Sunday, February 23

Your 20s Are The Most Expensive Decade Of Your Life

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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.

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this about sums up all my feelings on spending on “necessities” in my 20s

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.

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About Author

Student debt killer, super saver, and stock market addict. BSc. in Chemistry from the University of Alberta, MBA in Finance from the University of Calgary. CEO x 2 and MOM x 1. Currently residing in Calgary, Alberta, Canada, but hooked on travelling.

30 Comments

  1. passionatelysimple79 on

    Really great article with so many truths! The worst part is that it wasn’t always this way, it’s becoming even worse with each year that passes. There used to be a time when college was more affordable, and you didn’t graduate with all this debt. Weddings were also smaller affairs. I think that all these things can happen in your 20’s if you prioritize and try to make it work by planning and budgeting.

    • Agreed! My younger sister is paying 10-15% more in tuition costs than I did. I definitely can’t afford to check everything off in my 20’s so some of it is definitely waiting until my 30’s.

  2. Another great article Bridget! There’s so much spending that needs to be done in your 20’s, it can be overwhelming at times. It’s good to remember that it doesn’t all happen in your 20’s anymore, and that it can be postponed if necessary.

  3. I always enjoy your articles. I am 29 this year too! And it’s scary how much i spent in the last 9-10 years. Secondary education is already costing an arm and leg for most people, let alone having a house in the twenties, unless you have a great job right after university, or great mommy/daddy funds – account for only 5% of the 20’s population (don’t quote me my stats are just based on my random observation with limited sample size). Doing all that it’s ridiculous!

    No wonder people these days are so used to debt because they have no other way to fund all these without seriously compromising their living standard. Middle class society is no longer exist…. i am just ranting on a monday morning. Please forgive me.

  4. The cost of my education in Canada for 9 years of university would work out to be about $60k (tuition only, at $3k per term – 8 terms of undergrad, and 13 terms of grad school… it’s slightly lower because of a drop in fees after X number of years of grad school).

    Ugh… why did I just calculate that? It’s worth it, but it’s surprising to actually do it. And I’m probably under-estimating because really, my tuition was on the rise over the years.

  5. My 20s were damn expensive. So expensive that I’m still literally paying the price as I enter my 30s. 😉 My next few years are going to be super expensive as well since I’m planning a wedding for spring 2015 and hopefully baby soon after. Yikes! $$$$

  6. While my 20s have been expensive, it hasn’t been impossible to “have it all”. My husband and I worked hard and save and took good jobs with good benefits. It’s not impossible to get married, buy a house, and have kids in your 20s if you make it a priority. We don’t eat out all the time or shop at high end stores, and that has allowed us to have the things that are important to us. So while my 20s have been expensive it definitely has not added up to what you have listed.

  7. Having kids is DEFINITELY expensive, we were paying $500/week (part time) for daycare in our area. That is literally college tuition in some states. We recently decided to take our daughter out of daycare for this reason. We will engage her in other activities, it’s simply not worth it when you break down the numbers.

  8. I’d like to know how on earth a first home buyer could drop a 300k deposit (in their 20s) unless they inherited some money or purchased with a partner (saving 150k ea)

    • my eyes bulged out in disbelief at that stat too, but I included it because that’s just what the article said =\ Maybe it’s kids that are getting a ton of help from their parents? Or maybe they just asked 20 year olds that think they’re going to be super rich by 28.

  9. $50,000 for med school?! Is that what it costs in Canada? In the States the average student loans for med school alone are > $100,000. I went to one of the most inexpensive med schools in the country and still came out with $108,000 in debt even after scholarships and grants. Many students have far, far more. Then you work for 3-5 years making $50,000/yr. A very expensive decade indeed!

    • Yeah! It’s fairly affordable (comparatively) to go to medical school here. Dental school is twice as much.

      It’s very costly to become a doctor in the USA. Canadians are seriously subsidized.

  10. Yeah, I tried to do away with/put off the expenses. Obviously, I went to college, but I kept my wedding super cheap (under $1k), I don’t expect to buy a home in my 20s, and I may or may not have kids in my 20s (probably late twenties, early thirties).

