Are we in a minority?

[EEinNJ]

I followed that link, and I think that the study they are basing it on is highly suspect. They are basing these statistics on only 1135 workers! Further, they don't break down how old they are (other than older than 25), how much they make.

There are billions and billions of dollars invested invested in equities and mutual funds, not just by big banks and pension funds, but individuals and employer sponsored plans. Where is all this money coming from, and how would Schwab, etc. stay in business otherwise?

What often drives "scary statistic" articles like these is the financial service industry trying to get more of your money under their management. They would have you believe that a typical middle-class wage earner practically has to be a 401k millionaire to be able to retire. That's a great goal, and I hope I get there myself, but the reality is the vast majority of retirees are not.

I've heard there's a proposal to make employee 401k plan participation an "opt out" choice rather than "opt in" as a way to increase participation. Again, this is a bone for the investment managers, since the managed employee plans take much more of a cut than doing it yourself.

If they really wanted to help workers, they would eliminate things like "means testing" for qualified plans and caps on contributions to 401ks, IRA's, and Roths.

[jIM_Ohio]

I followed that link, and I think that the study they are basing it on is highly suspect. They are basing these statistics on only 1135 workers! Further, they don't break down how old they are (other than older than 25), how much they make.

There are billions and billions of dollars invested invested in equities and mutual funds, not just by big banks and pension funds, but individuals and employer sponsored plans. Where is all this money coming from, and how would Schwab, etc. stay in business otherwise?

What often drives "scary statistic" articles like these is the financial service industry trying to get more of your money under their management. They would have you believe that a typical middle-class wage earner practically has to be a 401k millionaire to be able to retire. That's a great goal, and I hope I get there myself, but the reality is the vast majority of retirees are not.

I've heard there's a proposal to make employee 401k plan participation an "opt out" choice rather than "opt in" as a way to increase participation. Again, this is a bone for the investment managers, since the managed employee plans take much more of a cut than doing it yourself.

If they really wanted to help workers, they would eliminate things like "means testing" for qualified plans and caps on contributions to 401ks, IRA's, and Roths.

another forum I posted to checked the study

200+ were retirees
900+ were workers which varied in age
the % error given was 3%

[disneysteve]

They are basing these statistics on only 1135 workers!

If you look at almost any survey on any subject, the sample size is typically around 1,000 people. Properly selected, that number is large enough to accurately represent the overall population.

[Radiance]

Plus, just by talking to my friends I can super confirm that statistic. Who can save? we all need paycheck to paycheck, nobody has money, etc etc.

[maat55]

[QUOTE]

That's all true. I'm not denying that there are things to spend money on today that didn't exist 20 or 10 or even 5 years ago. My point is that 40 years ago when I was little, there were also things to spend money on that didn't exist 5 or 10 or 20 years before that. Innovation and gadgets and luxuries aren't new.

I agree with your point. It just seems as though there are more temptations and places to get them than ever before.

[frugalgirl]

My suggestion is that every parent out there make it their personal goal to raise a generation of financially responsible kids. The way a child thinks about money is directly influenced by how the parents think about money. Parents need to start educating their children about the value of a dollar. My grandparents - the generation that lived through the Great Depression - were fanatical about saving, re-using, and being thrifty. My parents lived through paying 14% mortgage interest on their businesses and put every dime possible to paying that off, bought used cars, had a budget, and paid with cash. They also made me work summers for college money starting when I was 12 years old. My kids are required to do chores, are required to earn money to buy luxuries (like gaming systems, cell phones), and are shoveling snow, pulling weeds, and mowing lawns to earn extra money. They are 9 and 12 years old. They know how much our mortgage is, how much we pay for their private school tuition, piano lessons, sports, etc. They work hard in these activities because they know how much things cost, how hard we are working to provide these things, and what we/they are giving up to have those things. They are discerning buyers because we require them to use their own money to buy "luxuries". They only get gifts at Christmas and on their birthdays. We provide everything they need. They "provide" extras and truly appreciate and take care of the things they WANT. They are part of conversations like, "if we want to have enough money to go on special vacation Y, then we cannot send you to summer camp X." They are part of the decision-making on some spending decisions. They also understand how much college tuition costs and our long term savings strategy for getting them through college. In contrast, the neighbor kids are out playing while their parents and elderly neighbors are shoveling, weeding and mowing. Their school peers have barely, if ever, done a household chore in their lives. The lost and found at the school is overflowing with coats, shoes, gloves, lunchboxes, etc. because, apparently, these kids have at least 2 of everything. My kids only have one winter coat, one set of dress shoes, and one pair of gym shoes at a time. That makes them responsible for their things. Could we afford more? Sure. But we don't NEED more. Many (if not most) parents give their kids every gadget known to mankind. There are third graders at my kids' school that have fancier and better cell phones and cell phone plans than my husband and I do. These kids have absolutely no idea how much their parents spend on anything. They get everything they want and have become accustomed to designer clothes, top-of-the-line gadgets, and the luxury lifestyle that their parents may or may not be able to afford. Do you think these kids will be able to live with less? Do you think that they appreciate anything they have? I hope that my kids will be well prepared to be financially responsible adults. I hope that they will appreciate what they are able to afford, will be able to live with what they need, and be able to live without things they may want but can't afford. They have heard plenty of discussions about budgets and money. They are okay if we say no to something. They are very excited and appreciative over the little luxuries that sometimes come their way. Here's hoping this parenting strategy actually yields the desired outcome!

