Strapped: Why America's 20- and 30-Somethings Can't Get Ahead

[nick303]

Has anyone read this book by Tamara Draut? What was your opinion of it?

I try to stay away from the pop econ/overtly political books but I saw a review of this today that caught my attention. The idea is that today 20-30 year olds are buried in a mountain of debt beyond their control, all coming from student loans and then added on to by credit card bills.

I have to say that I'm a bit skeptical. Anecdotally, most people I know that have graduated in the last two years (with a degree in something other than art history) either have their head screwed on financially or they don't; they're buying what they need or they're spending frivolously in an attempt to impress.

From the limited excerpts I've seen her interviewees don't sound much different. A particularly bad example:

"Elaine", 27, .. has $40,000 in credit card debt. (p. 109) Elaine racked up credit card debt because she had to buy new furniture, so that her apartment would look like an "adult's apartment, not an annex of her dorm room." (p. 109). We also learn that despite her debts, Elaine "has no regrets" because "she thinks about the things she did - - studying abroad in Scotland, flying to Paris, having the perfect wedding - - and knows it would never have been possible without credit."

I hope no further comment on this example is needed.

I agree that the price of college education has become too much of a burden, and that you should not have to carry student loan debt for 10+ years after graduation. The blame is being placed in the wrong place. Colleges have gotten out of control in their spending and most of it is not going directly to improving the quality of the education they provide. (See July 2005 issue of Bloomberg Markets for specific evidence of how this game is played, it's a self-perpetuating cycle). I don't think there is an easy solution, but increasing government funding of madness is not it.

Bottom line: Tamara Draut will make some bucks, selling mucho copies of this book, largely to the people she portrays in it. (They'll charge it at B&N/Borders, don't even think about the library).

My suggestion to anyone who would hope to make an even bigger wad of cash: write a well-researched book on the increasingly loose correlation on "money in, education out" in higher education, starting in say, 1975 and continuing to today. Make it an easy read with lots of outrageous examples of university spending.


Amazon profile

[democracyindanger]

1. I read a review of it on sfgate.com

and my reaction was the same as yours. I'm a 30-something, fortunately didn't have any college loans to pay back, but I got suckered into a college credit card and it took me forever to pay off the stupid charges I made. But I don't blame anyone but myself for my debts. Anybody who charges up a storm to furnish their first apartment (I think Draut herself charged thousands to go to a friend's wedding) and then claims victimhood deserves what they get.

And there's something ironic about Draut asking $22.95 for a hardcover book directed at people with financial problems. It's as pathetic as the woman a few years ago who started a website asking for donations to pay off debts she got from shopping.

They can all cry me a river.

[Sammy Pepys]

2. The moment I hear the words "credit card debt"...

...all sympathy I might have had for one's situation begins to walk out the door. I understand that some folks rack up credit card debt for very legitimate emergencies...but nine times out of ten the people complaining about it are folks like Elaine.

[sendero]

3. I have a simpler explanation...

... many of us who are older are more conservative/careful with our money. Why? Because we've seen how it goes when times are not so good. We have more of an eye towards the future rather than a thirst for instant gratification.

Short of landing a six-figure job, the only way for younger people to "get ahead" is to save, not spend. Let other people pay you interest rather than you paying them. Americans have lost sight of this simple fact, and the effects of constant advertising (you have to have this gadget, its everywhere you want to be, etc) pushing both products and selling the idea that everyone uses credit card debt, just make it worse.

Truly, instant gratification now almost surely means pain later. I prefer to save the best food on my plate for last, and I understood at an early age that getting older is bad enough without debt to go along with it. Financial security is like sex, it's no big deal until you don't have it.

Ok, that's my moralizing for today. :)

[girl gone mad]

6. Don't you think the ultra-low interest rate has something to do with it?

Most young people haven't accumulated enough wealth for the 3% interest rates to matter.

The historically low rate, coupled with inflation, has meant that saving is equivalent to losing money. I don't like the attitude that old people are so much wiser than young people and young people only want instant gratification. The simple fact is that there are few incentives for young people to save in this economy and there is a whole lot of enticement, much of it aimed exclusively at young people, to spend.

