Pop quiz:
- read the original post below and/or the original article at The WSJ. What huge data point is the writer missing?
- if you can answer that question, you will immediately see why this "credit card debt" is not as bad as it may seem. [Later: here's the answer.]
- hint: we've discussed it on the blog before.
- hint: a Forbes writer discussed this back in 2021. I'll post the link later [it's posted abovee]. The writer was "sorta" correct, but not really. [Remember, money is fungible.]
An unrelated note/comment:
- baby boomers and traditionalists (see below), all over the age of 60 now -- and all "seniors" by definition -- have lived their entire lives without "free money" -- Fed rate at zero percent -- the millennials have pretty much known nothing but "free money" and good times ... "seniors" learned how to budget;
- seniors didn't have Disneyworld; didn't have free money; didn't have huge student loans;
- seniors are living in homes for which are paid; most are now collecting social security and many don't need it; seniors, lower tax rates; kids' have left home;
- seniors have forty years of experience, good times, bad times; most have learned to survive;
- what I take from this:
- seniors better prepared for next five years;
- credit card debt -- all things being equal -- will be much more difficult for millennials than seniors to handle;
- generation X must be terrified; not much time to catch up; millennials -- at least the younger ones -- have more time to catch up
- seniors: more comfortable with savings than investing, are going to love money market funds at 5% plus
- answer to the pop quiz above will help immensely in better understanding all that is going on;
- the next question: do credit card (banks) have this figured out?
- the other day I was going to post a blog on credit cards but it was accidentally deleted and I wasn't in the mood to re-do it, but I think I have another data point.
Original Post
30-second / elevator speech: US economy in the hands of the millennials right now --
- millennials (born 1981 - 1996): 27 - 42 years old
April 16, 2022: how Gallup "defines" the generations [ages adjusted for 2023]:
- generation Z (born 1997 - 2004): 19 - 26 years old
- millennials (born 1981 - 1996): 27 - 42 years old
- generation X (born 1965 - 1980): 43 - 58 years old
- baby boomers (born 1946 - 1964): 59 - 77 years old
- traditionalists (born before 1946): over 77 years old
March 2, 2019: two "wings" of Millennials --
- generation Y (1981 - 1991) and generation Z (1991 - 2001).
- broad definition of "millennials": those reaching adulthood in the early 21st century. That's a very, very wide range. That would almost include some 30-ish year-old parents with teenage millennials -- in other words, millennials raising millennials.
How the generations got their names? Link here.
Now, today, from The WSJ -- credit card debt by generation: link here.
Oh, come on, give me a break. This is the example The WSJ is using to show why 30-somethings are piling on credit card debt. Oh, give me a break. This is the lede to insightful writing by The WSJ writers (LOL):
The Disney trip:
- two adults, four children
- Lincoln, NE: round-trip, high season, $800 / person; 6 x $800 = $5,000
- local transportation: rental or Uber -- $600
- three days, four nights rooming: $500 x 4 nights = $2,000
- meals: $200 / day x three days = $600
- trinkets for the four kids: $500
- trinkets for the parents: $2,000
- tickets for each: $150 x 6 x 3 = $2,700
- subtotal for the Disney trip: $13,400
- assuming it's paid off over six months at 25% carrying interest: $445.
- total: $13,845.
Local museum and zoo trips.
They had outstanding student loans: $160,000 -- betting that courts would uphold Biden's reprieve.
The next story:
First question: why couldn't her parents take care of the kids instead of $1,200 / month for child-care?
As soon as they blamed "inflation," ... but no, it got worse ... their problems began with ... stick with me ... shampoo.
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