With some hard economic realities staring 20-somethings in the face for the first time in their adult lives, it could be time to rethink a few of modern life's "necessities." But that's less simple than you'd expect.
Unlike their parents, post-college "kids" face a whole list of monthly costs that simply didn't exist a generation ago. Take technology. Cellphones, digital media, Internet service—all are ubiquitous, costly, and a strain on already tapped finances. At the same time, shifting social trends in everything from fashion to marriage are driving up the cost of just making it to 30.
"Twenty-somethings today are struggling more financially than ever before. They grew up in a time when the economy was great, and they're having their adulthood in a time when the economy sucks. It's really hard," says Christine Hassler, a life coach and author of the The Twenty Something Manifesto.
Worried? Here's some advice on how to cut back on those pricey temptations that can put a sizable dent in your bottom line.
Your iPhone envy: Fight it! After watching friends trot out their touch-screens for a quick dinner reservation or to show off MySpace photos of last night's date, it's easy to consider giving in. But at $399, Apple's iPhone comes at a hefty price, especially compared with smartphones being offered—free—from big wireless carriers.
"For the 20-something crowd, there are so many options that are literally $400 cheaper that do the same things they want," says Delly Tamer, CEO of LetsTalk.com, a site that compiles the deals on phones and plans. He says that with a little shopping, most users can get by without giving up too many features in exchange for a big drop in cost. Yes, there's often a rebate to deal with, and you won't get as much attention from strangers. But with smartphones like the BlackBerry Pearl 8130 offered up at no cost, the pain should be minimal.
The iTunes splurge: Embrace it! Face it. Apple's music service might just be too easy to use. An occasional record store splurge is now a 24-7 possibility. But the truth is those dusty aisles were really inefficient. You had to buy the whole album, something iTunes users (smartly) shun. Spending is actually lower online because individual songs are pieced out 99 cents each. So go ahead and click the "buy" button an extra time or two. It's one of the best deals you're getting compared with your parents. "Albums are a fundamentally inefficient business model that was forced on us because we didn't have a choice in the matter," says Mike Goodman, an analyst at Yankee Group. "It's clear people spend less on a monthly basis [on iTunes]."
Booze: Cut yourself off. By now, you've moved up from junior-year nickel-draft night to something a little classier. But those Grey Goose martinis don't come cheap. As of 2006, annual spending on alcohol was highest among 25-to-34-year-olds, some $657 a year on average—a number that can quickly escalate for frequent bar-goers. To cut back, plan ahead. "When you go out, take cash. When you have a credit card in your pocket and you're a couple drinks deep, that card comes out, and by the end of the night you've spent $50 or $60. If you only had $20 in your pocket, that would've been it," Hassler says.
The wedding: yours. The average planned wedding in 2007 cost a jaw-dropping $27,800, according to a new survey by wedding website TheKnot.com. Couples are paying for much of it themselves—roughly 43 percent, or about $12,000. How to cut costs?
"The bumper-sticker motto is: Pick your priorities," says Carley Roney, TheKnot.com's editor in chief. "Pick just three big things [the food, the band, the photographer] to invest your money in."
Other tips: Get married in the off-season or on a Friday or Sunday. Avoid spring or fall. If you live in a pricey city, move the location to the suburbs. Also, go casual: fewer servers, skip the ballroom, no limos.