How is everyone dealing with their finances in this economy?

[chedder]

Originally Posted by blankall

Encouraging people to put less down, during a housing crunch with uncertain interest rates and a potential crash in the future is not a good idea. Buying a home shouldn't be as big of a risk as it is.







Yes. Attached properties, generally, don't appreciate in value at the same rate as detaches ones. Making the jump from crappy house to nicer house is much easier than from attached unit to detached unit. Many Canadian cities lack adequate supply of liveable townhouses, aka the "Missing Middle".

I'm not encouraging. If owning is that important to people it's an option. And interest rates are always uncertain. You can lock in under 5% right now. Certainly better than my first mortgage rate. People have been totally spoiled with unrealistic expectations of free money (2% mortgages).

Potential crash? Could happen. For sure prices will go up and they'll go down. Risk is part of life and really shouldn't factor into buying a home to live in long term. If you go in thinking like that it's not a risk.

[Sliver]

Originally Posted by activeStick

I wonder how the next generation is going to purchase a home if they want to? With the prices being where they are now, the 20% minimum down payment and the cost of living just to survive these days being so high making it harder to save, I'm not sure how they'll do it. If they don't have parents (many who are also struggling) who can essentially give them money for a down payment, saving $100k minimum will be tough.

I think a huge thing for us GenXers and Millennials is we need to be helping the Zers and the generations coming up behind us more than the Boomers helped us.

I look at any wealth my wife and I may accumulate as familial wealth versus just money for us to blow on cruises and BS travel to ride elephants in Thailand because yOu CaN't TaKe It WiTh YoU.

In my view, setting money aside to ensure my kids (and eventual grandkids) will be able to get their degrees without any debt (or as little as possible) and have money for use as a down payment on a home is waaaay more important than selfish pursuits.

Life is way too hard and way too unpredictable. I think buying security for the generations coming behind you if you have excess is way more important than throwing on your cargo shorts and sandals and walking around another beach with a bunch of other grey-hairs.

I don't like the way boomers did their retirements. They really did seem to have a selfish ideology. I know they get picked on a lot these days, but they've always been like this and it has always surprised me how the ones I know seemed to hoard and blow their wealth on themselves instead of setting up the younger people coming up behind them. We're breaking that chain in my family.

As my wife and I get older, too, we want to be sure to exit the work world at an appropriate time to make room for the people coming up. How many old boomers do you know just sort of hobby-working even though they don't need the money because they're too uninteresting to develop hobbies? I know several who are just sort of #### blocking younger people from moving up in their careers because they won't make room (granted that's starting to change pretty quickly as they start to sail off into the sunset). I don't think the parents of the boomers acted like that. Really odd how that generation's worldview developed to the extent I think you can make some accurate generalizations.

[cam_calderon]

Originally Posted by blankall

The point is that what qualifies as "modest housing" has changed dramatically. Also what qualifies as "younger people" is changing dramatically. My parents bought their first detached house, a brand new build, well before the age of 30. That was the norm. Our entire neighbourhood was filled with people who'd done the same thing. All new families. That's far from the norm now. Pretending that it's just some thing that every generation has had to adjust to is straight up facetious.

But that's the reality of the market. Pining for the old days won't change that fact.

[cam_calderon]

Originally Posted by Sliver

I think a huge thing for us GenXers and Millennials is we need to be helping the Zers and the generations coming up behind us more than the Boomers helped us.

I look at any wealth my wife and I may accumulate as familial wealth versus just money for us to blow on cruises and BS travel to ride elephants in Thailand because yOu CaN't TaKe It WiTh YoU.

In my view, setting money aside to ensure my kids (and eventual grandkids) will be able to get their degrees without any debt (or as little as possible) and have money for use as a down payment on a home is waaaay more important than selfish pursuits.

Life is way too hard and way too unpredictable. I think buying security for the generations coming behind you if you have excess is way more important than throwing on your cargo shorts and sandals and walking around another beach with a bunch of other grey-hairs.

I don't like the way boomers did their retirements. They really did seem to have a selfish ideology. I know they get picked on a lot these days, but they've always been like this and it has always surprised me how the ones I know seemed to hoard and blow their wealth on themselves instead of setting up the younger people coming up behind them. We're breaking that chain in my family.

