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I lost my job at the start of COVID right after my daughter was born (she was born in March, 2020, so we saw lockdowns come into effect while we were in the hospital).

Again, same. Though for me, it was December of 2019 and a son, and I was laid off in late January. Wild times.

But what I did have was 6-12 months expenses in cash.

We had carved away at our cash reserves building a house that our larger family could actually fit in, and they hadn't built back up yet. It was a calculated risk to do that rather than buy, and I wouldn't have changed the calculation in hindsight, but the one-two-three-four punch of house-child-layoff-pandemic within the span of a few months isn't really something you expect when you're doing the numbers.

That set us back a couple of years, but we were already ahead because we were living below our means. Fast-forward to today and we're back to being ahead because we continued to live below our means.

I'm glad for you. And also: your situation is not normative.

Here's an interesting article about household debt over time, which goes back to 1995 (so almost 30 years). [...] debt got cheaper, so people got more debt.

A couple of things to note:

1. Those numbers end in 2010, which means that they're actually almost as far away from today as the beginning of that study is from the end of that study. A lot has happened in the last 14 years.

2. Those numbers also end right as the country was digging its way out of the 2008 financial crisis, which was largely caused (as I'm sure you recall) by debt mismanagement (specifically subprime mortgages). Those numbers, in and of themselves, are signposts of the very institutional and systemic changes I'm taking about.

3. It's impossible to disentangle the chicken and the egg here. Were people in more debt in 2010 because rates were low? Or were rates low because the economy was burning, largely because more people were in bad debt situations?

So people are in more debt today, but they're paying about the same to service that debt. So people are spending more than they used to, but they're able to do that because borrowing rates are lower.

Actually, the data suggests that private per capita spending in the US has tracked more or less with inflation since at least 1960.

In my experience, people largely paid for things w/ cash 30 years ago, whereas today paying with credit is a lot more common.

My parents used credit in the 90s. We had car payments and a mortgage (and their mortgage rate was in the double digits, no less—but it was still a smaller percentage of their single monthly income than my 2.8% mortgage is today, in a better field, with a second income.

People don't save up to buy things as much, and instead buy now pay later.

Again, the chicken and the egg: do people not save up because they don't want to? Or because they can't? If our car dies, I can't save up to buy another. I have to buy now and pay later.

So the real issue here is discipline, at least for those in the middle class and above.

With your caveat, I'm amenable to entertaining your argument for a significant portion of the population. I just don't recognize it in practice.

being irresponsible with money is easier, which I think encourages more people to do it.

I just don't see the numbers bearing that out. And anecdotally, it might be easier to sign up for a credit card online, but I was getting junk mail about credit cards on the day I turned 18, in 2003. One of my first jobs included trying to pitch a private label grocery store credit card to everyone who walked in. When I got to college (also in 2003), a credit card company had a booth there and was offering students free pizza if you signed up for a credit card. I didn't bite, but there was a substantial line at that booth. So it might be quicker now, but I haven't received a mailer for a credit card in years.

So I do think younger generations (including my own, I'm a millennial)

Me too. I think we might be the same person. This is honestly kind of weirding me out.

[...] are more irresponsible with money and have higher expectations of what that money can buy than previous generations. Over the last 30+ years, real wages have increased consistently (i.e. after taking inflation into account), and we're back to the peak of the early 70s before the stagflation of the 80s. Yet people claim we're getting poorer, so I have to take that as people having unrealistic expectations instead of an income problem.

Housing costs as a factor of monthly income are back up to 2008 Financial Crisis levels, though; and over the last two decades that growth you're talking about has been concentrated largely at the top. The numbers support peoples' assertion that we're getting poorer.

Thanks for chatting with me about this. It's a really interesting topic.