Our Debt Trap Starts Early: Living At Home and Still Not Saving
George Boelcke CCP
July 03, 2007
A recent BoM survey conducted by Decima Research asked non-homeowners under age 34 for some savings and home purchase feedback.
Just like paying off our debts, the survey shows a real disconnect between the reality of what’s happening and the dreams of what the respondents would like to accomplish. Here’s what I mean:
The survey involved over 1,200 people aged 21 to 34 who had aspirations to purchase a home in the near future. Of those, nearly a third are still living at home in order to save for a down-payment.
The typical response was that this Generation Y would likely be purchasing a home in the next few years – yet they’d only been saving for a down-payment for an average of 1.6 years. With an average age over 27 and they’ve been saving for less than two years? And how much are they saving? Less than 13% of their income – even though they’re still living at home!
The respondents said they’d likely save more than 15% for a down payment and that it’ll take less than four more years to reach that goal. Yet this is a real disconnect between what they’d LIKE to do and what they’re ACTUALLY doing, in real terms, to save a ton of money.
For this generation, real savings aren’t happening, even when this age group has a real focused and tangible goal. In another recent survey, pollsters asked 18 to 21 year olds whether they’d start a savings plan of some kind in during the year. Over 90% of them said yes – but when that’s compared to the survey the year before – less than 20% actually did.
It’s not just Generation Y, but don’t all of us have real trouble finding a way to save? Why? Well, for this group, it’s likely very difficult because of student loans and their credit cards. But for the rest of us, isn’t it our current debts that are killing our financial dreams for the future?
Actions speak louder than words, and just having good intentions doesn’t make anything happen. It takes a big goal, a strong desire, a specific financial plan and payroll deduction or the savings coming right out of our bank account.
It’s called paying ourselves first. But for millions of people, just paying down our debts at a much faster pace is also a way to generate huge savings. It’ll create savings in interest and frees up a lot of money from payments that now won’t go out the door every month to make someone else rich.
Just like paying off our debts, the survey shows a real disconnect between the reality of what’s happening and the dreams of what the respondents would like to accomplish. Here’s what I mean:
The survey involved over 1,200 people aged 21 to 34 who had aspirations to purchase a home in the near future. Of those, nearly a third are still living at home in order to save for a down-payment.
The typical response was that this Generation Y would likely be purchasing a home in the next few years – yet they’d only been saving for a down-payment for an average of 1.6 years. With an average age over 27 and they’ve been saving for less than two years? And how much are they saving? Less than 13% of their income – even though they’re still living at home!
The respondents said they’d likely save more than 15% for a down payment and that it’ll take less than four more years to reach that goal. Yet this is a real disconnect between what they’d LIKE to do and what they’re ACTUALLY doing, in real terms, to save a ton of money.
For this generation, real savings aren’t happening, even when this age group has a real focused and tangible goal. In another recent survey, pollsters asked 18 to 21 year olds whether they’d start a savings plan of some kind in during the year. Over 90% of them said yes – but when that’s compared to the survey the year before – less than 20% actually did.
It’s not just Generation Y, but don’t all of us have real trouble finding a way to save? Why? Well, for this group, it’s likely very difficult because of student loans and their credit cards. But for the rest of us, isn’t it our current debts that are killing our financial dreams for the future?
Actions speak louder than words, and just having good intentions doesn’t make anything happen. It takes a big goal, a strong desire, a specific financial plan and payroll deduction or the savings coming right out of our bank account.
It’s called paying ourselves first. But for millions of people, just paying down our debts at a much faster pace is also a way to generate huge savings. It’ll create savings in interest and frees up a lot of money from payments that now won’t go out the door every month to make someone else rich.
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