As my wife and I get older, too, we want to be sure to exit the work world at an appropriate time to make room for the people coming up. How many old boomers do you know just sort of hobby-working even though they don't need the money because they're too uninteresting to develop hobbies? I know several who are just sort of #### blocking younger people from moving up in their careers because they won't make room (granted that's starting to change pretty quickly as they start to sail off into the sunset). I don't think the parents of the boomers acted like that. Really odd how that generation's worldview developed to the extent I think you can make some accurate generalizations.

Your altruism won't extend beyond your kids, though, and rightfully so. All wealth is familial wealth, typically, which only entrenches the divide between the haves and have-nots. Your kids are lucky. I'm lucky because I'm an only child and my parents are in a very comfortable financial position, but many people weren't born on third base.

[btimbit]

The price to buy would be less of an issue if rentals weren't also insane right now. (Obviously the two are linked)

It's a little disingenuous to say 'oh well they'll just buy later' since it's not just about owning a home, it's about having a place to live at all.

[CliffFletcher]

Originally Posted by undercoverbrother

Can't compare, but to be clear that isn't because they didn't want to it is because they didn't have the money to spend.

All our money went to housing, food, clothing.

They had no spare $$, I do.

People who can’t afford that kind of stuff today just don’t have kids. Which is the point GirlySports and I are trying to make.

[cam_calderon]

I wouldn't begrudge anyone who left little or no inheritance for their kids. It's your money, blow it on swingers cruises if you want.

[Sliver]

Originally Posted by cam_calderon

Your altruism won't extend beyond your kids, though, and rightfully so. All wealth is familial wealth, typically, which only entrenches the divide between the haves and have-nots. Your kids are lucky. I'm lucky because I'm an only child and my parents are in a very comfortable financial position, but many people weren't born on third base.

I realize that, but you'd be either selfish or a poor planner to not play the game you were born into, right? Like, I could buy a 911 Targa (my dream car) if I wasn't worrying about how my children were going to afford a townhouse.

My altruism will also go beyond my kids since I'm already considering my grandkids who aren't even born, though. I'm very aware by the third generation the wealth is typically gone...just takes one fk up in the line to ruin it for everyone. Doesn't change how I should approach planning to optimize the chances for my kids/grandkids.

My wife and I delayed having kids by a few years for the sole reason of setting ourselves up a little better financially before we had them. I have a history of planning for people who aren't yet born, apparently.

I can't do a lot about the other people who weren't born fortunate, but I can definitely leverage what I have to help my kids versus blowing it on myself.

[undercoverbrother]

Originally Posted by CliffFletcher

People who can’t afford that kind of stuff today just don’t have kids. Which is the point GirlySports and I are trying to make.

So parents in the 2020's only have children if they can afford all sorts of extracurricular activities.

Got it.

So eventually the working poor will breed themselves into extinction.

[cam_calderon]

Originally Posted by Sliver

I realize that, but you'd be either selfish or a poor planner to not play the game you were born into, right? Like, I could buy a 911 Targa (my dream car) if I wasn't worrying about how my children were going to afford a townhouse.

My altruism will also go beyond my kids since I'm already considering my grandkids who aren't even born, though. I'm very aware by the third generation the wealth is typically gone...just takes one fk up in the line to ruin it for everyone. Doesn't change how I should approach planning to optimize the chances for my kids/grandkids.

My wife and I delayed having kids by a few years for the sole reason of setting ourselves up a little better financially before we had them. I have a history of planning for people who aren't yet born, apparently.

I can't do a lot about the other people who weren't born fortunate, but I can definitely leverage what I have to help my kids versus blowing it on myself.

It's very admirable. But when you said your generation as a whole should pass on their wealth, that's actually putting the less fortunate who'll have an inheritance of some old Mad comics even further behind the game.

[Sliver]

Originally Posted by cam_calderon

I wouldn't begrudge anyone who left little or no inheritance for their kids. It's your money, blow it on swingers cruises if you want.

I would begrudge that because it was easier to accumulate wealth for boomers with good paying jobs, low education costs and cheap real estate. They really had to navigate the world poorly to not do better on average than somebody born in, say, 1997.

So while it is "their money", money was easier to come by than it is now. I think a cruise is selfish AF if you have kids who are struggling. I don't get how you could have fun sipping on margaritas on some ostentatious floating oil burner if you have kids renting a basement suite because they can't save a down payment. A down payment you could have bought if you didn't go on a cruise or two.