    I never really thought about it, but your twenties are crazy expensive if you do all of these things!

  11. I guess I’m an exception to the rule? I am 24 and hubby is 27. We got married in 2012, and I graduated in 2013 and had a baby a month later. I managed to get through school (6 years) with only 5k in loans by working part time and summers. Our cars were bought with cash. We have a mortgage. We have no credit card debt. While I wouldn’t say we’re swimming in cash, our head is firmly above water. Babies can be expensive, but people handed us down the big things (crib etc.), and by making certain choices (breastfeeding, cloth diapering) we’ve probably spent less than 1500 adding our daughter to our family. I’m not saying everyone has to do these things in their twenties, but it’s totally possible!

    • It isn’t a rule, it’s just averages for each category. Also the list isn’t how much debt you accumulate for each item, it’s just how much it costs. Just because you only graduated with $5,000 in student loans doesn’t mean your education didn’t cost $25,000. Likewise a mortgage and a wedding were still expensive. Props for being able to afford it all, but that doesn’t mean it was cheap!

  12. When you put it this way I’m not sure I would want to go back to my 20s like I think I would most of the time… haha

    I had quite a few friends drop downpayment worth amounts on their weddings while they were in their 20s which sounds crazy to me. And NO, it doesn’t sound any less crazy now that I’m in my 30s.

    Thanks for the great post.

  13. “even I didn’t expect the price tag of going from first date to Big Day to cost over $40,000.”

    There’s also the cost of going from crying-myself-to-sleep-into-a-bowl-of-chocolates-every-night to first date. Finding people is so expensive…

  14. So true. I mean the amount of times I’ve moved in the past 4 years, I’ve spent so much money on furnishing then refurnishing places I’m so sick of it! I seriously don’t know how I afforded to live when I first moved out at 24, I was so broke but somehow I made it work. So looking forward to being in my 30s and not as broke.

  15. I think because many people are now getting married, buying home and having babies in their 30s, the 30s can also be an expensive set of years. So two decades of heavy duty spending is a LOT of money.:S
    My 20s were actually less expensive for me. I was fortunate enough to graduate with no student debt, thanks to my co-op jobs. However my 20s were also a time when I was barely making any money due to periods of brief, sporadic employment. So although my 30s are more expensive with the purchase of a home, I’m making more money and more anal about how I spend it and invest it.

  16. Do you think you would have ever considered doing your MBA at a top U.S. school where tuition alone over 2 years can be $180k?

  17. If you would have done an apprenticeship then it’s unlikely you’d have anything to blog about in regards to student debt, buying a house or worrying about paying for a wedding… I bought my house at 23 with 30% down because it was a race (a race against rapidly increasing house prices) and it dramatically increased my quality of life. Just sayin’ 🙂

    • haha apprenticeship was not an option in my career field, but I definitely agree: if students can find a way to make their degree pay while they’re still learning, that is absolutely the ideal!

      Congrats on such a major financial progress — 30% down is amazing!

  18. The 20s is a time for thrift. There is nothing wrong with having second hand items and living and inexpensive apartments, especially if you are investing in your human capital (college or university) at the time. Why expect more during such a period? A lot of young people simply have consumer expectations that are too high, and are unable or unwilling to learn to stretch a dollar. Part time jobs, or summer apprenticeships are essential to help pay for college. I was a residence hall dom and worked in the computer labs at university. I also worked summer internships, which are available if you choose a marketable field like engineering. If you are choosing a liberal arts field, and hoping for graduate degrees to provide you a good job, you may be mistaken. For every 10 doctorates in sociology, pol science, history, english, etc, there are only 2-3 full time tenure track jobs. Too many people in their 20s are biding their time in universities, often extending that to graduate school, but degrees no longer provide the kind of career paths the once did. People would be better served learning a trade and avoiding the trap of today’s universities.

  19. Haha I feel like this addresses a lot of the things I was texting you about yesterday 😛 I’m rushing to squeeze in as much as I can financially into my 20s and maybe that’s my problem. There’s nothing wrong with this desire and it is possible to make everything happen… But you’re right, maybe just not EVERYTHING in my 20s.