still handling our side of the wedding — currently running about 15% over the budget we set for our daughter. I’ve gotten pretty good at the silent head-shake-and-sigh combo. It doesn’t fix anything, but it helps.
I heard very similar items like this from my grandson, a Bachelor party in Ireland, nice, but that a bit of a toll on anyone attending in my way of thinking.
It’s all past my pay grade! Good luck!
My kids are hardworking professionals- one a MD in a high demand soecialty, the other a lawyer from a top 10 law school, Neither had education debt or spent frivolously. But they didn’t have extra money at the end of the month either in their late 29s and early 30s. They were truly “getting started,” and that cost money,
Mark, for some reason I am remembering an experience that is 180 degrees different from those kids in your post. Many years ago, I went with a friend to look at a house, which was part of the estate of a reclusive widower. The long abandoned house was so creepy that the real estate saleswoman waited outside while Mike and I checked it out. The interior reminded me of a house you might see in an old western movie. Sitting on a plain old wooden table were a stack of envelopes from Kidder Peabody, years before it would morph into UBS. They were all open, so I took a look inside, which revealed a portfolio worth nearly a million bucks.
Somewhere between the situation of the old hermit, and the young kids in your post, there is a sweet spot. I hope the kids find it before it’s too late.
The house turned out to be a great investment for Mike, and that brokerage account sure supercharged my retirement savings (just kidding).
Dan, that’s a sad story. I’d naturally lean toward the middle ground myself, but if I had to pick between the two extremes, I’d choose the youngsters’ path. Spending your life chasing an ever-larger bank balance sounds like a grey, lonely way to live.
Sometimes it’s not chasing – it just happens. I’m still trying to train myself out of a student/backpacker spending mentality at times – why take a taxi when it’s only 15 mins until a bus sort of thing.
The habits that get you there may end up being your life habits if mental health/social anxiety don’t enable you to get out and find active opportunities to spend on things that matter.
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