Are Dinks saving or spending? Take a guess.

by Kristina on May 29, 2013 · 8 comments

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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{ 5 comments… read them below or add one }

1 E.D. May 29, 2013 at 2:04 pm

We are saving a lot (maxing out 401ks and an extra $1500/month towards planned expenses) and throwing money towards the mortgage, which is our only remaining debt.

We’re hoping to have the mortgage paid off in a little under five years, but I’d love to have it paid off by Feb-March 2016, which is when we both turn 40. That would probably take a windfall in terms of my stock options and large raises besides. Still, having the mortgage paid off in 13 years (five years from now) is still good.

2 Christine @ ThePursuitofGreen May 29, 2013 at 3:41 pm

Thanks for writing this article:p I fall exactly in that range and it feels good to know that my generation is doing well with what they have. I have spent money just because I was in the mood, and also not spent money on something I really wanted. Usually the time comes when I haven’t spent any money on purchases that I have an impulse buy. I try to get it under $20 though! I usually end up waiting and waiting for months before doing so.

My husband and I are working hard on saving for a down payment on a house, we only have a car loan, and trying to ramp up our retirement savings.

3 Crystal @ Prairie Ecothrifter May 30, 2013 at 5:23 pm

We balance saving and spending pretty well I think. We save 20-30% of our money for retirement and cash savings accounts. We spend about 60% (that includes taxes). And the other 10-20% has been used to pay off mortgage debt. One house is paid for (our rent house) and we have our actual home left to pay off.

4 Carrie Smith May 30, 2013 at 5:41 pm

I don’t find it surprising that this generation is saving more money. Heck, we will be the ones without any social security to draw on and will have to fend for ourselves in retirement. We’d be stupid to not learn a bit more about our finances than the previous generation. For me personally, I’m definitely a lot more in tune to my finances and my future than my parents or grandparents ever were.

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