It’s Harder for Young People to Get Ahead, But Is Inflation Really to Blame?

It’s no secret that buying a home today is much harder for young people than it was for previous generations. Rising home prices, student loan debt, and inflation all play a role. But there’s another factor that often gets overlooked… spending habits. Many younger adults have different financial priorities than their parents did, and that can make it even tougher to save for a home.

The Rising Cost of Living

There’s no denying that homes are more expensive now. In the 1990s, the average home price in the U.S. was around $120,000. Today, that number is closer to $400,000. Wages haven’t kept up with this jump, making homeownership feel out of reach for many. On top of that, costs for everyday essentials like rent, groceries, and gas have also gone up.

A Different Spending Culture

However, rising costs aren’t the only reason young people struggle financially. Many younger adults today have different lifestyles and spending habits compared to past generations. In the 1990s, people had fewer monthly expenses beyond the basics like rent, utilities, and groceries. Today, there are countless digital subscriptions and entertainment services that didn’t even exist back then.

For example, instead of paying for cable TV, many people now have multiple streaming services like Netflix, Hulu, Disney+, and HBO Max, which can easily add up to over $50 per month. Music subscriptions like Spotify or Apple Music cost around $10 to $15 per month. Then there are premium memberships for gyms, video game services, cloud storage, and even meal delivery kits.

Beyond subscriptions, younger generations also tend to prioritize experiences over saving. Many people prefer to travel frequently, eat at trendy restaurants, and buy the latest technology. Social media has played a big role in this shift. There’s pressure to show off vacations, new clothes, and luxury items, even if it means spending beyond one’s means.

The Impact on Homeownership

All these extra expenses make it harder to save for a down payment. Thirty years ago, young adults weren’t spending hundreds of dollars a month on subscriptions and entertainment. Instead, many focused on saving for big purchases like a home. While past generations also spent money on fun and leisure, there weren’t as many ways to rack up monthly expenses.

Of course, not every young person is living lavishly, and financial struggles are real. High rent, student loans, and stagnant wages make it hard to get ahead. But for some, cutting back on unnecessary expenses could make homeownership more achievable.

Finding a Balance

The reality is that today’s world is different. Many of the conveniences we pay for like streaming services, food delivery, and subscription boxes weren’t even an option in past generations. While they make life easier, they also make it more expensive. Young people hoping to buy a home may need to rethink spending habits, cut down on unnecessary expenses, and focus on long-term financial goals.

Owning a home is still possible, but it requires trade-offs. The question is: are young people willing to make them?

General informational content only. Not tax, legal, or investment advice. Consult a financial professional before making investment decisions. Conduct due diligence. All investments involve risk, including potential loss of principal.