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Sunday, May 7, 2017

The Generation of Non-Savers: Money Through the Generations

Let's face it, we're the generation of non-savers.  There's barely enough money to go around, how could we possibly SAVE any of it?  Sure, we save a thousand here, a couple hundred there, then BAM! the whole savings account gets swallowed by some trip to the Emergency Room where you get charged $2000-just-for-walking-in-the-door or some ridiculous not-covered-by-your-bumper-to-bumper-warrantee-that-cost-you-$2K-in-the-first-place car repair that ends up costing more than the car is worth.  Or, if your like our family, it's the random day to day expenses like $25 a week per kid in school lunches or $500 middle school field trips to Disney World or the $700 emergency vet bill for the crazy dog that ate 3 packs of gum that end up sucking the extra cash right out of our wallets each paycheck.

I guess that's one of the markers of our generation: money just isn't what it was for our parents or their parents.

How Did This HAPPEN?!
My grandparents were millionaires.  I'm not afraid to share that information.  Grandfather taught pilots in the Army, Grandmother stayed home with my father and uncles and volunteered for her local School Board.  The world was simpler then.  You didn't live on credit, you only bought what you have cash on hand for.  You didn't buy multiple cars, update your house furnishings every year,  or take lavish vacations.  That generation was smart.  They lived mostly debt free and within their means.  By the time they died my grandparents (even after spending years in a nursing facility) had more than enough money to Will to the rest of us.  It's like the universe knew we'd need them to save for us.

The key to my Grandparent's success was that the way they lived didn't reflect what was in their bank account.  As the generation that lived through the depression these people knew how to live on the cheap.  They knew how to stretch their dollar and they knew how to hold on to their dollar in case of economic turmoil.  They knew how to live frugally because they had to!

Our parent's generation was a little less smart.  They were the first real generation of Debt, where people had to buy on credit and where being frugal was no longer a necessity.  Of course they were college graduates (paid for by their well saving parents) and they got good jobs in their fields right out of college.  But life was more expensive.  Houses were more expensive.  Cars couldn't be bought with cash anymore.  And daily life expenses went up while incomes didn't grow proportionately to rising costs.  Don't get me wrong, our parents made out ok.  Saving modestly to help us through college, paying for tuition but not much else (telling us we needed to pull our own weight and work while going to school), saving enough here and there to provide us with happy family vacations, and keeping enough for themselves that they could partially retire in a modest home while working a part time job.

But their ability to save was hindered, not only because of rising costs but because of rising spending.  Suddenly, they were able to buy things that they didn't have growing up.  Consider this a partial rebellion from the generation of rebellers.  They spent money that their parents hadn't spent.  New washer driers that they couldn't pay for right away.  Cars that couldn't be paid for in full.  And a home that cost twice it's worth over the course of a higher interest 30 year loan.  Our grandparents probably watched them thinking "they will regret this later"... and they do.  Many of our parent's generation are doing what's called "aging in place".  They are in homes that are 40-50 years old and in need of constant maintenance (that many times they cannot complete), they are in locations that no longer have the hands-on jobs that they are trained for, and they have been left behind in this new age of digital life.  But they are doing ok!  Retired, working part time to have some extra cash for frivolous things, and living off of the minimal funds that Social Security and retirement accounts provide them.

But not us.  Nope.  We each graduated high school already in debt.   In a car we already owed thousands for covered by insurance we couldn't hope to pay (which thankfully our parents took care of while we were in college).  And we made it through college on ramen noodles and $.53 boxes of mac'n'cheese.  Got that degree and the $25,000 in debt that came with it (even though we worked two jobs all the way through college).  Left college to work in a field that has nothing to do with our degree, only so we can pay back the 23% interest rate on our school loan.  Living in over priced apartments and condos.  Barely getting by.  One month at a time.

And then something happened in our mid-twenties that changed everything.  Marriage.  Joining two indebted people together to form an even larger pile of Debt. And because no one gets married on the cheap now-a-days add to it the debt of a wedding.  Then comes the kids.  The money-sucking kids.  All the baby gadgets, and toddler proofing, and toys, and CLOTHES... oh my goodness the CLOTHES that these little boys rip through!  And the diapers, formula, daycare, etc... Yes, it adds up.  And eventually the debt becomes an ever mounting black cloud that consumes life.  Bleak, very BLEAK.

