Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Places where the cheaper housing is also don't have many well paying jobs. Places that have well paying jobs don't have cheaper housing unless you make a big sacrifice like driving an hour.
And you don't think that was also true in 1962?
Quote:
Originally Posted by redguard57
Ie: I had a job offer in Huntington Beach, CA and they were going to pay me about $70K to start. Beautiful, awesome place and it was a good 25K more than I was making. But after taxes, the housing I could have afforded to buy in that area would have been about an hour away from the workplace on a light traffic day. I had multiple offers from other states, ie: Billings, Montana, where you can get a starter house for less than $100K but they were only going to pay me about $35K and that was after I argued that their initial offer was too low.
The income:house ratio has gone WAY up. You need to be about twice as well off as in the 1960s/70s to buy a house. I followed my mom's path quite closely; actually did a little better than her in college and in the 1970s when she was at my current place in her career, she easily afforded a modest house in a reasonable neighborhood, whereas I had to take a major fixer.
People today have much higher expectations in my opinion. People "deserve" a BMW or $800 smart phone. When I started out, I had only a used motorcycle for several years, then bought an old Chevy Nova. I lived with room mates until I saved enough to buy a house then they paid me rent. I maxed out my 401k once I was starting to get financially comfortable. I had a very strict budget and stuck to it. If you are willing to make sacrifices and plan long term, you can get ahead. You don't have to be the smartest guy in the room, just smarter than most of the guys in the room. If you aren't motivated to change your position in life and have to own the latest car, technology etc. well then......................
You're not listening. Cars and smartphones are not the problem. Cars, especially given the technology that comes in them, are about the same price they always were proportionally. Cheaper, probably, because if you take care of a new car it will probably last you 10-12 years whereas older cars tended to need major repairs more frequently. So are refrigerators and TVs. Communications including the internet & smartphones are also probably about the same proportional cost when you consider what long distance used to cost. I got a tablet for free with my smartphone data plan, $82 a month. I could, at best, get a cel-phone for about $45 without smart capability, but today people communicate differently and I need to respond to e-mails & texts quickly. Proportionally that is about the same or less actually, given the communication & computing power, as the ~25-35 a month my parents used to pay for home phone service back in the 80s. That's cheap, but whoop dee doo.
Hell, clothes are WAY cheaper than they used to be, so cheap you don't even need to repair clothes, you just buy new ones.
What we're talking about are the big ticket items - college education, health care, housing, starting a family. Those are much harder to afford than they once were.
Last edited by redguard57; 02-24-2015 at 05:27 PM..
It wasn't as bad in 1962. A one-income household could afford a suburban house and kids.
You can't save for a down payment when your rent is the same price or higher than a mortgage would be and your salary isn't keeping pace with the increase. My salary has increased by about 8% in 3 years while rents have increased in my area by 30% over the same time period. If I change locations, I start at the bottom of the salary schedule again, so maybe I could find one of those cheaper rent locales, but I'd lose what step raises I've earned negating the advantage.
I'd have been living with roommates until I was 40 trying to save a 50-100K down-payment.
It wasn't as bad in 1962. A one-income household could afford a suburban house and kids.
You can't save for a down payment when your rent is the same price or higher than a mortgage would be and your salary isn't keeping pace with the increase.
Get roommates...
Quote:
Originally Posted by redguard57
My salary has increased by about 8% in 3 years while rents have increased in my area by 30% over the same time period. If I change locations, I start at the bottom of the salary schedule again, so maybe I could find one of those cheaper rent locales, but I'd lose what step raises I've earned negating the advantage.
I'd have been living with roommates until I was 40 trying to save a 50-100K down-payment.
Not 40, maybe 35. You have to invest your money, not just save it. If your money doesn't grow, of course you'll have to save longer.
That's exactly what I've been saying. We were told we wouldn't have to live like college students until we're 40. If someone had said, "you'll go to college but jobs won't pay **** and you'll still need roommates" then I wouldn't be so annoyed. It probably wouldn't even save that much because multiple roommates would probably share a house, not a small apartment, making everyone's share at best 100-150 less than I was paying for a slumlord apt and at least I got privacy. When I see people renting rooms out it's in the 550-650 range and I was paying $725 for my own place, slumlord apt though it was. That's about $20K over 10 years and I can save about 15K per year on my own. So yeah, 40, not 35.
Quote:
Not 40, maybe 35. You have to invest your money, not just save it. If your money doesn't grow, of course you'll have to save longer.
Yeah that was what bs salespeople told me in the mid 2000s. The biggest mistake I ever made was putting money in mutual funds, then losing my job because of the recession and having to rely on my savings to survive and locking in losses. Never again.
People today have much higher expectations in my opinion. People "deserve" a BMW or $800 smart phone. When I started out, I had only a used motorcycle for several years, then bought an old Chevy Nova. I lived with room mates until I saved enough to buy a house then they paid me rent. I maxed out my 401k once I was starting to get financially comfortable. I had a very strict budget and stuck to it. If you are willing to make sacrifices and plan long term, you can get ahead. You don't have to be the smartest guy in the room, just smarter than most of the guys in the room. If you aren't motivated to change your position in life and have to own the latest car, technology etc. well then......................