[GGG]

Originally Posted by blankall

The point is that what qualifies as "modest housing" has changed dramatically. Also what qualifies as "younger people" is changing dramatically. My parents bought their first detached house, a brand new build, well before the age of 30. That was the norm. Our entire neighbourhood was filled with people who'd done the same thing. All new families. That's far from the norm now. Pretending that it's just some thing that every generation has had to adjust to is straight up facetious.

I think we need to specify what point in time we are comparing to but from 1999 to 2022 the percent of income spent on owned housing didn’t really change

https://thoughtleadership.rbc.com/pr...217.1706276087


Percent income spent on rent did. This doesn’t account for the latest run up in housing cost and interests but I think if we are talking about generational challenges then we shouldn’t narrowly focus on the last two years. I like to use the household income as a metric because the increase in dual income family creates a consequence of increased housing prices and it’s also agnostic of interest rates vs capital cost, just comparing price to inflation misses this.


What has changed significantly is the cost of SFHs

Renters dissave to a greater extent because they are grappling with higher living and debt-servicing costs, making saving for a down payment harder than ever. Only about one-third of Canadian income earning households earn enough to purchase a single-detached home on their income alone. This is a stark difference from 2005 when half of Canadians earned enough to purchase a home on just their income. More middle and upper-income earners could join the renting population if ownership affordability does not improve and more Canadians get priced out of the housing market.

The answer to all of this is build more housing and it will naturally fix affordability.

[undercoverbrother]

Originally Posted by Sliver

I would begrudge that because it was easier to accumulate wealth for boomers with good paying jobs, low education costs and cheap real estate. They really had to navigate the world poorly to not do better on average than somebody born in, say, 1997.

So while it is "their money", money was easier to come by than it is now. I think a cruise is selfish AF if you have kids who are struggling. I don't get how you could have fun sipping on margaritas on some ostentatious floating oil burner if you have kids renting a basement suite because they can't save a down payment. A down payment you could have bought if you didn't go on a cruise or two.

I disagree, I have told my parents to spend all their money (what little they have).

Do not want them going without to save for me or my kids.

They have done their time saving money and going without.

[cam_calderon]

Originally Posted by Sliver

I would begrudge that because it was easier to accumulate wealth for boomers with good paying jobs, low education costs and cheap real estate. They really had to navigate the world poorly to not do better on average than somebody born in, say, 1997.

So while it is "their money", money was easier to come by than it is now. I think a cruise is selfish AF if you have kids who are struggling. I don't get how you could have fun sipping on margaritas on some ostentatious floating oil burner if you have kids renting a basement suite because they can't save a down payment. A down payment you could have bought if you didn't go on a cruise or two.

This discussion is starting to go down a philosophical path, though. Haven't you already bought cars for your kids? You've already given them so many advantages in life. To what point do you mouthfeed your young'uns before they have to go and hunt for their own food?

I'm not criticising at all. As mentioned my parents have always supported me (I'm 28 and typing this from their living room after eating groceries they paid for).

[Sliver]

Originally Posted by cam_calderon

It's very admirable. But when you said your generation as a whole should pass on their wealth, that's actually putting the less fortunate who'll have an inheritance of some old Mad comics even further behind the game.

Well, I also advocate strongly for higher taxes on the wealthy, railed against lowering business taxes in Alberta and generally support basically every measure on a societal level to help the less fortunate. I hate the widening wealth inequity.

So on a macro level I'm doing all I can with my vote and the organizations I support (I quit the Canadian Federation of Independent Businesses over their lobbying to prevent making paid sick days mandatory for employees) to try to mitigate growing inequity.

In my family I'm doing all I can to help my kids not struggle and suffer.

I think it's a consistent approach and I'm certainly not stepping on any heads to put my kids ahead of yours. I don't see how flying all over the world or buying Porsches would be a better use of my money or help the world or my family in any way, shape or form.

[8sPOT]

Common theme that has been mentioned is so simple but also so very true.

Either increase your income or decrease your expenses. And the best way to figure out where you stand is by having a budget of some kind.

I agree with those saying once you do that it becomes kinda fun and sort of addictive. But most importantly, will be the key to relieving the constant anxiety and stress about finances.

Also, I try to talk with my 14 year old son all the time about money and finances. I'm pretty transparent with him about our bills and how I budget as I know I didn't learn anything about money as a kid. It's like society doesn't want kids to be able to understand money and that just sets them up for a struggle.

