Financial habits and strategies often reflect the times in which they were formed. What worked for one generation may not necessarily apply to the next, especially as economic conditions change. While some believe that personal finance fundamentals remain the same, others argue that new challenges require a different approach.
As discussions about financial security continue, it’s worth exploring whether classic savings advice is still effective or in need of an update.
Recently, an 83-year-old millionaire’s saving advice sparked a debate among the younger generation. The millionaire in question, a member of the silent generation, shared his financial insights on a popular social media series on helping Australians save for house deposits.
With an impressive $40 million in assets, the elderly gentleman attributed his wealth to a career in law, property ownership, and hotelier business. While his multi-million success is commendable, his advice to the younger generation was met with mixed reactions.
@coposit_street Whopping savings at 83! 💰 #streetinterview #interview #savings #australia #property #sydney #money #agevssavings
His advice, aside from hard work, is to ‘do away with’ small luxuries like takeaway coffee to save money and ‘just watch how you spend your pennies.’
For some, the idea that doing away with a daily cup of coffee could be the key to financial success seemed laughably simplistic. Comments flooded in, pointing out the stark differences between the economic climate of the past and the challenges faced today.
‘Work hard and don’t buy coffee. Got it,’ one user sarcastically remarked, while another one commented, ‘So out of touch. Yep, not having a coffee every day will save you $40 million.’
‘He didn’t get $40 million by not buying coffee or saving his pennies. He played the real estate game and cashed up…’ opined a different commenter.
‘Out of touch. Coffee is not sending [the] youth broke. Rent, groceries, insurance, fuel, electricity, rampant [government] spending… how does one combat against that?’ said someone else.
The sentiment was echoed by Graham Cooke, head of consumer research at Finder, who crunched the numbers to put things into perspective. He said that to save for a $280,000 deposit on the average Sydney home, one would need to skip 57,970 coffees.
He added that even if a couple were to cut out four coffees each week, it would take them 139 years to save enough for a deposit. He advised the young generation to ‘enjoy’ their coffee, instead.
However, the video wasn’t only met with scepticism. Others shared their agreement with the man’s financial advice.
‘He’s not lying. Our generations didn’t do Euro summers, after pay, Uber eats, credit cards, subscriptions, new cars, designer brands, expensive gym memberships, tap & go… it all adds up,’ wrote one commenter.
‘Exactly. Invest your money where it will grow; not on depreciating goods. It’s not that hard,’ another echoed.
‘She literally just asked him for tips to save. He essentially answered with “only purchase necessities.” There’s literally nothing controversial about that,’ opined a third person.
‘Well, you guys commenting saying that this guy’s time was different, pull your head in. Start investing, letting your money compound and grow. Doesn’t matter what you do for a job,’ remarked another.
For our readers over 50, many of whom have navigated various economic climates and witnessed firsthand the changes in the financial landscape, do you agree with the younger generation, or think they are missing the senior’s point?
You can also share other strategies you found effective in managing your finances. We’d love to hear from you in the comments below.
IMO most young people today spend way more than they need to on consumer items which have no lasting value. The thing is though that we live in a consumer orientated throw away society where the economy is built on people spending not saving.
If large numbers of people took to saving as the senior advised then many business’s would suffer major downturns and a permanent recession would set in.
So there are two sides to the saving versus spending scenario.
The real problem is the absurdly high cost of housing and the government investor tax concessions, high immigration, high insurance costs, and red tape around construction that are combining to drive prices up. A problem that neither side of politics wants to deal with.
Young people are still buying houses in their teens and early 20’s. The same way our generation did … work 3 jobs, don’t buy takeaway anything … cook at home and take your own lunch and coffee, if you are not partnered, live at home and rent the house out, secondhand or hard rubbish furniture etc.
From my grandfather-
“Work hard, only spend on what you need, Save X dollars each week and invest wisely. Buy a vehicle that suits your needs not what your mates are buying.”
Typical of some people to make the comment that not buying a coffee will not make them $40 million, the point that is being made is don’t waste your hard earned on frivolous things, I walk around the local shopping centre and the coffee shops are doing a roaring trade, at least 50% of the customers are young women with bubs in tow having a cooked breakfast, I looked at the menu $23, now that’s not going to make them $40 million either, but if you look closer at the lifestyle of some young people it’s all about today, with no eye on the future. I come from an era of low wages and high interest rates, I worked between 60-80 hours with much of my overtime being taxed at 60% no super to fall back on in retirement. We managed through living frugally buying second hand furniture eating home cooked meals, our first home was a 2 bedroom fibro home with an outside loo, that was our life, with no overseas holidays until much later.
As an addition to my comment above, how many huge vehicles do you see at school pickup time, I used to pick up my grandchildren in my little Barina I was overshadowed by massive 4 wheel drive vehicles that looked like they had never been off road, each of these cars would cost between $50/60 thousand my little car cost me $17 thousand 3 years ago. I know not everything applies to every age group but there seems to be an awful lot of huge cars in the shopping centres and most of them are driven by the younger generation.
Good on you Jim, you nailed it.
Before they married, both my parents worked in a Bank. My mother was a ledger keeper and after they married, my father went on to manage a succession of country branches. As such they saw the reality of financial situations of many in the communities. It wasn’t always as apparent. Fine clothes and a flash car didn’t mean a bouyant bank account. Nor did threadbare suits and old bangers living in a house needing a little more care mean that they would die a pauper.
My father had a saying from all those years ago “Look after the pennies, and the pounds will look after themselves.”
I have an acquaintance who told me that thanks to an ill-advised marriage, at one stage he had three credit cards that were all at their limit and each being used to pay the others in succession. It took him a few years to “balance the books” back to low stress. Minus that wife.