Nonsense. When I was growing up, it was commonplace for middleclass families to own summer vacation homes, take vacations, and own boats.
Now these are luxuries that only rich people can afford.
Again, budgeting and planning are useless when one's income doesn't meet basic expenses.
That's exactly what I've been saying. We were told we wouldn't have to live like college students until we're 40. If someone had said, "you'll go to college but jobs won't pay **** and you'll still need roommates" then I wouldn't be so annoyed. It probably wouldn't even save that much because multiple roommates would probably share a house, not a small apartment, making everyone's share at best 100-150 less than I was paying for a slumlord apt and at least I got privacy. When I see people renting rooms out it's in the 550-650 range and I was paying $725 for my own place, slumlord apt though it was. That's about $20K over 10 years and I can save about 15K per year on my own. So yeah, 40, not 35.
Yeah that was what bs salespeople told me in the mid 2000s. The biggest mistake I ever made was putting money in mutual funds, then losing my job because of the recession and having to rely on my savings to survive and locking in losses. Never again.
If you can save 15K per year, that's $150,000 after a decade, even not including earnings on the money. This brings you to only needing a $150K mortgage for a $300K house. If you start at age 23, this happens at age 33, not 40. You find a $300K house and due to low interest rates your $150K mortgage will be manageable even if your salary is only $55K.
And I am sorry you fear the stock market. Over the long run it is one of the best things you can own. You just have to diversify and not pay high fees or panic-sell when share prices go down.
If you can save 15K per year, that's $150,000 after a decade, even not including earnings on the money. This brings you to only needing a $150K mortgage for a $300K house. If you start at age 23, this happens at age 33, not 40. You find a $300K house and due to low interest rates your $150K mortgage will be manageable even if your salary is only $55K.
And I am sorry you fear the stock market. Over the long run it is one of the best things you can own. You just have to diversify and not pay high fees or panic-sell when share prices go down.
I had the misfortune to graduate in 2007, and I thought myself lucky to get a job. So I had just started working but had some savings from my prior years in the military, put it into some mutual funds which seemed "smart." That job I got was part of an expansion and it was obviously the first to go when things got bad. I couldn't have predicted the financial crisis and its effects, but now I'm much more conservatively oriented.
I can save $15k a year now, but I struggled to find a decent-paying work between 2008 and 2012, from 25 until I was 29. Ironically, it was the temp and part-time positions I had been working, when aggregated, that helped me make a successful argument for myself in a national search, so I needed that experience. During those years I treaded water at best and had to use savings to make up for the months here and there when I had no work. I could have moved back in with my parents but was determined not to do that unless I was about to be homeless.
Very few people I know without connections hit the jackpot with a full-time & benefits job at 23 fresh out of college. They spend 3-4 years at least bouncing around. No amount of "trying harder" makes a difference because you have to get experience to get your foot in the door anywhere, assuming no inside connections. Where I work we don't even consider someone without at least 2 years experience either full time or aggregated part time.
I had the misfortune to graduate in 2007, and I thought myself lucky to get a job. So I had just started working but had some savings from my prior years in the military, put it into some mutual funds which seemed "smart." That job I got was part of an expansion and it was obviously the first to go when things got bad. I couldn't have predicted the financial crisis and its effects, but now I'm much more conservatively oriented.
I can save $15k a year now, but I struggled to find a decent-paying work between 2008 and 2012, from 25 until I was 29. Ironically, it was the temp and part-time positions I had been working, when aggregated, that helped me make a successful argument for myself in a national search, so I needed that experience. During those years I treaded water at best and had to use savings to make up for the months here and there when I had no work. I could have moved back in with my parents but was determined not to do that unless I was about to be homeless.
Very few people I know without connections hit the jackpot with a full-time & benefits job at 23 fresh out of college. They spend 3-4 years at least bouncing around. No amount of "trying harder" makes a difference because you have to get experience to get your foot in the door anywhere, assuming no inside connections. Where I work we don't even consider someone without at least 2 years experience either full time or aggregated part time.
Sure - I don't deny that the recession made it difficult to save money. Fortunately the economy has bounced back quite a lot.
As far as what new grads can make...it depends on the field/major.
In 1990 my salary was $30,000 and I could only scrape up around $1000 after all my taxes and expenses that year. I also was making house payments. I was also fully funding my tax deferred retirement plan.
I lived within my means.
My salary kept incrementing over the years and instead of spending the gain I saved it. I lived within my means another 6 years and then used the money I saved to get out from under a depreciating house and get out of the small town. Moved to a much larger city, got a job, and rented - and lived within my means. I moved all over the place, became a consultant, and lived within my means.
I drive a 12 year old economy car but can afford a very expensive flashy sports car. I just don't want to be a target of opportunists.
You can live within your means.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
