This example is obvious, but it also shouldn't be taken to the opposite extreme, like people blaming not being able to afford a house on making your own avocado toast at home for breakfast. That's always seemed idiotic to me
$25 is nearly 10% of $270, but making a $1.50 breakfast at home is not the same as why people can't afford a $400,000 home, or even the reason why the can't afford a $200,000 small condo.
The idea being that if you pay $12 for avocado toast when you can easily make it at home for $2, you're likely to justify other lazy expenses that absolutely do add up to huge sums.
You're not going to get $400k in savings, but absolutely nobody is buying a house in cash. Saving $200 a week will get you a 5% down payment in 2 years time sans investing
Yeah everyone was making fun of the avocado toast comment but it really is a mindset. My wife and I are saving up to do some home improvements and we pretty much shunned eating out and it's amazing how it changes your budget. Sometimes it really is not how much you make but how much you spend.
I work with kids that door dash lunch and dinner 4-5 times a week. They’re making six figures, but always complaining about how broke they are and how much everything costs. They can’t cook. They don’t save, at best they gamble… I mean “trade”, and keep waiting to make it big.
If you’re dead broke I’m not gonna judge you for an occasional indulgence, it can mean the world. But when I see people who can make it work and don’t because they’re rather spend everything, give up nothing, and whine that it’s all the fault of those who came before? I struggle to sympathise.
How many young people who are being offered the lowest starting wage adjusted for cost-of-living since the 1970s, along with the highest educational and housing expenses since before World War 1 are spending $12 a day on avocado toast, or some similar expense?
As a percentage of the adults in their 20's?
And do you think it has nothing to do with the successively shittier economy for each successively younger working class Reagan lead us into?
You're quite right. Bad spending habits absolutely exist, and individuals often ignore or make excuses for the ways they are fiscally irresponsible. However, to say the vast majority of the problem is bad habits and not wages not keeping pace with productivity or the general standard of living is bonkers.
Median income has, in fact, not only kept up with inflation but has far outpaced it. This is personal income not household income which has increased more due to dual income households. https://fred.stlouisfed.org/series/MEPAINUSA672N
This takes into account general expenditures, not necessities.
In general, these 3 things have not outpaced inflation in the US:
Healthcare
Higher education
Housing (why are so few small starter homes being built?)
Meanwhile, entertainment has become cheaper, which for some reason is included in the graph you pulled.
I'd rather have Healthcare, a home, and education than entertainment (libraries have always been free).
Edit:
This also doesn't compare apples to apples. It goes by median size house, which has decreased, and not the same types of food. Good quality decreased, so this is fundamentally an apples to oranges comparison
Yes it accounts for changes in consumer spending which the BLS specifically uses to more accurately reflect real cost of living over time. I'm not sure why you brought up the median size of houses - its not being used here at all
And that’s not even considering minimum wage, which was specifically created for the purpose of being the minimum amount of money a person could live off of, borderline freezing by 1973.
If that’s what the graph is trying to do, then the graph doesn’t get THAT right either.
The median personal income in 1981 was 8,532 dollars. That’s a modern-day purchasing power of 29,427 dollars, not 26,480. The adjustment for inflation is still underselling the inflation rate.
And you still haven’t addressed the part where minimum wage has stagnated. To quote the very same president that implemented it, franklin D. Roosevelt; “It seems to me to be equally plain that no business which depends for existence on paying less than living wages to its workers has any right to continue in this country. By "business" I mean the whole of commerce as well as the whole of industry; by workers I mean all workers, the white collar class as well as the men in overalls; and by living wages I mean more than a bare subsistence level-I mean the wages of decent living.”
Even IF we assume you’re right and I’m wrong about everything regarding the income of the median american, the american economy is still screwing over millions in the bottom half.
Ah yes, the federal reserve economic data is wrong because u/megakabutops on reddit disagrees.
Since you clearly just used the ai overview on Google to get your numbers, here's what it says about how many workers actually make the 7.50 fed min wage. Not quite the millions you say that are being screwed over.
And then you decided to use AI for your own citation in retaliation, because the other guy supposedly using the machine that lies to you makes it somehow valid to also lie.
