Millennials’ finances: Avocado toast or a home?
It used to be that daily lattes “were the reason that Americans were penniless failures,” said Maura Judkis in The Washington Post. Now the personalfinance press has discovered a new “culinary scapegoat.” Apparently, the reason Millennials aren’t buying homes isn’t because of the weight of student loans or the lingering effects of the recession, but because they’re frittering away their hard-earned cash on avocado toast. At least that’s the explanation floated by Australian real estate mogul Tim Gurner. In an interview last week with Australia’s 60 Minutes, the 35-year-old millionaire lamented the Millennial predilection for pricey brunches, saying, “When I was trying to buy my first home, I wasn’t buying smashed avocado for $19 and four coffees at $4 each.”
“Millennials have enough problems as it is. Must they give up their avocado toast, too?” asked Linda Qiu and Daniel Victor in The New York Times. It’s true that Millennials spend more money on eating out than their elders. Americans ages 25 to 34 spent, on average, $3,097 on dining out in 2015, about $305 more than people ages 55 to 64. But the median U.S. home price is $315,000. “The truth is, even if Millennials assumed the eating-out habits of Baby Boomers, it would take around 113 years before they could afford a down payment on a home.”
Don’t worry, young people: Avocado toast isn’t the reason you can’t afford a house, said Jessica Roy in the Los Angeles Times. You’re just unfortunate enough to come of age in a period when “housing prices and student loan debts continue to rise while wages remain stagnant.” So why are the personal-finance scolds obsessed with breakfast? Like latte shaming, blaming fancy avocado toasts for money woes “aligns nicely with both liberal and conservative beliefs.” Liberals see wasteful materialism, while conservatives see bad personal choices. “Moralizing money spent on snacks” fits nicely into both narratives, but does nothing to address the real problems.
The truth is, no one will “save enough to buy a house by forgoing avocado toast,” said Kathy Kristof in CBSNews.com. Saving up to make a down payment on a home means making “a whole host of day-to-day sacrifices,” including renting a cheaper apartment, taking fewer vacations, and, yes, occasionally skipping brunch. But it never hurts to start small, said Holly Johnson in The Indianapolis Star. If you stop spending $20 on lunch and coffee every weekday, for instance, you’ll save $400 per month. That’s $4,800 a year that can go toward a student loan or even a down payment. Sorry, Millennials, but “math says avocado toast and other splurges can suck your coffers dry.”