There IS A Solution... 
It's called NOT CONSUMING.  No, seriously... It's a whole movement in our generation!  Being Non-Consumers (a close cousin to being a Minimalist) means prioritizing what you NEED to consume and then choosing carefully what you WANT to consume.  So take for example the classic "bigger is better" home.  No, No, NO!  Bigger isn't better. Fancier isn't better.  Newly remodeled and fully upgraded ISN'T BETTER!  Who taught us this?! It certainly isn't!  Sure you'll be the envy of all your friends when your house is beautifully decorated and has all the latest gadgets and surfaces... but do you NEED that stuff?  With a bigger house comes bigger bills.  And man do those add up!  Insurances, the unavoidable repairs, gas, electricity, cable/internet, water, trash... the bigger your house the bigger your bills!   And what happens when there's that annual Escrow letter?  You know the one.  The one where they say "oops, we messed up your Escrow estimate and you now have to pay $300 extra per month to make up the difference over the next 2 years".  Yeah, we've all gotten THAT letter.  We've gotten it TWICE in the 2 years since we moved here.  But that's another story that will be shared on our other blog The Time We Bought A Fixer Upper.

No, you don't need to be the envy of everyone else.  No, you don't need 3000 square feed for your family of 4.  No, you don't need that super fancy bedroom set and living room furniture. What do you NEED?  You need a house with a roof (preferably one that doesn't leak), a kitchen you can prepare meals for your family in, and rooms for you to sleep.  A common space for playing family games and watching TV is definitely a good thing to have too.  Sure, maybe if you like to have people over you should make sure to have a home that has enough room for friends to hang out, but that's a bonus!  If your friends are really your friends they wont mind being in your truly lived in home and wont have second thoughts about the lack of perfect staging in your living room.  Especially if you have children.  Kids destroy EVERYTHING.  They stain EVERYTHING.  My husband says "this is why we can't have nice things."  And he's right!  We have three minions running around the house in muddy boots with grape juice sippy cups and greasy snack-fingers.  No one wants to have children in a staged home.  No one wants to come over for play dates in a staged home.  It's just not logical.

Although I know many from my generation that are in dire financial debt, thankfully we have been blessed with money managing skills that have kept us mostly debt free (except the house and 2 cars).  We got married not cheaply, but not outside of our means either.  We worked diligently to pay off our student loan debt in the first two years of our relationship.  And we kept my paid-off clunker car until our school loan was paid off.  And we maid sure that our co-payments and deductible were reasonably affordable when we had our children.  Then after our family started to grow we still found ways to save money.  Our children were cloth diapered.  One of us stayed home with the kids so the other could work (yey for not having exorbitant daycare bills!!), and we put away every penny possible.  We lived in a reasonably priced rental and drove paid-for cars until we had saved enough to purchase our home.

And then my millionaire Grandmother died and left us a small chunk of cash (no really it was a small chunk, she spread her money out to all the family, which it turns out is much larger than I knew).  We had enough to finally put a down payment on a house.  But not any house, we wanted to do what many others in our generation refuse to do: BUY UNDER OUR BUDGET!  Seriously, we bought a house that was about $100,000 UNDER what our bank said we could get a loan for (check out our blog The Time We Bought A Fixer Upper).  Our cars were paid off (although they were reaching the "critical" age and mileage where they would either need substantial work or we would have to buy newer cars), our student loans were closes, we had no credit card debt, but we still chose to purchase below our means.  It's a choice that we didn't take lightly.

Sure we WANTED to buy a new house with top of the line upgrades and that we wouldn't have to ever do any work on.  Our friends all did that.  They have BEAUTIFUL houses with pretty new floors and granite counter tops in ritzy neighborhoods, some with gates and HOA fees.  We didn't want to live AT our means because we wanted to have EXTRA money.  So we put 10% down and kept 10% in savings for the "what ifs".  It was a good decision for many reasons (that will be discussed on our other blog The Time We Bought A Fixer Upper) but suffice it to say things came up.  We had medical bills, leaky roof spots, hurricane damage repair, and just general life situations that demanded money.

But because we had prioritized the things we NEEDED to spend on we had the flexibility to spend on the things we WANTED.  We have taken family vacations and adult-only vacations (the all essential for parental and marital health) which you can read about on our travel blog 5 Little Birds Travel The World.  And we did it all by consciously saving money and consciously spending money.

What Can YOU Do?
We've all seen those cool charts on Pinterest that show you how to save $6,000 over the course of the year.  But really, is that possible when you barely make ends-meat each month?  No, it's really not.  But what CAN you do?  Here are 10 simple solutions:

1.  Save a Penny.  Sounds small right?  Well that's because it is.  It's tiny.  But when that penny has  nickel, dime, and quarter friends those little tiny things add up.  We all have that random change in the bottom of our purse or the crazy change that comes out of the washer every time our husband does the laundry.  Put it away.  In a little cup on your dresser or in a cute piggy bank.  Then when it's full take it to the bank and deposit it into your savings account.  Wait, you don't have a interest bearing savings account?
2.  Get an Interest Bearing Savings Account.  Even if you only have a few hundred dollars to start, that interest adds up.
3.  Teach your children how to save (and spend!) responsibly.  Yeah, that's right.  Talk to your kids about money.  Talk to them about why you spend what you spend and why you save what you save.  Kids have no concept of money unless we teach them!  We use these fun little Money Saving Pig Banks to help teach the kids.

