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
Demographics here.
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.
As if we didn't need yet another graph, but
here it is:
