By Brenda Weathers Hargroves
A recent social media dIcussion focused on Millennials’ spending habits.
Earlier this month, Kieran Gair’s article in the UK Times discussed Baby Boomers’ reasoning that Millennials can’t afford to buy homes because of their Netflix subscriptions, takeaways (coffee, food, cell phones) and other ‘luxury’ lifestyle choices.
Millennials responded that Boomers are out of touch. They argue that the current cost of living has increased exponentially. Saving the $15 a month they pay for a streaming service will not make a dent in the amount currently needed to purchase a home that costs approximately six times more than when Boomers were buyers.
I’m a Baby Boomer and I believe valid points exist for both sides of this coin.
I don’t pay for streaming services, as I find cable’s On Demand feature provides more than enough TV entertainment for the time I’ve allotted to this activity. But streaming services do have their advantages. This coming from one who binge-watched four seasons of The Marvelous Mrs. Maisel while visiting a friend who subscribes to Prime Video.
Having children in the home is also a consideration. Like adults, knowledge of the latest and popular trends is important to children’s ability to relate to their peers. While cable TV does broadcast children’s shows, I’m sure many are not programs that are all the rage of kids today.
I rarely spend money on coffee, lattes or takeout food services. But, then again, I’m retired. I don’t share the life of working parents who may not always have time to prepare meals for their family. And who can blame people for treating themselves to an occasional specialty coffee, if that’s what makes them happy?
I’m mostly at home, so anyone can easily reach me by phone or email. But many folks require mobility in order to handle their day-to-day activities or businesses. Thus, the need for more expensive cell phones with all the bells and whistles.
The solution is simple. The decision to plug into more convenient ‘luxury’ lifestyle items depends on your priorities. Personal finance writer Maurie Backman defends her reason for subscribing to several streaming services in a June 2022 article. She states, “Some people spend a large chunk of their income on a big house or a nice car. We don’t. Our house is modest relative to our income, and both of our cars are old, including a Prius we’ve had for over 15 years… Because we don’t spend excessively on large expenses, we have more wiggle room in our budget for smaller ones. And it’s those little things that make us happy on a regular basis.”
Prioritizing your goals is the key - assuming you’ve identified them. And yes, write them down. This article will help you with the process.
Getting back to the original argument, it’s true that the cost of everything has increased over time. It’s become harder and harder to purchase big-ticket items like a home. So, where do you start?
Be truthful. Is owning a home a realistic goal for you at this time? If not, you may need an alternative plan until such time that your situation changes. Save as much as you can towards your home ownership goal, so when the opportunity presents itself, you will have accumulated funds. Work on increasing your credit score so you’ll be eligible for a competitive interest rate on your mortgage loan. And set a completion time. When will you be ready to seriously consider the prospect?
If owning a home is currently a realistic goal, I suggest following these steps:
Determine how much you need to reach your goal along with how and when you anticipate accomplishment (SMART goal-setting).
Assess how much you’ve currently saved and assign that amount towards your goal.
Review your current expenses to determine needs vs. wants.
Calculate what expense(s) you can cut in order to reach your goal faster. It’s OK to have wants, but make sure those wants help you achieve your overall goals, financial or otherwise.
Put unanticipated amounts you receive towards your goal (income tax return, inheritance, etc.).
Control your finances to stay on track.
Reassess at anticipated end date.
You may be ready to start looking for your dream home. Or you may need more time to accomplish your goal. Remember, it’s OK to change the plan, but never the goal.
Let’s face it. Time and sacrifice are critical when working towards achieving long-term goals. But it’s ooh so worth it when you accomplish them!
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