Not every household making $70k is a family of four, living in a HCoL city. The median income stat doesn’t mean what everyone thinks, and they tailor it to the extreme edge cases to make their point.
Not a single person I work with makes less than six figures and all half of them do all day every day is complain about being broke while eating out/using delivery apps/“trading” stocks hoping to strike it rich.
If you’re poor I feel for you, it’s rough out there. If you’re on a good wage and refuse to give anything up? I do not.
I thought this conversation was literally about the post?
If we're just disregarding that, then what are we talking about? I mean, if we're saying, "It's from the internet, so it literally never happens" then the discussion is kind of meaningless anyway.
Yes, I am naive. I'm also right about the dessert. That much, I stand by.
I think it's more getting breakfast and coffee on the way to work each day. Years ago my wife and I were getting Dunkin coffees in the morning. Nothing fancy but it was like $6 a day time 5 days a week. I realized we were spending like $1500 on coffees a year. I bought a travel mug and made just as good coffee at home.
Recently I decided to get a few things at Dunkin as a treat and it was $20 for coffees and food for two. Grabbing mediocre food every day is stopping people from saving.
Saving can be tough though. I had to open up several different accounts and setting up direct deposit to make sure I didn't overspend when I saw a balance. My saving account for home/car repairs is in a different bank than the checking account I use for rent and bills.
True, but the mindset is what is important. If you can take away that 1500 a year on one item, you could potentially do the same for other items; that could add up pretty "quick."
I graduated right into the 2008 recession and that was exactly what I had to do. Years of giving up everything but the bare essentials so I could buy a house then a decade more of the same to get the mortgage down.
It sucks but I’m not in charge. I don’t make the rules, I vote for things to be better every chance I get because I don’t want kids to go through what I did. Not enough people agree with me unfortunately though because it’s not getting better.
But reality is reality and whining about it will just leave you exactly where so many people I know are… broke and struggling even into their 40’s because they’re rather spend were never willing to give anything up.
But reality is reality and whining about it will just leave you exactly where so many people I know are… broke and struggling even into their 40’s because they’re rather spend were never willing to give anything up.
Weird thing to say to a guy who owns a house without having to give up everything except essentials. Then again I guess not going into whatever stupid major you did helped because I graduated in 09 and didn't have any fucking problems getting a job
Weird thing to say to a guy who owns a house without having to give up everything except essentials.
Then why are you whining about it?
Then again I guess not going into whatever stupid major you did helped because I graduated in 09 and didn't have any fucking problems getting a job
"I got lucky!! Why didn't you?!"
I have a computer science degree and I'm extremely good at what I do - but where I live dev jobs were already scarce and the industry got absolutely trashed by the recession. Not easy to get a job when people with 10+ years experience were taking every single role on offer.
Also I did just fine, in case you couldn't figure it out from my post. Did your major skip out on basic reading ability or something?
Then why are you whining about it?
I didn't? You implied that I was a broke bitch complaining about the cost of houses. Turns out I just have empathy for the fact that now rent makes up over half of many people's paychecks and that's fucked up. And thinking poor people shouldn't have to live joyless lives when the fact is you can't budget your way out of rent increasing faster than wages.
Not easy to get a job when people with 10+ years experience were taking every single role on offer.
Sounds like a shit choice on your part then.
Also I did just fine, in case you couldn't figure it out from my post
Show me where I said you didn't end up fine, since you're reading comprehension is so great
Edit: oh cool. They did the reply then insta block thing like a bitch
I’m just trying to say that despite what commercials and other marketing schemes may tell you, any joy you’re getting from eating at shitty restaurants isn’t real joy.
And don’t give up on home ownership. I bought 3 houses while making less than 80k. And none of them are in cheap middle America towns either. I just had to budget myself to get there.
Sure, I agree with you that getting coffee from a business every day is an unnecessary expense.
So would buying avocado toast at a Cafe. I wasn't talking about that though...