4.  Live Within Your Means.  No really, do it.  You don't need a brand new car, well maybe you need a car, but does it have to be brand new with all the latest technology?  Do you need a $500 iPhone?  No, you can get the $60 smart phone that does all the same stuff.  If you don't have the cash on hand to spend on something then it's not within your means.  Don't spend money you don't have.
5.  Don't fall for the Buy-It-Now-Pay-For-It-Over-Time Scheme.  Have you ever done the math on this?  Buy a $1000 sofa now and pay for it over the course of 24 months with a 13% interest rate... That $47.56 a month sounds nice doesn't it?  No, No, NO!  Do you realize that $1000 sofa ends up costing you $1141?!  Really, you have paid $141 more than the sofa was worth.  And now it's 2 years later and the sofa is worth less.  You should have put that $141 into your savings account and watched it turn into $150 over the course of that 24 months instead.
6.  Buy Used.   Did you realize that that sofa that cost you $1141 ($141 more than it was worth) would have actually only cost you $300 if you bought it used?  Seriously.  Buy Used.  You can spend the extra $10 on cleaning supplies and really make that sofa look amazing.  No one will know it's used, unless your like me and brag to your friends about your $35 sleeper sofas.  That's right, I bought 2 sleeper sofas for $35 from the Habitat for Humanity ReStore.  They were in perfect condition.  Had been used in a hotel that was remodeling.  They are perfect.  This works for clothes too (my kids live in used clothes from places like Once Upon A Child).
7.  Stop Going Out To Eat.  That take out, trips through the drive through, and random nights out really add up.  Have you ever looked at how much you spend on this stuff?  Take a break from getting this stuff. It's bad for your health anyway.  Use it as a treat not a staple.
8.  No More $5 Coffee.  Really? $5 for a tall non-caf soy hazelnut coffee with extra vanilla syrup... That same coffee only costs $.25 on sale in a K-Cup and you can add as much french vanilla creamer as you want to that bad boy.  Did you realize that you spend $5/day on that coffee?  That's $155 per month on coffee.
9.  Just say NO.  This is a big deal for us.  I have to tell the kids "no" constantly.  It's the check out line candy ($.96 per pack of gum for 3 kids is $3 extra per grocery trip... at 5 times a month that's $15 in gum... $15 IN GUM!), or the random outings that really add up for us.  Why does it cost $15 per kid to go to the trampoline place for 1 hour?  Just say No.  Why does it cost $6 per kid to go to the bouncy house place?  Just say NO!  Why do you need to buy $4 specialty ice cream cones when there are $1 Frosties across the street?  JUST SAY NO! It gets easier the more you do it.
10. YARD SALE!!! Everyone loves a sale!  But now YOU can make the money instead of the store.  Whether your selling your old stuff or buying old stuff from other people, Yard Sales are a great way to save or make some dough.

What other ways to you save money?  Which generation are you from and how did your parents help teach you better spending and saving habits? Please share your RESPECTFUL comments below.


  1. I truly enjoyed this article. Even with scholarships, I still graduated college with debt. Even though my parents have minimal debt, I am drowning in it. I am hopeful that things will turn around soon!

    1. I'm hoping so too!! It's very hard to live in this generation without a great deal of debt. The important thing to remember is to not add debt on top of debt.

  2. OMG this is the most excellent article! Well done! I agree with everything you've said here. People need to really examine their spending habits and the "why" of how and what they're spending on and get honest with themselves about it. I've had the McMansion experience and al the resulting hoop-la that goes with it. Enjoyed it, but best day ever when you realize you can let it go and be even happier (and more financially secure!) without all that excess. :-)

    1. Yes!! "Live within your means" is sooooo important. Excess isn't good unless it's excess happiness, and money doesn't buy that (but saving it can lol)!!

  3. This is one of the best "money saving" informative articles I have read in a long time. My husband and I were just having this conversation yesterday about saving, spending, and being smarter with our money. I love how you go through the different generations and discuss how things have evolved and changed. Thank you for this! I will be saving it to read again and share with my husband!

    1. I'm glad you enjoyed it! It's so important for us all do really examine what we consider a need and what we consider a want. And we also need to think about what all of this means for the NEXT generation!

  4. As a Millennial, I am always finding a way to balance the lifestyle I want with the my budget. Reducing shopping habits, as well as choosing to buy secondhand whenever I do shop, makes a huge difference.

    1. I agree. It's a lesson I am trying very hard to teach my Millennial daughter and my Founder's Generation little ones. I want to show them how it SHOULD be, and how it IS.

  5. Thanks for sharing, these are great tips! SO relatable :)