2012 vs 1984: Young adults really do have it harder today

[GP_Matt]

One of the big differences between then and today is the fixed monthly costs.
In 1980 people paid for their mortgage, property tax, utilities, insurance and a phone line.
In 2012 people pay for the above as well as
-$100 for cable
-$50 for internet
-$25 for long distance/call display/voice mail
-$100 for a cell bill (2 in a family)
-$400 for a car payment (Traditionally people saved up to pay cash for a car)

Just off the top of my head there is $625 in monthly bills that we have that our parents didn't have to make. And that doesn't include the extra cost to buy the computers, phones and TVs that go along with the monthly bills. Throw in the $6 lattes daily and the fact that we go out for food far more often than our parents did and it is easy to see why things look tougher for our generation.

[Maccalus]

Originally Posted by GP_Matt

One of the big differences between then and today is the fixed monthly costs.
In 1980 people paid for their mortgage, property tax, utilities, insurance and a phone line.
In 2012 people pay for the above as well as
-$100 for cable
-$50 for internet
-$25 for long distance/call display/voice mail
-$100 for a cell bill (2 in a family)
-$400 for a car payment (Traditionally people saved up to pay cash for a car)

Just off the top of my head there is $625 in monthly bills that we have that our parents didn't have to make. And that doesn't include the extra cost to buy the computers, phones and TVs that go along with the monthly bills. Throw in the $6 lattes daily and the fact that we go out for food far more often than our parents did and it is easy to see why things look tougher for our generation.

Yes, everyone always forgets that the average standard of living is higher today than when our parents were starting out. We definately pay for it, but most of those items are still definately luxury items. Plenty of reasonable people just starting out do not have a Cable bill, landline or car payment (buy used cars with cash). Cell phones and internet are added costs (Cell phones only because they are more expensive than the landline alternative).

The expectation of standard of living is much higher today though amoung the youth. I know people who have stretched themselves to the brink to jump straight into purchasing a 2000 Sq. ft. home for 2 people right away. On top of that, they need new cars, vacations abroad every year, etc. We, as a society have done a poor job teaching financial literacy and reasonable expectations to this generation. It takes time to work your way up to that life style (without major help from your parents). This is an observation coming from a current member of the youth (25 years old)

[shermanator]

Originally Posted by GP_Matt

One of the big differences between then and today is the fixed monthly costs.
In 1980 people paid for their mortgage, property tax, utilities, insurance and a phone line.
In 2012 people pay for the above as well as
-$100 for cable
-$50 for internet
-$25 for long distance/call display/voice mail
-$100 for a cell bill (2 in a family)
-$400 for a car payment (Traditionally people saved up to pay cash for a car)

Just off the top of my head there is $625 in monthly bills that we have that our parents didn't have to make. And that doesn't include the extra cost to buy the computers, phones and TVs that go along with the monthly bills. Throw in the $6 lattes daily and the fact that we go out for food far more often than our parents did and it is easy to see why things look tougher for our generation.

I would also argue that our generation goes on more exotic vacations then our parents. It seems like everyone has to take one tropical vacation a year.

[jammies]

Let's invent a time machine, send you kids back to 1984 and see how you do without cell phones, the internet, and easily accessible porn.

"Kids have it rough." Pshaw!

[GP_Matt]

Originally Posted by shermanator

I would also argue that our generation goes on more exotic vacations then our parents. It seems like everyone has to take one tropical vacation a year.

There is no denying that. I am 29 and have three vacations planned this year that will see me leave the country. One to Vegas but also Russia and Africa.
But then, I am also dual income no kids and am in no way complaining that my life is tougher than my parents.

[MarchHare]

Originally Posted by GP_Matt

One of the big differences between then and today is the fixed monthly costs.
In 1980 people paid for their mortgage, property tax, utilities, insurance and a phone line.
In 2012 people pay for the above as well as
-$100 for cable
-$50 for internet
-$25 for long distance/call display/voice mail
-$100 for a cell bill (2 in a family)
-$400 for a car payment (Traditionally people saved up to pay cash for a car)

Just off the top of my head there is $625 in monthly bills that we have that our parents didn't have to make. And that doesn't include the extra cost to buy the computers, phones and TVs that go along with the monthly bills. Throw in the $6 lattes daily and the fact that we go out for food far more often than our parents did and it is easy to see why things look tougher for our generation.

The only monthly bills I have are mortgage, condo fees (includes heat and water), property tax, electricity, internet, and mobile phone. It's very easy to avoid paying for cable, phone line (I assume you mean landline), long distance/call display/voice mail, and car payments if you want.

The point the article is making is that the price of housing and post-secondary education have increased far higher than the rate of inflation (and average salaries). This is irrefutably true. Young people today are forced to spend a much greater percentage of their income to pay for their education and housing than their parents did.

