Good morning Dinks. Today we are discussing our disposable income, or in some cases our not so disposable income. Sometimes peoples spending and savings habits are directly related to their income and sometimes peoples financial habits are related to an emotional or mental state. Have you ever made a purchase just because you were in the mood to spend money? Let me ask you another question, have you ever not purchased something that you really wanted just because you couldn’t bring yourself to spend money and watch your account balances go down?
I am sure that we have all been there – on both sides of the spending and saving fence. We are Dinks, we are dual income households with less necessary expenses than the average family because we don’t have kids. This theory tells us that we should have a high disposable income and therefore we should be saving like crazy. Or, maybe
So which one is it – are Dinks spenders or savers – what do you think?
According to our friends at Save Up young adults (ages 22 to 32 years old) are keeping money in their savings accounts and paying down 57% more student loan debt than previous generations such as Gen X or Baby Boomers.
Did we learn from our parents mistakes or are we paranoid?
Young adults and recent college grads may be lower wage earners than more experienced employees in their 40s and 50s who are more established in their careers. However, we are saving more than the older generations and we are paying off our debt at the same time. Save Up reports that “young adults are taking a balanced approach to managing their finances.
Maybe you learned to be financially responsible from watching your parents make mistakes with money when you were younger, maybe you had no choice but to become a financially responsible young adult because it was embedded into your brain as a child or maybe you have experience the recent market crash first hand and you are reluctant to spend money because you don’t want to live through a period of uncertainty again.
The best financial advice from a younger generation
If you told my parents that I could team them a thing or two about money they would probably laugh in your face because older generations rarely feel that they can learn anything from the generations that came after them, but according to SaveUp this is just not true.
Despite possible lower incomes young adults are more responsible with their money. We find a perfect balance between paying off debt and saving. As a financial planner when I ask my clients why they aren’t saving they say it’s because they are paying off debt. But the truth is that you can do both.
If we live on less and try not to have it all then our budget can afford to pay off debt and save money at the same time. Very often I see people rack up debt and then use their savings to pay it off but that is an unnecessary and to be honest, a bad financial habit. If you are deciding whether to pay off your debt or save money – don’t make a choice, you can do both!
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