A 20-Something's Financial Manifesto That Went Viral for All the Wrong Reasons

The viral Elite Daily essay “If You Have Savings In Your 20s, You’re Doing Something Wrong” is hilariously terrible. It’s gushingly naive, with lines like, “I was too busy watching my savings instead of savoring my youth,” and “We’re not trying to live with safety nets; we’re trying to live on the edge.”

Like Lauren Martin, the essay writer, I’m in my 20s and I, too, like to “go out to eat, buy clothes I don’t ‘need’ and spend money with friends on memorable nights out.” In fact, I’ve done each of those things in the last two days. She’s right — it’s really enjoyable.

You know what else I find really enjoyable? The ability to continue having fun, despite the fact that I incurred unexpected medical costs a few weeks ago. I covered that triple-digit bill with my emergency fund, rather than try to squeeze it into my monthly budget or put it on a credit card and end up paying a ton of interest on it.

But that’s just me, the lame 20-something who’s missing out by not living “on the edge.” If you want to experience more excitement, consider the advice that inspired Martin’s post in the first place: “Don’t save money. Make more money.”

A friend of Martin’s told her this, and she calls it life-changing advice. Here’s why it’s wrong.

Unless you work until you die, there will come a point in your life where you can no longer just “make more money” in order to offset the fact that you save none of it. Even while you’re working, an unexpected gust of wind (say, your car breaking down, losing your job, getting seriously ill, etc.) could push you off that edge you’re living on. Go ahead, make more money — it’s a great goal — but think about how much it’s going to hurt when you fall off the proverbial cliff if you haven’t saved even a small pile of money to cushion your fall.

Here are a few more things from Martin’s essay that I found ridiculous.

“When did our 20s start to feel like our 40s? When did we get weighed down with the same pressure and stresses as a woman with four kids and a second mortgage?”

I don’t know what my 40s will feel like, but I can make one reasonable prediction: In my 40s, I will be 20 years into saving for retirement. Assuming Martin flips the switch upon turning 30, she will have been saving for about 10. For someone who wants to retire in their late 60s (I’m that person; I don’t know if she is), she would have to save a lot more money each month than I do to save enough to retire financially stable, because I got a significant head start.

“Your 20s are not the time to save; they’re the time to gamble. $200 a month isn’t going to make the dent that a $60,000 pay raise will after spending all those nights out networking.”

The median household income in the U.S. was $53,657 in 2014, down from $54,462 in 2013, according to the latest numbers from the U.S. Census Bureau. Most Americans haven’t gotten raises in years. If you work in a field that’s so lucrative you can legitimately look forward to getting $60,000 pay raises, good for you. Most people don’t.

That $200 a month (or $2,400 a year) will add up to several thousand dollars because of this nifty thing called compound interest: You earn interest on your initial investment, and then you earn interest on that interest. Mathematically, it’s a pretty simple concept, and it’s extremely powerful.

Finally, it’s worth asking: Are you really spending all those nights out networking, improving your chances for career success?

“When you have nothing to lose, you have everything to gain.”

I think that’s called rock bottom. There’s nothing romantic about that. Additionally, there’s no such thing as “nothing to lose” when it comes to money, because there’s this thing called debt, aka negative money, which will continue to grow if you leave it unpaid. Compound interest works both ways.

You might be able to get out of that debt by declaring bankruptcy or setting your debts for less than they’re worth, but that’s not going to be a pleasant experience. If you really want to know how awful it is to live life in the red and try and get out of debt, we have plenty of stories you can read about that.

“It’s good to be cautious and plan for unexpected events. It’s also good, however, to learn how to release and destress. Everything works out, and if you’re smart, able and had a job once, you’ll have one again.”

Right. The world is a totally fair place where smart people get jobs and everything works out and we all live happily ever after.

Actually, the first two sentences in that section are spot on. She just described the process of budgeting: Plan for the unexpected, but also leave room to spend for fun. You can have both. Those are pillars of responsible financial planning.

Though Martin is well-versed in cliches, she seems to have overlooked one: The world is not black and white. Saving money and having fun are not mutually exclusive. In the end, it’s your life: Spend, save and live the way you want to. May you never have to deal with the costs of getting ill, losing your job, moving, having kids, or any other life event that affects your ability to spend all your money so you can live on the edge.

This story is an Op/Ed contribution to Credit.com and does not necessarily represent the views of the company or its partners.