[Sliver]

Originally Posted by shermanator

I would also argue that our generation goes on more exotic vacations then our parents. It seems like everyone has to take one tropical vacation a year.

Yeah, I'm not sure if people always did this or I'm just more aware of it with Facebook, but holy crap are people every mortgaging their futures for a couple weeks in a tropical vacation on a way-too frequent basis. Cheap-ass Mexico is one thing, but that's not where people are going.

Time off from work spent with family/friends relaxing in town or even a snowboarding vacation or something in Banff is basically as therapeutic as a $10,000 vacation to somewhere warmer. We are not all entitled to a visit to the tropics, people. If you're rich or come from family money, have at it. But if you're slogging away in your 9 to 5 I'm sorry, you can't afford the thousands a year to treat the world as your playground.

[Hockeyguy15]

Originally Posted by jammies

Let's invent a time machine, send you kids back to 1984 and see how you do without cell phones, the internet, and easily accessible porn.

"Kids have it rough." Pshaw!

Do it...I'll make friends with Mark Zuckerberg

[bizaro86]

Originally Posted by ranchlandsselling

I pulled out a quick inflation calculator and discovered that the starting salary my father got in 1980 would be the equivalent of 390k today.

According to the Bank of Canada's inflation calculator, the equivalent of $390,000 today was $136,516 in 1980. Was your dad making 100k plus just starting out in the 80s? What did he do if so?

http://www.bankofcanada.ca/rates/rel...on-calculator/

[GGG]

The other thing that never gets addressed is the amount of expenses the current generation has added. Look and your internet, cell phone, cable bill for example. Those expenses did not exist. Also you can look at how much you get for the money you spend due to technological increases. A car in 1920 sucks compared to a cheaper version of that car now.

[The Yen Man]

Originally Posted by fotze

It does seem we replace stuff way more often than that generation. I think nothing to buy a new toaster or TV or cutlery. My parents still use the same stuff from 40 years ago. Mind you, stuff today is crap and disposable for the most part.

Digital cameras need to be upgraded every two years. I still remember the family kodak.

I also think that saving money would be done a lot more if you got the 20% interest rate they got back then. I would be saving my balls off if I got anywhere near that.

Also, I don't think luxury cars even existed back then. People with a $400k house and a $90k Range Rover probably wouldn't have existed.

My dad replaced his TV after 20 years of use. His landline phone right now that he uses is the same one he bought back int 1980. Nowadays, people replace TVs every 4-5 years, and cell phones every 2 years (or 1 if you're an Apple fan).

Houses are more expensive these days (offset by low interest rates), but almost everything else isn't. My dad bought a Super VHS player back in 1985 for over a grand. He told me blank beta tapes back in the day were 20 dollars a tape. That's just crazy expensive for the time. Electronics, which were a luxury item, are now almost treated like a staple. Look at how many gadgets kids have in school these days.

So I will say IMO, there is no way we have it harder these days than our parents did.

[Cowboy89]

Originally Posted by GGG

The other thing that never gets addressed is the amount of expenses the current generation has added. Look and your internet, cell phone, cable bill for example. Those expenses did not exist. Also you can look at how much you get for the money you spend due to technological increases. A car in 1920 sucks compared to a cheaper version of that car now.

Ask your parents how much AGT charged for a long distance phone call back in the 80s!

[Street Pharmacist]

Originally Posted by GP_Matt

One of the big differences between then and today is the fixed monthly costs.
In 1980 people paid for their mortgage, property tax, utilities, insurance and a phone line.
In 2012 people pay for the above as well as
-$100 for cable
-$50 for internet
-$25 for long distance/call display/voice mail
-$100 for a cell bill (2 in a family)
-$400 for a car payment (Traditionally people saved up to pay cash for a car)

Just off the top of my head there is $625 in monthly bills that we have that our parents didn't have to make. And that doesn't include the extra cost to buy the computers, phones and TVs that go along with the monthly bills. Throw in the $6 lattes daily and the fact that we go out for food far more often than our parents did and it is easy to see why things look tougher for our generation.

Food has never been cheaper. Clothing has never been cheaper. Luxury items have never been cheaper. However, "needs" have skyrocketed. Cell phone, carseats, hockey schools, HDTV, vacations, etc. All these"needs" used to be luxury items and no one felt entitled to them. Try telling someone on welfare that the iPhone they have is not a necessity

[GP_Matt]

Originally Posted by Sliver

Yeah, I'm not sure if people always did this or I'm just more aware of it with Facebook, but holy crap are people every mortgaging their futures for a couple weeks in a tropical vacation on a way-too frequent basis. Cheap-ass Mexico is one thing, but that's not where people are going.

Time off from work spent with family/friends relaxing in town or even a snowboarding vacation or something in Banff is basically as therapeutic as a $10,000 vacation to somewhere warmer. We are not all entitled to a visit to the tropics, people. If you're rich or come from family money, have at it. But if you're slogging away in your 9 to 5 I'm sorry, you can't afford the thousands a year to treat the world as your playground.

