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Gen Z couple learns how much money they'd need to earn to buy a house and can't stop laughing

"That is diabolical."

Photo credit: Canva

Gen Z couple learns what they need to make to have Boomer buying power

Buying a home is a big financial commitment. The cost of housing has increased to astronomical levels, so much so that years of saving, planning, and settling for less than you'd like are the only ways to achieve the dream of owning a home. Maybe. But this wasn't always the case. Boomers were once able to afford buying a home on much less income. Maybe not minimum wage, but even minimum wage earners had significantly more buying power then than they do now.

One Gen Z couple did the math on how much minimum wage would need to be in 2025 to have the same buying power, and the figure is staggering. In the late '60s through mid-70s, when many Boomers were purchasing their own homes, minimum wage was just $1.60, before it was raised to $2.10 in 1975.

Gen Z; Boomers; Millennials; housing prices; housing markets; boomers buying power; Gen Z home buying "Celebrating their new home with joy and a smile!"Photo credit: Canva

Nikki and her partner Derek reveal that in order to equal the purchasing power of Boomers, the minimum wage would need to be $66 per hour. The couple is hoping to buy a home in the future, which got their wheels turning on how the current wages compare to the wages Boomers were making. But with a number like that, the only logical thing to do was laugh. It's almost hard to believe that if wages kept up with inflation, minimum wage would be over $50/hour for reasonable—not even fancy—accommodations.

A lot of people joined in on their nervous laughter and shock, with one person saying, "I don’t even make $66 an hour with a master's degree in a healthcare field."

@iarbosss MIND YOU the federal minimum wage is currently $7.25/hour. #boomers #genz #minimumwage #economy ♬ original sound - Nikki

Another writes, "That minimum wage converted to an annual salary is $137k btw lmao. Boomers had it so easy."

"My Boomer father said to me (a millennial) the other day 'did you know your son's generation will be the first that will be worse off than their parents?' I said 'no, Dad. That's me. That's MY generation' He was SO close...." someone else shares.

"My grandpa worked 60 hour weeks for ONE SUMMER and bought a whole house with it," another person exclaims.

Gen Z; Boomers; Millennials; housing prices; housing markets; boomers buying power; Gen Z home buying Family moving day: New beginnings and smiles.Photo credit: Canva

This financial discrepancy is something Boomers struggle to admit. According to Detroit Legal News, "The majority of baby boomers—those born between 1946 and 1964—believe younger generations simply aren’t doing everything they can to afford a home." They added, "In the Clever study, baby boomers cited several reasons they believe younger generations can’t afford homes, but most blame irresponsible spending. About 71% said young adults spend more on frivolous things like travel and luxury items rather than saving for a down payment."

Boomers seem to have a skewed view of what's happening with younger generations and their spending. A 2023 Bank of America report shows that while Boomers increased their spending on vacations and other luxuries, younger generations pulled back due to student loans and housing prices.

Gen Z; Boomers; Millennials; housing prices; housing markets; boomers buying power; Gen Z home buying Couple smiles in front of their new home.Photo credit: Canva

"Millennials and Gen X hold about 87% of the country’s student loan debt, which tops $1.63 trillion. In addition, 72% of those aged 44 and younger live in rental properties and saw their rent increase for the fifth straight month in August," Detroit Legal News reveals.

Actor Chris Marrone shares his own video on Instagram, reaching the same conclusion as Nikki and Derek. He explains to BuzzFeed that the purpose wasn't to suggest Boomers could buy a home on minimum wage, but to show the stagnant wages.

"Wages have decoupled from cost of living, housing prices, and broader economic growth over the last few decades. The original purpose of the minimum wage was to ensure that even low-wage workers could participate meaningfully in the economy. Not just survive, but live with dignity," Marrone tells the outlet.

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Money blogger shares how she paid off $34,000 in debt by embracing 'no spend' months

She paid it off now to enjoy herself later.

via Pixabay/Pexels and TheSavvySagittarius/TikTok

The No Spend Month calendar

Elyse Lyons, a 28-year-old from Nebraska, is a money blogger and budgeting whiz who conquered a whopping $34,000 in debt over two years by having “no-spend months.” During no-spend months, the goal is to spend as little money as possible each day.

“When I was 22, I was in $34,000 worth of debt because I had student loans, car payments, and some credit cards,” she told Good Morning America. “And I knew that if I wanted to enjoy my life a little bit more, I had to pay it off.”

That’s when she devised her no-spend month strategy.

If you’re looking to save money like Lyons, she recommends buying a calendar and jotting down the few days you might need to part with some cash, such as buying gas for your car or going food shopping. The calendar is also a way to track and celebrate your money-saving wins. It's a fun, visual reminder of your journey to financial freedom.

She also recommends making a list of things you didn’t buy, and if you keep returning to that item, find a way to put it in the next month’s budget. The entire process is all about being intentional and conscious about your spending habits.

“The goal is not to create shame around spending. It's to see who you are at your core and what your actual spending habits are about,” Lyons said. She also said the goal shouldn’t be to restrict yourself to spending $0 daily.

“Extreme deprivation is not going to work for your budget for long,” she added.

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Princeton just made college more affordable by ditching student loans and covering tuition

This sounds radical but it's actually life-changing for students who qualify.

Photo by Joshua Jen on Unsplash

Princeton just made college more affordable.

Many parents know the excitement and apprehension that comes with college application season. We encourage our children to reach for the stars and then sticker shock sets in when they get into their dream school. It's a feeling that will quickly apply the gravity of Jupiter onto any excitement you might have been feeling as a parent, but Princeton, an Ivy League university, is about to change lives. The prestigious school recently announced that it has removed student loans from its financial aid packages and will cover the tuition including room and board for students whose families make less than $100,000 a year.