[sendero]

7. Well..

... that is an interesting point. But I don't think most Americans have much of a handle on what the inflation rate really is.

Back in the 70s (we're talking old people here now :)) there was some serious inflation for a time. It became a mantra, buy ALL THE HOUSE YOU CAN POSSIBLY GET, because the value was going up, up, up.

Lots of folks overbought, then guess what - housing crashed and lots of folks lost their house. Point being, folks are keen to use inflation or any other excuse rationalization to do what they want to do rather than what they know they should do.

The fact that money in savings might lose a small fraction of its purchasing power is no excuse not to save. And Americans aren't saving any money, and this is bad for America, as well as the individuals who work so hard to come up with excuses not save. If you don't save some of your income, you have essentially zero chance of ever attaining any financial security.

The folks I really feel sorry for are those who are working at McJobs, for them, it IS almost impossible to save any money. The people I have no pity for are making good money, and spending every dime of it and then some.

[Indy_Dem_Defender]

4. I think people want what It took

their parents years, Right now ASAP. They also want things bigger and better as well, bigger houses, pricey cars, the best clothes, more and more gadgets. I resently returned to college after a 5 year absence, everyday walking thru parking lot, I mean literally every car in the parking lot is a 1996 or newer, I see volvos, BMWs, Lexus, Hondas, Toyotas, American SUVS, honestly nothing with a value of under $9K. Here I am with a 1990 Chevy Beretta, and it's the oldest damn car in the parking lot. I bought it a year ago for $2K with 60k miles on it and I'll probably be driving for the next 5 years because it's in really good shape with just a little fading of the paint. I mean 5 years ago, a good majority of the students drove cars valued under $5K and where more frugal with their money. I just don't understand all the whining I hear from fellow college students about money and being poor, when their driving 9k - 40k dollar vehicles, walking around with their $300 dollar Ipods and talking on their $200 dollar cell phone.

I just got to say their utterly fuckin' clueless, and just "don't get it." Kids :rant:

[nick303]

5. I should note that I've recently turned 24.

I graduated from college 6 months ago. I am student debt-free although I'd say that is about 80% due to my direct efforts (work & scholarships), with the remaining 20% coming from my parents. I never use my credit card.

I do not understand what drives certain people my age to consume in the way they do. It's seemingly a paradox: on one hand there's entitlement (I need XYZ because, hey, it's me, and I deserve it) and on the other there is a lack of self-esteem (I need XYZ to keep up with my social status amongst my peers).
The dangerous idea in this book is that it's telling people that "hey it's not your fault" when 90% of the time it probably is.

[YOY]

8. Don't really feel sorry for Elaine and her Ilk

I see alot of 20 and young 30 somethings with expensive apartments and very nice cars and I wonder where they are working and how the hell they can afford them. This kind of debt does make sense for me for them, but what about folks like me?

I finished grad school 2 years ago and I'd like to think that I have my head screwed on well financially, but I am having my own problems as I cannot seem to get rid of my grad school tuition woes, my car and computer are falling apart, and my wife is pregnant...thank God (and my employer) that we finally have insurance as of last week. Sure we go and see a movie every month or eat at Olive Garden for lunch once a month so we don't save EVERY penny, but this is not going well.

I'm in debt up to my eyeballs...and I don't even own a credit card...I refuse to until I have better income.

The income problem i.e. the lack of good jobs for young folks has a good source (other than the blatantly obvious lack of attention from the Bush crowd): babyboomers in senior positions.

Not to rip on the babyboomers, but alot of the high ups in many companies and organizations that I have witnessed need to retire. They have more than their fair share, are well invested, and need to free up the company/organizational budget to the next generation. I have witnessed some true examples of 65 year old managers that really are not doing much of anything but poo-pooing or OKing the severely underpaid and understaffed lower ranks work (10-12 hours a had of it versus the managements 6 to 8.) I've been taking my knocks for 5 years this way and am not getting anywhere. THEY NEED TO RETIRE!