I quite like traveling and have made it a priority in my life. I certainly don't think that I am mortgaging my future to pay for it.

As for tuition, the vast majority of students go to school in the city that their parents live in. If you work for minimum wage 40 hours a week in the summers and 15 hours a week during the rest of the year you would make $11000 a year and pay almost no tax on that money. That is more than enough to pay for your tuition, books and have some money left over for entertainment. The key is that you have to eat at home and take public transit everywhere. It is a different story for those who have to move away to go to school of course but they are the minority and maybe their parents can spend some of the thousands that they saved by not buying a house in a large urban center.

[MarchHare]

Originally Posted by GGG

The other thing that never gets addressed is the amount of expenses the current generation has added. Look and your internet, cell phone, cable bill for example. Those expenses did not exist.

Well, cell phones have replaced landlines, and we had cable when I was a kid in the early 80s (not today's 500+ channels, mind you, but my parents still paid a cable bill every month). The only truly new expense is internet access, but I'd argue it's a net savings for many people. Without high speed internet access, I'd likely subscribe to a more expensive cable package for my entertainment needs. So instead of a $50 internet bill, I'd have a ~$100 cable bill.

[bizaro86]

Originally Posted by MarchHare

Well, cell phones have replaced landlines, and we had cable when I was a kid in the early 80s (not today's 500+ channels, mind you, but my parents still paid a cable bill every month). The only truly new expense is internet access, but I'd argue it's a net savings for many people. Without high speed internet access, I'd likely subscribe to a more expensive cable package for my entertainment needs. So instead of a $50 internet bill, I'd have a ~$100 cable bill.

The internet has also made things that were ridiculously difficult before possible. My grandparents to their children to Europe in mid 60s, and they booked their hotels by mail. They sent away for brochures, and then sent letters advising the hotels they'd be coming. That probably took 100x more time, cost more money to do (postage, etc) and probably didn't result in as good a deal as compared to 15 minutes of research on expedia.

[Sliver]

Originally Posted by GP_Matt

I quite like traveling and have made it a priority in my life. I certainly don't think that I am mortgaging my future to pay for it.

As for tuition, the vast majority of students go to school in the city that their parents live in. If you work for minimum wage 40 hours a week in the summers and 15 hours a week during the rest of the year you would make $11000 a year and pay almost no tax on that money. That is more than enough to pay for your tuition, books and have some money left over for entertainment. The key is that you have to eat at home and take public transit everywhere. It is a different story for those who have to move away to go to school of course but they are the minority and maybe their parents can spend some of the thousands that they saved by not buying a house in a large urban center.

I guess my point was if you can afford it, that's great. The problem is many can't but do it anyway.

[Lt.Spears]

I think things are harder now simply due to housing costs, someone else pointed out that at 19% interest, a 100K house was 540 bucks less a month than a 400K house at 4% interest.

That 540 bucks is MASSIVE when you think of what most 22-25 year olds start out at ( im talking 50K salary) 540 bucks a month is almost 6500 a year which could buy you a lot of luxuries.

One problem though is the sense of entitlment most young people seem to have, lots of young people who work in the oil industry feel they deserve to be driving BMW's and Infinity G37's. They want to maintain their parents standard of living while not maintaining that level of income.

I would gladly buy a 100K house at 19% interest over a 400K house at 4% interest simply because it would be MUCH MUCH easier to pay it off.

[Bend it like Bourgeois]

Is comparing generations is ever really possible? Things change too much. Overall I don't buy that anyone with a wee bit of ambition and smarts has any less opportunity now than in 1984. It just looks different.

The article reads more like a guy nostalgic for the simplicity of his youth than anything. I guess we all get there eventually.

[blankall]

Originally Posted by The Yen Man

My dad replaced his TV after 20 years of use. His landline phone right now that he uses is the same one he bought back int 1980. Nowadays, people replace TVs every 4-5 years, and cell phones every 2 years (or 1 if you're an Apple fan).

Houses are more expensive these days (offset by low interest rates), but almost everything else isn't. My dad bought a Super VHS player back in 1985 for over a grand. He told me blank beta tapes back in the day were 20 dollars a tape. That's just crazy expensive for the time. Electronics, which were a luxury item, are now almost treated like a staple. Look at how many gadgets kids have in school these days.

So I will say IMO, there is no way we have it harder these days than our parents did.

People are overlooking just how important the house is. In North America, that is the principle way that most people build wealth. If you're stuck renting longer and longer, it's going to take much longer to be able to build any kind of wealth.

Sure the modern world provides more opporunity to get drunk with your buddies, especially as people are having kids later and later. That's not really what we're talking about though. We're talking about the ability to graduate from school, get a job, and build equity.