[disneysteve]

They are 9 and 12 years old. They know how much our mortgage is, how much we pay for their private school tuition, piano lessons, sports, etc. They work hard in these activities because they know how much things cost, how hard we are working to provide these things, and what we/they are giving up to have those things.

This is a great point that I rarely see mentioned. I've posted before that our daughter who is now 14 balances our family checkbook each month. It started about 5 years ago as an arithmetic exercise but grew into a financial lesson. She started asking questions about what different entries were, why certain things cost so much, and came to gain at least a teenager's understanding of what is involved financially in running our household. So when something comes up that she wants and I say it costs too much or we really can't afford that, the comment doesn't come out of the blue. I can explain that if we choose to spend money on that, whatever that may be at the moment, we'd have to take that money away from something else it currently goes to.

I think far too many parents don't take the time to teach those lessons. In fact, some intentionally keep the financial data private from the kids. They don't tell them what they earn. They don't tell them what things cost. I think that's a mistake.

[elessar78]

The same with a lot of other baby items I refused to spend money on. (crib, stroller, changing table and, of course a theme decorated nursery) I didnt need, nor did I want any of those things, but most my friends bought all, including a Van because they were told to by "friends and family" that you HAVE TO. because babies NEED A LOT.

Ha ha. Maybe you can run a seminar for my wife! I love her but we can't agree on why matching themed sheets and curtains are necessary for the baby. I'm certainly not willing to drop $130 for the set without a strong discussion.

[Radiance]

Some womanly advise, acknowledge her desire before you fight back...

Now, the themed nursery is for her and perhaps to brag with friends. (other moms feel free to jump in if you disagree) $130 buys a lot of cute clothing and other stuff for the baby that she can brag with as well. OR.. you cna open your baby his first savings account!

Is your wife's birthday coming soon? maybe you can give her the nursery as a $130 birthday present? Or an advanced anniversary present, mothers day is coming soon....? The point is for her to see how this is for her, the baby would prefer to sleep with you guys.

The first colors a baby can see are red and black and they need big contrast such as checkers patterns... imagine a nursery like that!

I met an awesome group of women who really know what babies are about, they are members of my local attachment parenting group. That is where I first heard the idea of cribs being a want and not a need. I was in shock!

Visit them at attachmentparenting.org, maybe they have a local chapter close to you. Very cool practical, wise mommas.

[wnlbutterfly]

I like that...."it's not for the baby but for mom". SO TRUE!!

I never went crazy with baby stuff for any of my kids. With my daughter I bought a lot of outfits but got them all at a second hand children's store. With the last one the only thing I had left was the crib and I knew he would be the last baby, so everything I bought I got second hand. I called him the bargain basement baby.

Teaching kids what things REALLY cost and how a household budget works is so important. It is one of those life skills that they NEED, yet we don't address it at school unless you take an elective with a great teacher like my DD.

[fe2o3ez]

I would rather be in the minority and lead by example in this case. We can't change others' spending habits, they need to learn the consequences on their own.