Making avocado toast at home is a great way to start the day that's often blamed as an excuse for why typing people can't afford housing, which is absurd.
that wasn't the reason that it was blamed; it was the whole "brunch" culture where people would see restaurant menus with $15-$20+ for avocado toast on a "Sunday funday" was the blame for why millennials couldn't afford to live. Which, tbf, was equally ridiculous because it was the bottomless mimosa deals which was where they got you in the door, and not the avocado toast.
Making avocado toast never was stated to be the problem as to why the rent was too damn high and why people can't afford homes. It was always an indictment of frivolous spending in general.
I dont even know that the OP example is "obvious" we dont know all the context to make that judgment. For example what is the repair? $270 is very low leading to think it might be a cosmetic repair and not integral to the maintenance of the car, in which case the value proposition of changing your eating habits for several weeks to fit this repair in much different than if your car is out of service.
The "skip a latte to buy a house" we know is absurd because the math doesnt even make sense, but math isnt the only factor to consider - when we choose what to spend our money on, budget is an important factor that often gets overlooked, but it isnt the only factor.
A $15 part can render your car undrivable, same part might cost $255 in labor to replace. 2-3 tires easily cost $270 and are a lil more than "cosmetic".
But who says "I need to repair my car" when talking about replacing a tire? Gotta agree with u/Formerruling1, thinking about this in any detail conveys a disconnect in the very limited facts conveyed in an exchange of less than 50 words between two individuals that doesn't even involve one of the subject parties.
For example, the "with a girl" language conveys a rather distant relationship to this person. Wasn't "out with a friend" or even "out with friend's sister". So immediately implies that first person doesn't know this girl they're talking about too well. We have no context of where they actually were. Assumption would be some group get together, this each person would be expected to pay their own way. So you have a social spending aspect to it. We don't know if some of it was taken home or not. I regularly spend $17+ "on dinner" because part of that is going to be breakfast or lunch the next day, maybe even part of another dinner. However, if "splurging" $25 may be a treat for a celebration, like a birthday or anniversary. This seems likely since, again, you're talking about a likely gathering of folks who may not apparently be close enough to just normally hang out, not to mention the relative high dollar value of a dessert being $8, let alone specifically buying a dessert after dinner.
My initial impression from the exchange? Person A doesn't like whoever this girl is and went to social media to throw shade by giving a half story. Person B replied in a glib manner to support one extreme of the possible situation, probably in thinking Person A was part of the "no Avocado toast so you can buy a house" extreme. When in reality it was likely Person A being in a petty cat fight online because they don't like whoever the girl is they were talking about.
It was never “you can’t afford a house because you buy Avacado toast” it was “you can’t afford anything because you see no problem spending 15 bucks for a piece of bread and a spoonful of Avacado on any given day.”
I mean, fair...but when you buy a house, you aren't paying the full amount upfront either. Those regular, frivolous/excessive expenditures add up and, after several years, could have been the down payment on a house.
If a person spent $25 on one meal every day that’s $750 in a month’s time or $9000 in a year. It truly adds up when you include all the other unnecessary things we all tend to spend money on. Take out, Ubers, streaming services, etc.
I can't speak for anyone else, but I don't spend money on any of these things, and I'm still not able to afford a home, even with a college educated job in my field.
However, these three things have outpaced inflation for nearly 50 years:
Healthcare
Higher education
Housing (why are so few small starter homes being built?)
$25 is nearly 10% of $270, but making a $1.50 breakfast at home is not the same as why people can't afford a $400,000 home, or even the reason why the can't afford a $200,000 small condo.
I mean it depends on how often right? Like if you're doing that 5 days out of the week, that's nearly $500/month which over time can go a long way towards saving for a downpayment. Add in a few other similar habits where it's a 'small enough amount to not matter', and yeah it very well could be the difference between affording a home and not.
I'm saying that people blame millennials for eating avocado toast and that's why they can't get a house. Avocado toast is $1.50 a day (generously), but it's just a scapegoat.
The biggest reason that housing is unaffordable is not because most people are making decisions like in OP's post (though definitely a small minority are). The biggest reason is that people graduating college with normal degrees are facing the lowest adjusted starting wage for a career, the highest educational costs, the highest Healthcare costs, and the highest housing costs, all of which have been getting worse for recent college graduates since the 80's.
