The topic of this post occurred to me when I realized I was spending nearly six-figures to educate myself in my twenties. I did the math a few times just to be certain, but it’s true: by 29 I will have spent over $80,000 on tuition fees and textbooks. Some of this cost has been softened with scholarships, but the rest of it just didn’t seem like such a huge burden because it’s being stretched over so many years. Nevertheless, my classmates and I still complain about the price tag of our degree. Since a number of my friends are also married or entering into home ownership, they’ve spent tons of money in other areas of their life as well.
I realized that your twenties might be one of the most expensive decades of your life.
Why is being in your twenties so expensive?
You’re going to spend over $25,000 financing your post-secondary education.
The average bachelors degree costs $23,000 in tuition & fees in Canada. If you follow up with 4 years of Medical School or Dental School, tack on an additional $50,000 or $70,000, respectively.
This is compounded by not being able to work full-time, but still having to pay room & board. In order to make ends meet, students are now borrowing an average of $26,000 in student loans to pay for it. This does not include credit card debt (which 1 in 20 people fear they will never pay off!)
Finding “The One” costs $43,842.
People are always gasping at the average cost of a wedding (around $26,000) but they forget about how much is spent leading up to that big day. As I’ve pointed out in a previous post, dating is NOT cheap, but even I didn’t expect the price tag of going from first date to Big Day to cost over $40,000. The average age of first marriage has been on the rise, to its highest ever at 31 for men and 29 for women in Canada, but since there’s a year or two or more of planning beforehand, the bulk of the cost still hits in your 20’s.
The average first-time home buyer expects to be able to drop a $48,000+ downpayment on a home.
There are a number of different ways to come up with a down-payment for your first home, and in Canada where the average house price is $389,000, you might need to exhaust every option you have. The average first time homebuyer is 29 years old and planning to put $48,000 to $300,000 down on their first home. I’m not really sure where they found this money after spending $26,000 on student loans and $43,000 getting married, but good for them.
Mothers still have their first child in their 20s (barely), and children are expensive.
The average first-time Canadian mother is 29 years old (in the USA it’s 26). I don’t know who these superwomen are that are getting married, buying houses, and having their first baby at 29, but it really makes me worry about my own 29th birthday next year. Baby’s first year will cost upwards of $8,000, just in case you thought you were going to catch up on that student loan debt or make a few extra mortgage payments. Too bad for you!
Additional costs such as traveling or buying furniture for your first home is compounded by earning your lowest salary ever and working only part of the decade, since you’re spending the first few years in school. Ouch!
What can you do to cut costs?
When it comes to school, apply for every scholarship you find and then work part-time as you study to help pay for the cost. If you graduate with student debt, pay it off as fast as humanly possible so you can get on with the rest of your adult life.
If you think you can save $40,000 by staying single, think again: it’s more expensive to be single than in a relationship. What you can do is find someone that shares the same financial values as you, and believes in living within your means so you can both save and invest for your future. Don’t buy into the wedding fever, and instead opt for something smaller and cheaper. The pricetag of your wedding does not determine the quality of your marriage, so there’s actually no justifiable reason to spend big on the big day.
If you can’t afford to put 20% down on your first home, postpone purchasing until you’re in your 30s. It’s not a race. There’s no award for the first person in your friend group to sign a mortgage. The word “mortgage” literally means “death-grip”. Let’s stop patting people on the back for rushing into that.
If you want to have children, there’s nothing wrong with putting it off until the rest of your financial house is in order. There’s also no rule that says you have to buy a house or get married first, so go ahead and have a baby out of wedlock and pocket the cash.
What can you do to get more money?
It’s not going to be easy, since wealth disparity and economic mobility are real challenges, but that doesn’t mean you have an excuse to do nothing. Some of the biggest mistakes 20-somethings make are: choosing to remain under-employed, dragging out debt repayment at the expense of things they’d really rather spend their money on, and failure to save early, earnestly, and seriously.
Getting what you want in life is a matter of prioritizing your goals and taking action. I’m of the mindset that you can have everything… just maybe not all in your 20’s.