Messy world saps desire to save for uncertain future
In a tumultuous time, many adults under 35 have stopped playing it safe. Instead of banking as much of their pay as they used to, they’re saving less, spending more and pursuing passion projects or risky careers.
Nimarta Narang, 27, said she was prudent about almost everything until the end of last year, when she had an epiphany: “I don’t want to spend my life being so careful and cautious.”
For most of the coronavirus pandemic, she couldn’t travel to Bangkok to see her family. When she finally made the visit, she was struck by how much she had missed: her mother’s 50th birthday, her grandmother’s funeral, her sister’s engagement, her father’s beard going gray.
“Coming back to the U.S., I realized I needed to do things differently,” said Narang, a literary editor at Brown Girl Magazine.
One thing she had always wanted to do was to live in New York. She packed up everything in her Los Angeles apartment and made the move in March. She also took a new approach to her finances. Before the pandemic, she said, she was putting about $2,000 into her savings account each month. Now it’s half that amount. The rest goes toward a costlier apartment ($600 more in monthly rent), evenings out with friends and small indulgences she would have denied herself before.
“I wanted to use my savings to have a life experience,” she said. “Visiting home made me see how much life I had missed.”
She’s not alone. A recent study by Fidelity Investments found that 45% of people ages 18 to 35 “don’t see a point in saving until things return to normal.” In that same age group, 55% said they have put retirement planning on hold.
For some like Narang, the isolation of pandemic life triggered the decision to enjoy the moment, financial consequences be damned. For others, the motivation has come from worries over climate change, Russia’s invasion of Ukraine, domestic political instability, soaring inflation, through-the-roof housing costs and a topsy-turvy stock market.
Hannah Jones, a stand-up comic in Denver, said she used to save almost all her discretionary income. She was a thriftshop regular who refused to pay for a Netflix subscription. Now she has become what she calls a “financial nihilist,” meaning she puts significantly less into savings.
The shaky state of the world has been on her mind.
“I’m not going to deprive myself some of the comforts of life now for a future that feels like it could be ripped away from me at any moment,” she said.
In her stand-up act, Jones, 27, has a reliable joke: “No, I’m not saving for retirement. I’m going to spend my money now, while we still have a supply chain at all.” It’s a quip that changes with the headlines. On some nights, instead of “supply chain,” she simply plugs in the catastrophe du jour.