My first house cost me 75k. With taxes I was spending 1k a month for a 3 bedroom 2000 sq/f home. Purchased in 1998. Sold home for 120k in 2003 and bought a 2500 sq/f home for 150k. Paid off said home in 2015 or so. For the second home my payment and taxes was $1200. Utilities in this home run me about $500 in the summer for gas, electricity, water, trash, internet, cell phone. Family spends less than $400 a month on groceries and I drink a lot so could spend less if I wanted. Most recent home costs me 2K a month including all utilities and note with about another 750 a month in taxes and will be paid off in 2 years.
The issue is younger people wanting to live like their parents. Only they don't understand their parents worked up to where they are now and too many younger folks want it all now and don't want to work up to it.
It's tight for young folks. It always has been. It was tight for my parents when they were young, single income coming out of the navy. It was tight for my spouse and I coming out of college even though we were dinks, (double income no kids). But we budgeted, paid things off, never had a car loan, (because we saved up and paid cash), and invested early. Now we are plugging along very comfortably other than possible corona layoffs but that will be temporary. Live like no one else so later you can live like no one else. We did it on less than 100k combined income for the first 15 years of our marriage. Two teachers married make over 100k as FIRST year teachers. Budgets!
Situation: Be young. Graduate at 22 years old.
Make $50k a year.
Pay monthly $1500 in rent, have a paid-off car, have to pay another $1000 in various ESSENTIAL bills such as cell phone, internet service, power, gas, water, and student loans.
Eat at home every single night. Never go out.
Oh wait - then how do you meet someone with which to have said kid? It won't happen. So you go out - frugally. $100 a month for a drink or meal here or there.
You're now paying $2600 a month before you factor in food, gas, car insurance, clothing, or bills. You're pulling home about $3300 a month after taxes already.
If you spend $400 a month on food and necessities, you're now adding $300 a month to your savings. By my math, that means you need to do this for 100 months - 8 years and four months - to save enough to pay for one kid's college education. Assuming, of course, there are ZERO emergencies wiping out savings in that time. Assuming that your now 15+ year old car needs no work.
Your privilege is showing. Learn how real life works for recent graduates, not people who have their lives in order already.
Don't buy a new car(s) every 3 years,
Don't buy a $250,000 house,
Don't eat out every night,
Don't run up your credit cards with reckless spending...not using credit cards at all is even better,
Figure out the difference between "needs" and "wants"....eliminate the "wants".
Stay out of financial trouble by avoiding it in the first place...don't spend irresponsibly...learn how to budget and stick to it.
You'd be surprised how quickly $30K becomes available.
Because most young parents have half a year’s salary in the bank.