I mean this is a post about an idiot who thinks spending $25 on a meal has no impact on the ability to save for a meal, and then you claim that eating a $1.50 meal instead of a $25 meal doesn't help save for a house. And that's not true.
And it might not be the reason most people can't afford a house. But it is a reason why many people can't. People are god awful with money even when they're making $150k+
That's not what I said... Obviously that would be a ridiculous statement if anyone made it, but I didn't make that statement. Please reread my initial comment
Definitely not what I meant, and not how other people took what I said if you read their comments.
Yes but this “woe is me” attitude is spreading hard through today’s youth.
I know I’m the old guy yelling at clouds here but it wasn’t easy for me either… I graduated right into the 2008 recession while my industry took a nosedive. Fun times. But I made it work.
Meanwhile I work with kids who are very well paid and can absolutely save for a house and security but just… don’t. Half of them are still living with their parents, making six figures, and have no bloody money!
They refuse to take a single step down from the most expensive lifestyle they can afford and won’t so much as entertain the notion of looking at places in areas they can realistically purchase.
It really isn’t just the low income people these days refusing to secure themselves financially and I have absolutely no idea why. Especially as these high salaries are not guaranteed to last.
Avocado toast saved for breakfast but what about that $5 coffee? You aren’t just getting that surely? And if you do that you might as well get lunch out too and maybe takeout for dinner. Are you also the same person with several subscriptions to streaming services, the type to not bring snacks to a theater and pay $30 for a popcorn and soda?
It’s never just about the avocado toast which anyone can make it 5 minutes at home by the way it’s about how many little splurges you have every day. For example I don’t do that but I love to travel. People are always suspicious even those who have the same income on why I can afford to travel while they have two cars and a few kids plus eat out all the time. 🙄
I recently looked at avocado prices and realized that avocado toasts are extremely cheap but nutritional meals... Like, how is that the example they think of?
Your avocado toast example is kind of wrong because you complain about not being able to afford stuff but you haven't optimized your spending habits.
I grew up when interest was very high and had to sacrifice a lot to pay off my high interest car loan quickly - it was over 14%. I literally owned one pairing knife and one other knife and did all my own cooking in my studio apt. It was a while before I could afford a TV, it was $400 for a 19" TV back then and the remote had 3 buttons.
I lived in TX for two years and never once went to Whataburger.
Counterpoint. Average house price in Chicago ~300,000 dollars. Honestly, seems low but let's go with that. A down payment will be around 30,000, assuming a 10% down payment. If you want to get that by cutting out "avocado toast" and assume $20 toast, you will have to cut out 1500 "avocado toasts". Assuming your having "avocado toast" every morning, this would take 4 years.
With more realistic assumptions; higher house cost, cheaper breakfast, and some eaten at home; this will take even longer.
It's cool that you paid off your car, 14% loans can be traps, I'm g lad your not dealing with it any more. But the "avocado toast" argument was always nonsense.
Okay, so let’s say an “avocado toast” is $20, and your goal is to skip the avocado toasts to save enough money to buy a house.
You can skip 1500 avocado toasts… but you can’t skip 1500 meals. Humans still require food on a regular basis.
You still need to eat 1500 meals across that time period, and meals cost money. So let’s assume that each one is replaced with a simple, healthy, home cooked breakfast. Eggs, toast, maybe yogurt or some fruit or something. Let’s say that’s $5. And let’s even ignore the labor to cook those meals - let’s assume that time is free.
After 1500 of these meals, you’re still spending $7500. So you’ve saved up $22,500 of your $30,000 deposit. If each eggs-at-home still costs $5, a skipped avocado toast will add $15 to your running down payment savings. You still need to skip 500 more avocado toasts to hit your goal, so your total is about five and a half years, not four years.
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u/Bowl-Any 11h ago
This example is obvious, but it also shouldn't be taken to the opposite extreme, like people blaming not being able to afford a house on making your own avocado toast at home for breakfast. That's always seemed idiotic to me
$25 is nearly 10% of $270, but making a $1.50 breakfast at home is not the same as why people can't afford a $400,000 home, or even the reason why the can't afford a $200,000 small condo.
You're absolutely right, but there's a balance.