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In Their 20s, Struggling to Save and Tired of Being Lectured About It


Shea German-Tanner tries to put a portion of her paycheck, even if it is only $50, into her savings account. But most of the time, she has to reroute the cash back to her checking to afford her expenses. Ms. German-Tanner, 22, has about $600 in her savings account right now and has not started saving for retirement.

“Everyone’s telling you to save money and do this and invest, and I feel like I can’t do that because I’m living paycheck to paycheck,” said Ms. German-Tanner, a social worker in Fort Wayne, Ind., who makes about $40,000 a year. She said she felt that inflation had impeded her ability to save money.

Young people who are just starting to get their footing as they enter adulthood are grappling with how to balance their incomes and spending priorities so they have money left over to save for emergencies and retirement. Worrying about saving has always been hard for 20-somethings who begin their careers at the bottom of their earning potential. But saving is especially difficult right now because on top of student debt, housing and food costs remain high even as inflation has started to cool.

Ms. German-Tanner said 20-somethings were often encouraged to take financial steps like build emergency funds, save for retirement and pay off debt. They’re advised to invest when the market is down and to start thinking about their futures as early as possible. The FIRE movement (an acronym for “financial independence, retire early”) has been glorified in recent articles, and videos about budgeting and saving in Roth individual retirement accounts have taken over TikTok.

“I feel like the older generation is constantly pushing you to do stuff like they did when they were in their 20s, but it’s not even comparable to when they were in their 20s,” Ms. German-Tanner said.

Theresa Fairless, a 25-year-old project manager in Aberdeen, N.J., said paying off student loans was her priority. Ms. Fairless graduated from college in 2018 with about $25,900 in government loans and $50,000 in personal loans. So far, she has paid off all her personal loans and has about $23,000 left to pay off in government loans because she has not been making payments during the student loan pause period.

“I was the first person I knew who had to deal with loans,” Ms. Fairless said.

She had lived at home since she graduated, and recently moved in with her boyfriend to an apartment nearby, but he is paying a larger share of the rent than she is because he makes more money. Ms. Fairless, who makes about $65,000 a year, also gives money to her mother each month since her father died recently and her mother does not have savings.

When Ms. Fairless was living at home, she gave her mother $300 a month. Now, she gives her $200. She also saves about $160 a month for retirement in a 401(k) plan, puts $100 in a stock portfolio and tries to save $50 to $200 in a savings account.

“I always wanted my emergency fund to be at $10,000,” she said. “I have it there, and I feel like I need it to be more. I honestly feel like I’m not just saving for myself — I’m saving for my mom because I know she doesn’t have one.”

For Thea Pham, a first-generation Vietnamese immigrant, sending money to her family is also a priority. Ms. Pham, 27, lives in Los Angeles with her husband. She works in finance and was unable to disclose exactly how much she makes because of regulations around her job, but she said most people in her position earned $160,000 to $250,000 annually.

She also has a TikTok account with more than 450,000 followers, where she posts about mental health issues. Ms. Pham acknowledges she has achieved financial stability, but said she did not have the flexibility to spend like friends with similar high incomes because of cultural expectations that she support her family in Vietnam.

“The majority of my paychecks are actually sent home to my family,” Ms. Pham said. “I didn’t know Americans don’t do that and how abnormal it is.”

Ms. Pham said most of her husband’s paychecks went toward paying their housing and living expenses, to which she contributes up to 20 percent. Any remaining money she makes goes into retirement and investment accounts, expenses like travel or when relatives ask for money.

Kathia Ramirez, 24, is juggling several part-time jobs while she prepares to enroll in college. Ms. Ramirez, who lives in Bensenville, Ill., in a house with her mother, sister and nephew, dropped out of school during the pandemic because she did not want to take classes online.

“I love living at home,” Ms. Ramirez said. “It does help me save money. I have a really good relationship with my family.”

Between her gigs working at a Mexican seafood restaurant, editing videos for social media and entering data for a manufacturing company, Ms. Ramirez said, she earns roughly $2,000 a month, though her income varies based on tips and how much she works. She saves $200 to $300 a month in a savings account. Otherwise, she spends money on groceries, gas and clothing. She hasn’t thought about saving for retirement.

Zach Teutsch, a financial planner and managing partner at Values Added Financial, suggested that young people focus on big spending choices instead of small luxuries like coffee or a subscription.

“Big decisions matter a whole lot more than small decisions,” Mr. Teutsch said. “Contrary to some of the advice out there, most 20-somethings should worry more about jobs, housing, transportation and less about lattes and Netflix.”

Mr. Teutsch said the time spent worrying about a small purchase could be better devoted to figuring out how to navigate your company’s 401(k) plan. He also emphasized the importance of building an emergency fund to cover unforeseen expenses. While many financial advisers suggest having three to six months of expenses saved, even $100 can “make a huge difference,” he said.

For young people, Mr. Teutsch said, it is a good idea to start self-educating on personal finance and talk about financial issues with friends or engage on social media and share how you save money.

“This is a great time to learn more about money and find unbiased educational sources,” he said.

Haley Persichitte, a 24-year-old in Denver, makes fitness and exercise a priority and spends money on Barry’s Bootcamp, CorePower Yoga and a ClassPass subscription. She has a monthly car payment and rent, and also likes to go out to dinner with her friends. Ms. Persichitte did not go to college and works as a house manager for a family nearby. She manages to save about $600 a month, mostly for emergencies. Ms. Persichitte has saved about $15,000 so far, though she said high food and gas prices had made it harder to save recently. Saving for retirement, she said, “hasn’t crossed my mind.”

Brian Teitelbaum, 28, has taken many of what he feels are the right financial steps: He has an emergency fund, has started investing money and contributes to both a 401(k) and a Roth I.R.A. Mr. Teitelbaum earns about $90,000 a year as a project manager in New York City, and he tries to use the subway and cooks at home to save money. His monthly rent is $1,650, and he spends around $300 a month on groceries. He said that he had not noticed inflation as much as people outside New York might, but that he paid attention to high prices at the grocery store.

Mr. Teitelbaum does not have any student debt and saves about $2,000 a month. He puts about $600 a month into his 401(k), $500 into his Roth I.R.A. and between $800 and $900 in investment accounts. Mr. Teitelbaum said automatically depositing portions of his paycheck into different savings accounts had helped him.

“I think my favorite thing about finance nowadays is auto deposit,” he said.

Mr. Teitelbaum also emphasized the importance of talking about money with family members. He said that he owed his father for providing him with much of his personal finance knowledge and that friends from families who didn’t talk about money did not have as much financial literacy.

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