On Wednesday, Elite Daily writer Lauren Martin wrote an essay called, “If You Have Savings in Your 20s, You’re Doing Something Wrong.” Based on the title, you might guess that Martin is a middle-aged professional whose life experience has taught her it’s a mistake to prioritize saving money in one’s youth, and who wants to share her hard-earned wisdom with the millennial generation. In fact, Martin is a twentysomething without savings who feels confident making assertions like, “When you’re 40, you’re not going to look back on your 20s and be grateful for the few thousand you saved.”
The fact that Martin’s advice is grounded not in first-hand knowledge but in her lively imagination should persuade you to take her argument with a grain of salt. But in truth, Martin barely has an argument. There is perhaps a case to be made that the advice often given to twentysomethings—to save as much as you can—is shortsighted and unrealistic, but Martin has not made that case.
It’s hard to know where to start with this essay, which has inexplicably been shared on Facebook 18,000 times so far, so I’ll just pull on a thread at random. Martin seems unaware of the basic principle behind the common advice to start saving for retirement early: compound interest, which causes your savings to grow exponentially over the years. As countless personal-finance articles will tell you, starting to sock away money in your 401(k) or IRA when you’re 25 will leave you significantly wealthier when you’re ready to retire than if you’d started saving at 35. Now, you could certainly make a case that the models on which this advice is based aren’t reliable—the stock market doesn’t grow at a steady 6 percent, and if the market falters right when you approach retirement, you’re out of luck—but the fact remains that middle-aged people who started saving early are “grateful for the few thousand you saved,” because those few thousand have since grown to several thousand or more.
But let’s set aside saving for retirement, since Martin apparently thinks that people who plan for retirement are somehow “planning for their death.” (Grappling with the meaning of mortality is above my paygrade.) Martin also argues that the need for a “safety net” is a lie perpetuated by millennials’ parents (the “they” in the following unhinged passage):
They want us to save because it provides us with a safety net, but that’s exactly why we shouldn’t. Their need for us to have a safety net is just a giant metaphor for the difference between our parent’s generation and ours. … We’re not trying to live with safety nets; we’re trying to live on the edge.
By “we,” Martin is apparently referring to all twentysomethings, even though many twentysomethings (like yours truly) do not recognize themselves in a single line of Martin’s essay.
First, let’s stipulate that the term “safety net” does not just refer to personal savings (although a few months’ worth of living expenses socked away in a savings account can certainly serve as an indispensable safety net for people who lose their jobs or have a medical emergency or other unforeseen expense). A safety net could be some combination of personal savings, governmental benefits (like unemployment insurance and food stamps), and social connections (friends or family members who could spot you money if you needed it). However, many people don’t have social connections they could tap for money, and for those people, having savings makes life a whole hell of a lot easier when disaster strikes. To think of a safety net as being optional, you have to be either so unaware of your own privilege that you take for granted that your rich parents could bail you out if you needed them to, or you have to be so out of touch with reality that you literally think you’re invincible enough to live on the edge without ever falling off of it.
Martin seems to be the latter, because she advises twentysomethings to “bet on yourself,” as though spending money today somehow constitutes an investment in one’s professional future. “$200 a month isn’t going to make the dent that a $60,000 pay raise will after spending all those nights out networking,” she writes, as though a $60,000 raise is a foregone conclusion if you just try hard enough (and spend enough money, apparently). Based on my experience in the real world, it’s not lack of a belief in oneself that’s standing between millennials and $60,000 raises—it’s the fact that virtually no one gets a $60,000 raise overnight, except for those in a few lucrative fields. Nationally, wages have stagnated for decades, while the cost of education, health care, and housing have risen. Sure, many people see rapid career growth in their 20s, but it’s a terrible mistake for you to bet that you’re the one who’s going to buck systemic trends and make it big. (This is not even to address the fact that saving money and networking are, contra Martin’s implication, not mutually exclusive.)
I would like to continue to lay into the logical fallacies and inappropriate first-person plural of Martin’s essay, but then we’d be here all day. Instead, I’ll note that just because Martin’s argument is incoherent doesn’t mean the conventional wisdom she’s railing against—save as much as you can in your 20s!—is appropriate for everyone. Many people literally cannot afford to save in their 20s, because they barely make enough money to cover their basic living expenses. Many people carry enormous student-loan debt that wipes out the portion of their paycheck they’d prefer to put in a 401(k). And many people, like Martin, expect a certain quality of life and are willing to save less (or not at all) in order to attain it.
So my advice to any twentysomethings reading this is to try to be realistic about your long-term earning prospects, save as much as you can without wrecking your quality of life, and don’t beat yourself up if you’re not saving (or earning) as much as you think you should. But if you think it’s hard to save when you’re single and childless, just ask the nearest parent how much money they save each month.