Let me give you the stories of two men. One we'll call Jim. He was homeschooled, and married at 18. He didn't go to college, but immediately took a job at a financial planning firm. He became certified in investments, and worked his little butt off building his own client base. He looked about 12, but he always dressed in suits and always looked very impressive.
Their first child was born when he was 20 or 21, I think. As far as I know, even in this economic downturn he is still doing well, trying to provide for his family and grow their nest egg.
Now let's talk about Bob. Bob wasn't married, and so he didn't worry too much about how much money he was making because he didn't have a family to support. He didn't have many expenses. He just earned a small pay and lived quite comfortably himself, until he married when he was quite a bit older. As soon as he married, he began earning more and doing better for himself. But had he worked hard and demanded fair pay when he was 22, he would be in a much better financial situation today.
Many men just don't worry about saving for retirement, or getting a house, or becoming stable when they're single. Single women buy homes; single men tend to live in apartments because they don't care as much. But in the long run they do themselves a disservice, because when they do marry (if they do), they've lost about a decade or so of good earning years and saving years.
Dr. Helen, who is not a Christian, has an interesting post about how many young men are eschewing home ownership altogether. The comments, many from those same young men, are very insightful into how that younger generation is thinking. Basically: why buy a house when taxes will just eat it up? It's women who want the houses anyway. Let them worry about it.
There is so much wrong with this it's hard to know where to start. I understand their feelings, but it's not healthy for society. I suppose if they never were to marry it would be fine, but lots of men at 23 or 24 don't really think of themselves as marrying. It seems so far off. Chances are, though, that they will eventually tie the knot, and I don't think you should squander those years when you could potentially be saving.
My mother taught me while I was a teenager to save for retirement and to save for a downpayment for a house, and I did. One of the best services we could do for our kids is to teach them that if they start saving when they are young, life is so much easier in the long run. It is hard to start saving for retirement at 45. It is so much better at 25. I know cash is strapped at 25, but you don't need a big-screen TV. You don't need to eat out every night. You don't need all the latest gadgets. It may seem like responsibility is a long way off, but think instead of these years as the easy years, the free years. You don't have any major expenses, so now is the time when saving is actually the easiest. So save. Be responsible. Don't just waste your life away until responsibility hits. Act responsibly now, and you'll be so much more comfortable in the end.
I remember reading about retirement savings like this: Take two individuals, and we'll call them Jim and Bob again. Jim saves $2000 a year in a retirement account from ages 19-26, and then he stops, because he wants to buy a house. Bob, on the other hand, doesn't start saving until he's 26. He puts in $2000 a year until he's 65. Guess who has more in the end? Jim. It's starting early that does it for you, because you have that extra time to earn more return.
In the same way, I figured out one year that if you put away about $5000 into a retirement account at the birth of a baby, that is all that would be needed to fund their retirement, because by the time they retired, it would have earned so much return. The problem is that when a baby is born, you usually don't have $5000 lying around (and you usually can't contribute to a tax-free retirement account until you yourself have income).
But we've got to get smart about this. Let's be honest: government deficits are huge right now, and the biggest item on government expenditures is all the transfer payments to individuals: health care, social security, etc. At some point there just isn't going to be the money for all of this, and it will collapse. And the generational cohort above us, the Baby Boomers, are so numerous that they're the ones who are going to cause it to collapse. That means that our generation, the generation that is 25-40 right now, is going to be pretty much on its own when it comes to retirement. Do you really think you're going to see much of your social security (or CPP in Canada) dollars? I sure don't. Governments ultimately just don't have the money, and you can only print so many dollars before inflation takes over and the dollar isn't worth anything anymore.
So it's up to us. And that means we have to think smart now, while we're young, and while expenses are high. If you want until you're 45, it is so much harder to fund your retirement. Even if you're only putting away a few hundred dollars a month, in the long run that can really grow (and now's a good time, because the stock market is relatively low).
So don't worry about buying new furniture. You can buy that when you're 45 and the kids are older and won't wreck it anyway. Don't worry about new cars. Don't worry about big TVs. Save some money. And teach your kids to save some money while they're young. Don't let them waste their 20s, even if they're not married yet. They need that time, and we're all going to have to learn to be a nation of savers, because the safety net is going to be awfully small by the time we need it.
Your post is a good one and I agree with you wholeheartedly. I should however, pointout something that you may or may not realize.
Many of the men who frequent Dr. Helen's blog are men who have no intention of marrying-ever. They view marriage as a losing proposition for men and view the typical Western woman as being anything BUT wife material. I can't say I blame them all that much, even though it saddens me.
I spent some time when I first started blogging regularly reading a couple of men's rights blogs. I'll refrain from linking because the comments section of most of them is pretty shocking. Anyway, the guys who author these blogs frequently linked to Dr. Helen's blog.
In many instances, these men feel that as Western civilization continues on its dcline, the last thing they need is the distraction of a wife and kids.
Sorry if I got off topic. Just thought I'd shed a bit of light on the mindset of young men who say that buying a house doesn't interest them.
Even if it doesn't, that's no reason to be financially irresponsible.
Totally agree with you about Dr. Helen's blog. I find it interesting from a psychological standpoint--she often points to different research areas that I'm not aware of and makes interesting points, even if we come from different standpoints.
But I think what's interesting about those comments--even if the men are primarily from the "men's rights" movement, is that I think increasingly they are becoming mainstream. That is what many men in their twenties are thinking--why save, why invest, when a wife or kids will just take whatever you have?
The problem is that as that thought becomes more mainstream, as it is, it starts to become picked up even by those who philosophically don't agree with them. For instance, the trend of marrying later and getting a ton of education is extremely common, even in Christian circles, although it initially came out of the feminist movement.
So if the "men's rights" movement is trumpeting a lack of saving, a lack of investment, a lack of commitment, that could easily become the norm for male twentysomethings--even if they don't agree with the underlying reasons. And as Christians, we need to push back, and push back hard, against this, because all young men need to be saving in their twenties, if at all possible. You can't afford to lose that decade.
I know you get all this! I'm just saying that I pointed to it to show that this thought could easily become mainstream. And that really scares me!
And obviously, if you save for something carefully, and it's not too much, then yes, you can do it.
But I think if we all sat down and did the math, we'd see that if we don't save when we're young, it's really, really hard to save enough later. And we can't rely on the government.
It's not fair, because it's when we're young that we also need to pay for the house, and the kids' education, and the car. But that's just the way life is. The good thing is that if you act responsibly in your 20s and 30s, the rest is relatively easy!
But most 40 somethings have little or nothing saved for retirement, and they will never be able to catch up.
I agree that we all need to learn the lost art of frugality, responsible saving and investment.
And... I also want to challenge the whole cultural expectation of retirement. When did this idea creep into Christian culture? Who among the biblical disciples did we see in (voluntary) retirement?
Man(kind) was made for work, and work for man(kind). The idea that we should put such a priority on material gains in our early years - "storehouses on earth" - so we can sit back and coast in our later years doesn't seem to get our priorities right.
So yes, work hard. Live with frugality, be a good steward, invest in kingdom ventures. Plan for the future. But remember your life may be required of you at any moment, and as long as we have life we have work to do.
About Me: I'm a Christian author of a bunch of books, and a frequent speaker to women's groups and marriage conferences. Best of all, I love homeschooling my daughters, Rebecca and Katie. And I love to knit. Preferably simultaneously.
Stumble It!
This is so true. Thank you for the great information. I left something for youa t my blog.