Why can’t today’s 30-year-olds stop spending?

Jun 24, 2024
Why, if times are so tough, are younger generations spending money like there is no tomorrow? Source: Getty Images.

I played golf with Des on the weekend.

Des had on these brand-new white leather Footjoy shoes. Footjoy, for male golfers, is kind of like Christian Louboutin, for fashion conscious females.

Anyway, Des says that he is 80 years old. I don’t believe him because he looks super fit, has an amazingly positive attitude to life, and still hits the ball more than 180 metres off the tee.

It’s a thing in golf to tease people who have white shoes, that is until the shoes start to get dirty. We were joking with Des, when he dropped this gem.

“These shoes cost me $380 – well really $340 with the club discount. That’s more than I paid for my first car!’’

If Des IS 80, then he probably bought that car back in the early 1960s. Imagine that. Think back to your first car. How much did you pay for it?

Mine was a Holden Sunbird. Car website drive.com.au, in a retrospective review, described the Sunbird as a “gutless wonder doomed to fail”. That’s a fair description, but I still loved my red Sunbird with its black plastic spoiler glued to the boot to help keep that four-cylinder beast on the ground. Dad and mum bought it from a family friend who had won it in some kind of charity raffle. I paid them back, a little every week, until the $4500 price tag had been covered.

That car lasted me almost 10 years, and when I traded it in on a Mitsubishi Express I got about $1000 back.

When I was sharing Des’s story, and my first car story, with my youngest daughter Grace she boldly announced that her generation was trying to survive the toughest economic times that had ever been dished up to a cohort of 30-year-olds.

“Today’s 30-year-olds are the first generation in more than 47 years where most people don’t own a house,’’ she said.

“In 1990, the average mortgage was three times the average wage for a 30-year- old. Today, it is eight times.’’

When I bought my first house in 1980 – for $53,000 in Albion Park Rail in NSW – my mortgage was $30,000. So, it is easy to understand that Grace has a point. Why then, if times are so tough, is Grace’s generation (not Grace to be fair) also spending money like there is no tomorrow. Have they just given up? Or is it just too hard to go without the good things in life?

I think that the real generational difference between 30-year-olds in the 1980s and 30-year-olds today is that my generation was raised to be frugal. In the 1980s, we went without things – all the time, in order to either save for a mortgage or to pay off a mortgage as quickly as possible. Thankfully, that was one of the lessons embedded in my DNA by my mother. Her motto was “never buy anything you can’t pay cash for”.

Let’s start by looking at food and drink in the 1980s versus today – both dining out and takeaway food. Australians today spend about 30 percent of their monthly incomes on food and drink purchases. That’s either going to a restaurant, ordering takeaway, or buying coffee. That means, on an average wage with two people working, couples are spending about $54,000 (according to the 2024 Hospitality Insights and Dining Dynamics report) on takeaways and dining out each year. One coffee a day will set you back more than $2,000 a year. Trust me, it adds up quickly.

Today, in the suburb in which I live, there are 25 dining options within four kilometres of my front door. Back in Albion Park Rail in 1980, there were two – the Oaks Hotel and a Chinese restaurant that was reserved for special occasions. That plethora of dining options only exists today because there is demand.

I was watching Tracy Grimshaw and medical expert Dr Nick Coatsworth’s fabulous Channel 9 show this week – Do you want to Live Forever – and one of the participants Eliza (38 from Melbourne) admitted that she ordered takeaway at least 10 times a week. It’s impossible to do that … and save.

I know it is boring by today’s standards, but we cooked every night back in the 1980s. I made sandwiches to take to work every day. And coffee, called International Roast, came by the kilo in a giant tin – all you needed to do was add hot water, a splash of milk and a few sugars to improve the taste.

What about home, entertainment and technology expenses! For most of the 1980s, the internet didn’t exist. So, we weren’t paying for streaming services. We watched Free To Air TV. No-one had mobile phones with costly data plans. Most households had one television and a video recorder. We didn’t have things like dating apps, which cost about $50 per month. We weren’t paying gym memberships and Pilates classes weren’t even a thing then. We used to mow our own lawns, wash our own cars, and an overseas holiday was not considered to be an annual break, it was a luxury that took several years to save for.

We were conditioned not to spend money, unless we had to. Today, if you do all or most of the things listed above, you will be outlaying close to $800 a month. And most 30-year-olds would describe these things as essentials.

There is no right, or wrong, in this discussion. Except to say that at some stage you have to go without. Des, my golf buddy, went without as a young man and now he can afford to buy the most expensive golf shoes on the market. Today’s 30-year olds just can’t keep spending without at least considering what their retirement will look like. That’s a very slippery financial slope.

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