By having a budget, when all this crazy inflation hit it was a bit easier to cut the 'low hanging fruit' like movies, fast food, Flames games, etc.

Having said all that. Life is less fun these days. I enjoy doing all that extra stuff, but I guess I enjoy basic food and shelter more. Hard to argue that the standard of living in Canada hasn't gotten worse lately. And as a single parent, with a single income AND child support, I can't expect to have all the finest things in life. The day I no longer have to pay support is going to feel almost like winning the lottery, seems sad to say that out loud lol.

It does seem like multi-generational living will become more the norm too. My parents and I have been discussing selling our homes and buying something together. They're about to retire so it does make some sense, would help on both sides.

My question is how do things improve for us all? I dont see how this gets any better any time soon.

[activeStick]

Originally Posted by Sliver

I think a huge thing for us GenXers and Millennials is we need to be helping the Zers and the generations coming up behind us more than the Boomers helped us.

I look at any wealth my wife and I may accumulate as familial wealth versus just money for us to blow on cruises and BS travel to ride elephants in Thailand because yOu CaN't TaKe It WiTh YoU.

In my view, setting money aside to ensure my kids (and eventual grandkids) will be able to get their degrees without any debt (or as little as possible) and have money for use as a down payment on a home is waaaay more important than selfish pursuits.

Life is way too hard and way too unpredictable. I think buying security for the generations coming behind you if you have excess is way more important than throwing on your cargo shorts and sandals and walking around another beach with a bunch of other grey-hairs.

I don't like the way boomers did their retirements. They really did seem to have a selfish ideology. I know they get picked on a lot these days, but they've always been like this and it has always surprised me how the ones I know seemed to hoard and blow their wealth on themselves instead of setting up the younger people coming up behind them. We're breaking that chain in my family.

As my wife and I get older, too, we want to be sure to exit the work world at an appropriate time to make room for the people coming up. How many old boomers do you know just sort of hobby-working even though they don't need the money because they're too uninteresting to develop hobbies? I know several who are just sort of #### blocking younger people from moving up in their careers because they won't make room (granted that's starting to change pretty quickly as they start to sail off into the sunset). I don't think the parents of the boomers acted like that. Really odd how that generation's worldview developed to the extent I think you can make some accurate generalizations.

I applaud your view and think it's great that you and your wife feel that way. I do want to say though, it varies family to family. My parents (and many other of my parents' friends) have lived their entire life with leaving what they can for their kids and setting them up the best they can. So, they weren't all selfish and spending their hard-earned money on themselves. Many, like my parents have always had my future in mind.

[photon]

Originally Posted by topfiverecords

Nice Fata Dion.

Lol really?!?! Noooooooooooo.. It's all over.

EDIT: That sounds sarcastic, it's not, I'm laughing cause I'm sure I've crossed some threshold now.

[CliffFletcher]

Originally Posted by cam_calderon

I wouldn't begrudge anyone who left little or no inheritance for their kids. It's your money, blow it on swingers cruises if you want.

People today typically don’t receive an inheritance until their late 50s. Too late in life to fund much of anything besides a more comfortable retirement.

So any big contributions to your children's’ long-term welfare need to be made earlier. The problem is it’s tough to estimate how much you’ll need yourself by the time you shuffle off this mortal coil. Giving an adult child 150k towards a house when you’re 60, and then running out of cash at 82 because you wound up in residential care at $5k a month for 5 years might not be the best play.

But in general, I agree with Sliver. It’s unfair, but people who don’t get significant help from parents in the form of post-secondary education and down-payment towards a home are going to struggle to make it into the middle and upper-middle-class.

[cam_calderon]

Originally Posted by CliffFletcher

People today typically don’t receive an inheritance until well into their 50s. Too late in life to fund much of anything besides a more comfortable retirement.

So any big contributions to your children's’ long-term welfare need to be made earlier. The problem is it’s tough to estimate how much you’ll need yourself by the time you shuffle off this mortal coil. Giving an adult child 150k towards a house when you’re 60, and then running out of cash at 82 because you wound up in residential care at $5k a month for 5 years might not be the best play.

But in general, I agree with Sliver. It’s unfair, but people who don’t get significant help from parents in the form of post-secondary education and down-payment towards a home are going to struggle to make it into the middle and upper-middle-class.

Yeah, you're right. I guess I meant financial help, in general. As a general rule, if you've raised your kids in a loving home, fed them, put clothes on their backs, you've done your job. Rest is up to them.