Whoa! This is huge news, but this isn't the first time Princeton has done something like this. Even before announcing this monumental change, it has granted free tuition for students from families making less than $65,000. The income limit increase will allow the school to help more families afford a higher education. Granted, most kids applying for college won't qualify for entrance to the school due to its highly competitive admissions process. But there are plenty of teens that do qualify and can't attend because the price tag isn't always covered completely by financial aid and scholarships.

Photo by Dom Fou on Unsplash

The current cost of attendance at Princeton for the 2022-2023 academic year is $79,540, which includes room, board and miscellaneous fees. On average, college costs between $11,631 to $28, 238 per year for a public university depending on whether the student is considered in-state or out-of-state. For a private college, the average cost is $43,775. The price difference between Princeton and the average cost of tuition is staggering, but it's Princeton, one of the most prestigious colleges in the United States.

Princeton eliminating the option for student loans in 2001 and now providing a free education for qualifying students will help them graduate without any college debt, likely changing the course of the students' lives. The average student loan borrower owes more than $30,000 in student loans, which has been shown to affect their ability to purchase homes and increase their personal wealth. Eliminating school debt for students from low and middle class households will allow for upward mobility and an easier path forward to building wealth.

But Princeton isn't the only school that took the option for student loans away and offered up free education. Colgate University announced in 2021 that it would do away with what some call predatory student loans and replace them with grants funded by a $1.3 billion endowment. The private New York college also made tuition free for students whose families make $80,000 a year or less.

Photo by Davide Cantelli on Unsplash

Colleges are hearing the concerns about the amount of student debt people have to take on—an issue that causes some people to opt out of college altogether. Yale, Amherst and Harvard have also cut loans from their financial aid packages, vowing to work with parents to provide enough aid through grants that loans won't be needed. If more schools take this approach we could eliminate the normalcy of graduating with mountains of student loan debt that seems to grow no matter if you make timely payments or not.

Sure, it's Princeton and other Ivy League schools that are using their deep pockets to give their students the best start, but if they can do it, what's stopping other schools from reworking their numbers? Student loan debt relief shouldn't begin and end at elite universities. Taking a hard look into the student loan crisis and finding tangible ways to address it at the colleges themselves could lead to an economic shift in the future. Hopefully other colleges continue to take note.

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I escaped generational poverty by  amassing college debt. Loan forgiveness will change lives.

My own children have never experienced coming home to no lights or running water. They will never have to escape from poverty because they don't come from it and I don't know that I'd be able to say the same if I didn't make the choice to accept student loans.

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I escaped poverty by going into debt.

I don't come from money. In fact, I come from the stark opposite. My mother was one of nine children who grew up in an abusive household that was well below the poverty line and her mother grew up poorer than she did. This cycle of poverty goes back as far as I can trace, so it's no surprise that I also grew up poor. There were days when the only thing we had to eat was peanut butter on a spoon during the day to keep us satiated until dinner because it was the only meal that day.

That's not for lack of trying on my parent's part. My stepdad worked a full-time job and lived the hustle life before it became coined by millennials and slapped on a mug. The one thing that was consistently impressed upon me by my parents was the importance of going to college so I could do better than the generation before me. But there wasn't a roadmap for me to follow. Neither of my parents had gone to college at the time and really didn't know the requirements to get in nor the process of applying for financial aid. Since this was before Google, there was no information readily available at my fingertips. There was no financial literacy to pass down to their children when their only goal was survival.

The Biden Administration has done something unprecedented in the history of the United States by forgiving $10,000 of student loan debt for Americans making less than $125,000 a year (less than $250,000 if married or head of household). If you received Pell Grant assistance while in college, you qualify for up to $20,000 in student loan forgiveness. To qualify for the Pell Grant you have to be in great financial need, which means I also received this money to assist with college expenses. But contrary to what some believe, the Pell Grant isn't a large sum of money, so loans are still necessary, even for people like me who worked while in school. Escaping poverty is expensive and exhausting and a program like this will help others break the cycle.

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While most are focused on the loans being forgiven, there's a piece of information being overlooked that could make a big impact on people's lives. Under the new debt relief plan, people who are on an income-based repayment plan can now cap their monthly payments at 5% of their income. Previously the repayment amount was capped at 10% of a person's income.

Obviously such a big move has set off a firestorm of conversation around who should and shouldn't get it, or if it should be done at all. But the conversations around student loan forgiveness don't account for the fact that not everyone starts from the same place at the starting line. It's easy to say people should know what they're getting into when signing up for student loans if you grew up with a different set of circumstances.

Photo by Kenny Eliason on Unsplash

For people like me, student loans were the only way out of poverty and I'd do it again. Because I took out debt to pay for a college education, my children won't have to do the same. They will now have a financially literate parent to walk them through the process, explain complicated forms and help them find more cost-effective alternatives. My own children have never experienced coming home to no lights or running water. They will never have to escape from poverty because they don't come from it and I don't know that I'd be able to say the same if I didn't make the choice to accept student loans.

While forgiving $10,000 to $20,000 worth of student debt for a select group of people isn't ideal, this could open up the door to future borrowers. The awareness around predatory lending to students, the continuously growing cost of college and the stagnation of wages could lead to real policy change that would impact everyone. No student should be saddled with insurmountable debt just for getting an education and this is hopefully the first step toward ending this practice.

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