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Is it becoming normal for part-time and hourly employed people in their 20s (not college students) to spend most of their income on rides and meals out? If someone works 8 hours, spends 2 of those hours-worth getting to and from work, and 1 or 2 hours-worth on food, especially if it is delivered, then there is no possible way they can ever afford normal living expenses. (I also know that getting a full-time job with healthcare coverage will be important soon.)

But I hear that among people in their 20s with no car, this is the norm. Do they figure it out eventually, or are they going to be stuck this way? I'm genuinely concerned, this is not a rant.

Ride services and delivery were not common and affordable in the past, so this is definitely increasing. I would like to know how many people in their 20s live this way, then 30s and so on.

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    How would we know other than waiting 40 years and then asking them in their 60s whether they did or not? Commented Sep 26, 2022 at 10:56
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    I don't have that much time.
    – user82816
    Commented Sep 26, 2022 at 11:28
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    My guess (probably doesn't qualify as an answer): Some will figure it out, some will be stuck.
    – glglgl
    Commented Sep 26, 2022 at 12:09
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    I think it has always been normal that many people in their 20s don't save money. But it is also normal that many do. You need to choose which you want to be.
    – minou
    Commented Sep 26, 2022 at 12:13
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    You mention saving prominently in the text of the question ("...then there is no possible way they can ever save anything."), so that's probably why people are so focused on the savings aspect. Beyond that, I'm struggling to understand your question. What does it mean to you to "deal with "normal living expenses?
    – Nobody
    Commented Sep 26, 2022 at 12:55

2 Answers 2

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Unfortunately, there is no single, definitive answer to a question like this. All you can really do is to lay out the arguments for and against saving and make a personal judgement based on them.

There are two main arguments for starting early. The first is that saving early maximizes the length of time your savings have to grow through compounding. The second is that if you develop good habits early on, those habits will stick with you for the rest of your life. So, the theory goes, if you develop a habit of careful budgeting and setting aside a little extra while you are in your 20s, then by the time you get to your peak earning years, saving for the future will already be second nature for you.

The argument against starting early is based on the idea of consumption smoothing. At the start of your career you are earning much less than you expect to be once you become more established. The theory here is that it makes little sense for your present, relatively poor, self to transfer money to your future self, whom you expect to be relatively richer. There is a lot of sense to this argument, but of course it rests on certain assumptions about what your future will hold, and you never really know for sure if those assumptions will be borne out.

My experience was that I spent most of my 20s in graduate school, scraping by on about $17k per year. Needless to say, I didn't save a lot during that time; I thought I was doing pretty well just avoiding going into debt. I don't think the late start hurt me that much. The more important thing was that when promotions and pay increases did come, I didn't increase my spending right away, and before too long I had some decent savings going. Resisting the temptation to expand your lifestyle expenses every time you get a raise will do more to get you to financial security than ascetic living during the first few years of your career will.

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    The ability to compound savings is predicated on the current financial system, which is absolutely not guaranteed to continue to exist as it's arguably falling apart by the month. Actually since around 2010, savings have not been able to compound at any reasonable rate, but have only just started being able to again, but on the other hand, the currency in which you are saving may be worthless in a couple of years. Consuming immediately provides certainty about how much you consume. Commented Sep 26, 2022 at 14:22
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    @xxx Apartments are quickly becoming out of reach for anyone. do you prefer to be homeless with or without restaurant food? Commented Sep 26, 2022 at 16:36
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    @xxx I might talk to them about various strategies for the capitalism game. I certainly wouldn't just tell them "overspending = bad". It's one valid strategy, with pros and cons. If you live in Europe, you just lost 30% of your money in the last few months. Wouldn't you rather have spent it before you lost 30%? But in a parallel universe, you gained 30%. Commented Sep 26, 2022 at 18:04
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    @xxx That's an entirely different question, and might get traction if you posted as such: "What can I say to try to convince my friend to stop overspending?" But to be perfectly frank, that's also not your business. Personal finance must reflect your own financial goals, and without knowing this person's income + expenses + short & long-term goals, no useful info can be provided except for "well, yes, spend less money than you make". Commented Sep 26, 2022 at 18:06
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    @Grade'Eh'Bacon I don't agree that it's not their business. Sometimes people (including xxx) are unaware that a better alternative to their status quo exists. In this case, discussion can be helpful for them. xxx shouldn't be condescending though. Commented Sep 26, 2022 at 18:11
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What other people are doing should not have much bearing on how you choose to act. Someone else's spending habits don't impact whether you are able to meet your own monthly budget, or your near/long term financial goals.

This applies to you possibly trying to show your friend that their behaviour is 'abnormal' relative to their peers (or even their historical peers from prior generations), and it also applies to your friend possibly trying to justify their spending habits by saying that it is 'normal' relative to their peers today.

Have you or your friend run the numbers to see the difference in daily costs of car ownership [including purchase, repair, insurance, gas, and parking] compared to ride sharing? I suspect that daily 2x ride-share use is probably far higher than at least partial public transport, but depending on where they live, it may not be higher than personal car ownership. Note that the equation here to calculate a particular decision is not 'am I spending more on ride sharing vs my peers?', it is 'am I spending more on ride sharing compared with other possible transportation options?' You can't do anything about the behaviour of your peer group, you can only change your own habits.

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  • @xxx That is purely a question of that person's monthly budget. If their roommate spends the same way, but their next door neighbor doesn't, and their cousin across town does, but their coworker doesn't... None of that matters. If your monthly expenses exceed your monthly income, you will either dig yourself into debt, or worse. The 'average' young person's habits doesn't magically turn your own monthly cash loss into a cash gain. Commented Sep 26, 2022 at 17:32
  • @xxx that's a question of politics or economics - nothing to do with how you should treat your own personal finances. As such, this is not on-topic for this site. Commented Sep 26, 2022 at 18:03
  • @xxx If your friend isn't coming to you for help, I don't see how you will be able to offer meaningful advice. It isn't even clear to me that you have enough info to meaningfully get specific feedback to transmit to your friend. It also doesn't seem like you are informed enough on the topic to be seen as a source of good information - at this point all you have to offer your friend is "these people told me online that you shouldn't spend more than you make." Commented Sep 26, 2022 at 18:09
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    @xxx Google "how to make a budget", learn to do it yourself, and then teach your friend. At this point you are just trying to complain about someone doing something you think is wrong (though you are simultaneously asking if it isn't wrong after all). Commented Sep 26, 2022 at 18:13
  • @xxx Please re-read my answer. Whether it is a trend or not is irrelevant to how you choose to personally live your life [or how your friend chooses to live their life]. Commented Sep 26, 2022 at 18:38